More than two dozen countries, including China, France, Korea, Mexico, Russia and the United States, face potential leadership transitions this year. A central factor determining the outcomes of these events is the prospect for more jobs and incomes. A topic not on the political radar, however, is climate change. Yet, it should be ― because our growing understanding of climate science and economics warns us that sustaining people’s well-being, in large and small economies, hinges on confronting this global danger.

Remarkably, mainstream economics omits this perspective from its core calculus of economic growth. The public is not making this connection either. That then leaves most politicians to believe that dealing with climate change will lose votes, not win them.

Meanwhile, temperatures are breaking records around the globe, while greenhouse gas emissions continue to climb at alarming rates. The just released report from the Intergovernmental Panel on Climate Change makes a link between more intense rainfall and more extreme temperatures with man-made climate change. The large economies emit the most greenhouse gases, but often it is the small economies especially in the Asia region that are the most vulnerable.

Economics indicates that there are sacrifices involved in combating climate change, but also that the gains surpass the costs considerably. Most importantly, mitigating climate change today will likely be far less costly than waiting to face even greater impacts. Similar to dieting, it is better to lose weight today than to delay action that risks bringing on life-threatening illnesses, like heart disease.

The crucial question is what it will take to generate the political support around the world for an urgent response to this mounting global threat.

First, policy makers need to recognize climate impacts ― in East Asia and elsewhere ― as an immediate concern, not just a future one. Recent heavy rains, floods and landslides in Australia, Korea, Pakistan, and Thailand, wildfires in Russia and severe droughts in the south-western United States show the devastation that extreme events can bring. Major shifts in population growth, urbanization, and environmental degradation are making people more vulnerable when these extreme events strike.

Second, politicians and the public need to realize that climate response is in the national interest, not just in the global. Local benefits include reduced energy costs through efficiency gains in buildings and manufacturing, jobs from growth in solar and wind industry ― and reduced air pollution from cleaner power plants. In the United States, the country with the highest emissions per person, smarter buildings could save an estimated $20 to 25 billion in annual energy costs. Fossil fuel subsidies are a significant share of GDP in China, India and Indonesia, adding up to over $400 billion worldwide in 2010. Special interests benefit from these subsidies, but the national gains from eliminating them are clear.

Third, economists and their clients need to recognize that climate action, not inaction, is the means to sustain economic growth. Steps to address rising sea levels that threaten coastlines; to protect urban areas from flooding; and to prevent declining farm yields due to changing trends are ways of containing climate costs. Last year’s deadly floods are estimated to cost Thailand’s economy $46 billion in economic damage. In the United States, there were more than 14 climate ― and weather related disasters in 2011, each exceeding $1 billion in costs.

There are signs that the economic opportunities of tackling climate are not being totally ignored in Asia and around the world. Korea has featured the largest green investments in its stimulus packages in the wake of the recent global downturn. In China, the country with the largest annual greenhouse gas emissions, the 12th Five-Year plan envisages renewable energy generation to account for 20 percent of energy consumption by 2020. Meanwhile, private investment in China’s clean energy sector increased to over $50 billion in 2010, almost 40 percent above 2009 levels.

Some of the world’s largest private companies are also adopting climate strategies. General Electric’s Ecoimagination program produced $85 billion in revenues in its first five years, doubling the pace of the rest of GE’s portfolio. Kingfisher, the European home improvement group, generated revenue from eco-products at 1.1 billion in 2010-2011, 10.5 percent of its total retail sales.

But can the vast gap between climate knowledge and economic policies be bridged in time, in large and small economies, in Asia and the rest of the world? Yes it can. But only if economists and economic ministers factor in climate change in their beliefs about economic growth; the public recognizes the vital link between climate response and economic success; and political leaders take note and spearhead timely action. 

By Vinod Thomas and Manish Bapna

Vinod Thomas is director general, independent evaluation, Asian Development Bank, and Manish Bapna, interim president, World Resources Institute. ― Ed.