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Climate Pressures are Redefining Macroeconomic Resilience in Asia & the Pacific

A mother and daughter wading through the flood waters in Feni, Bangladesh in 2024. Catastrophic floods disrupted employment, trade and economy. Policymakers should stand ready to implement policies for speedy recovery. Credit: UNICEF/Sultan Mahmud Mukut

By Shuvojit Banerjee
BANGKOK, Thailand, Jul 25 2025 – In the past year, Asia and the Pacific has faced intensifying climate pressures, from extreme heat in Bangladesh and India to devastating floods in northern Thailand and rising food insecurity across the Pacific.

But these are just the most visible signs. Beneath the surface, increasing temperatures, shifting rainfall and rising sea levels are quietly eroding fiscal space, distorting prices of goods and services, and weakening long-term economic resilience. Climate risks, both sudden and slow, are also reshaping the region’s macroeconomic landscape.

The latest ESCAP Economic and Social Survey of Asia and the Pacific explores how this evolving threat is affecting jobs, inflation, public finance and long-term economic resilience. To better understand countries’ readiness to confront these risks, ESCAP developed a new assessment framework that evaluates the intersection of climate exposure and macroeconomic coping capacity.

It focuses on two core dimensions: exposure, which is measured through potential output losses, agricultural risk, carbon intensity and climate-driven inflation; and macroeconomic coping capacity, which is captured through indicators of fiscal space, financial sector health, and institutional effectiveness.

When plotted on a two-axis matrix, countries fall into four quadrants depending on their exposure and macroeconomic coping ability. This matrix serves as a comparative tool to guide targeted policymaking.

Resilience is a balance: Exposure and coping must go hand in hand

Countries in the higher exposure-lower capacity quadrant face the most pressing risks. For example, Afghanistan, Cambodia and Nepal fall in this category due to both geographic and structural vulnerabilities, including recurrent climate events, limited fiscal buffers, and weaker institutional capacity.

The higher exposure-higher capacity quadrant includes countries such as Kazakhstan, Mongolia and Viet Nam. While each faces different forms of climate stress, they share stronger governance and macroeconomic fundamentals that support more effective responses.

Countries such as China, Malaysia and Thailand fall into the lower exposure-higher capacity quadrant. These economies benefit from current low climate exposure and resilient financial systems. Nevertheless, they need considerable investment in adaptation to prevent future vulnerability, especially given regional interdependence and evolving risks.

Finally, the lower exposure-lower capacity quadrant includes countries such as Lao PDR, Papua New Guinea, and Solomon Islands. These countries may face fewer direct climate threats today but remain vulnerable to disruption due to weak institutional and fiscal capacity. Even moderate shocks can have severe macroeconomic consequences.

Taken together, the quadrant framework underscores the need for differentiated policy approaches. For example, countries with high exposure and low capacity should focus on boosting fiscal space, strengthening financial sector resilience including through climate-aligned regulation and risk tools, and enhancing economic institutional capacity.

In contrast, countries with low exposure and strong capacity are well-placed to invest in adaptation innovation and support other regional peers.

Climate stress is a core economic risk

Climate change is already disrupting employment, trade, investment and public finance across the region. It is no longer an external shock but a defining macroeconomic challenge.

Governments must respond with sustained, systemic reform. Macroeconomic planning across Asia and the Pacific must place resilience at its core – not only to manage immediate shocks but to navigate a slower-moving, climate-shaped economic future.

Shuvojit Banerjee is Economic Affairs Officer, ESCAP

IPS UN Bureau

 


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To Tackle Microplastic Pollution from Synthetic Textiles, Rebuild Natural Fibre Markets

The blue trousers are hemp woven into denim, which is a warp-faced textile in which the weft passes under two or more warp threads. The black and white outfit is from hemp as well. Credit: Nimco Adam / qaaldesigns

By Michael Stanley-Jones and Claire Egehiza Obote
Richmond Hill, Ontario, Canada / Trollhättan, Sweden, Jul 25 2025 – Plastic pollution has emerged as one of the most pressing environmental challenges of our time. Since the mid-20th century, over 8 billion metric tons of plastic have been produced globally (UNEP, 2021). Shockingly, more than 90% of this plastic waste has not been recycled. Instead, it has been incinerated, buried in landfills, or leaked into the environment where it can persist for hundreds of years, fragmenting into microplastics.

Among the most insidious threats within this overwhelming tide of waste are microplastics: plastic particles smaller than 5 millimeters. These tiny fragments often originate from the breakdown of larger plastic items or are directly released through industrial processes, personal care products, and increasingly, from textiles. Though they represent a smaller portion of total plastic waste by weight, their impact is disproportionately severe and persistent

Michael Stanley-Jones

Recent scientific findings have shown that micro- and nanoplastics are now entering human bodies. These particles have been detected in bloodstreams, lungs, feces, testes and placentas. While the full health implications are still being studied, early concerns suggest these particles may disrupt hormone regulation, immune response, and cellular function.

Each year, it is estimated that 9 to 14 million metric tons of plastic waste escape into aquatic ecosystems, including rivers, lakes, and oceans (Pew Charitable Trusts & SYSTEMIQ, 2020). Moreover, it is not just our oceans or bodies at risk; microplastics have been found in terrestrial soils, affecting agricultural productivity and soil health. They hinder the activities of key organisms like earthworms, which are vital for nutrient cycling. At every level, from soil to sea to self, microplastics are infiltrating our ecosystems.

The story does not end with pollution. Plastic’s contribution to climate change spans its entire life cycle from fossil fuel extraction and chemical manufacturing to transportation and disposal.

The Hidden Culprit: Synthetic Textiles

Amid this crisis, one significant contributor remains relatively overlooked: textiles. Textiles are estimated to account for 14 percent of global plastics production (Manshoven et al., 2022). Synthetic fibres like polyester, nylon and acrylic ubiquitous in fast fashion shed tiny plastic particles during production, daily use, and washing. These particles escape wastewater treatment systems and flow directly into natural water bodies.

Claire Egehiza Obote

In fact, microplastics from textile washing are estimated to make up 8% of primary microplastics in the oceans, making textiles the fourth-largest source globally. The implications are far-reaching, affecting marine life, food security and human health.

But it was not always this way.

In 1960, 95% of textile fibres were natural and biodegradable. Today, demand for textiles has skyrocketed by over 650%, while the share of synthetic fibres has ballooned from 3% to 68% (Carus & Partanen, 2025). Fast fashion’s dependence on cheap, fossil-fuel-based synthetics has turned the textile industry into one of the planet’s most polluting sectors.

This intertwined crisis of microplastic pollution, climate change, biodiversity loss and food insecurity calls for a comprehensive rethinking of how we produce and consume textiles. A critical part of that solution lies in rebuilding the natural fibre markets we once relied on.

Reviving Natural and Renewable Fibres

Research scientists Michael Carus and Dr. Asta Partanen of the German nova-Institute have called for a significant increase in renewable fibre production.

Bast fibres from flax, hemp, jute, kenaf and ramie are promising but remain expensive due to complex processing needs. Investments in their scalability could help them rival synthetics.

Man-made cellulosic fibres (MMCFs) such as viscose, lyocell and modal are biodegradable and scalable but rely on virgin wood and chemical-intensive processes, posing threats to forests and ecosystems. Recycled MMCFs make up only 0.5% of the market, but they could grow significantly with the right incentives.

Bio-based polymers (or “biosynthetics”) offer alternatives to fossil-based synthetics, yet adoption is still low. Marine biopolymers from seaweed for textiles may provide yet another source of natural fibre.

In the Global South, informal textile economies provide livelihoods for millions and often operate outside formal regulation. In addition to technological innovations, traditional knowledge systems and indigenous fibre cultivation practices such as the use of sisal, coir, or abacá can offer scalable, low-impact alternatives.

What Can Be Done?

Governments, industries and consumers all have roles to play in turning the tide:

Policy Action: Governments could implement Extended Producer Responsibility (EPR) schemes that require manufacturers to cover the full lifecycle costs of textile waste. The European Union has recently taken steps towards this by introducing harmonised EPR rules for textiles and incentivising producers to design products that promote sustainable design.

Market Incentives: Public and private investment should prioritize R&D into preferred cotton and bast fibres to reduce costs and improve competitiveness with synthetics. Supporting transitions to natural fibres in the Global South through microgrants, capacity building, and market access can help reduce plastic leakage at scale while enhancing socio-economic resilience.

Regulatory Levers: Boosting the proportion of sustainably sourced MMCFs is critical. Regulators should further encourage the shift to certified forestry and recycled content. 60 to 65% of MMCFs are now FSC and/or PEFC-certified, an upward trend since at least 2020 that should further be encouraged (Carus & Partanen, 2025).

Innovation in Waste Processing: Converting post-harvest waste from bast fibres like kenaf, flax, hemp, jute, and sorghum into textile-grade yarn could be a game-changer for local economies and sustainability.

Corporate Transparency: Mandatory disclosures under frameworks like the EU’s Corporate Sustainability Reporting Directive (CSRD) and the International Sustainability Standard Board (ISSB) IFRS S1 and IFRS S2 can guide investors away from carbon-intensive fashion and toward more sustainable alternatives. Once risks from unsustainable production are baked into market valuations, investment flows into more sustainable production will inevitably follow.

Consumer Choices: Individuals can help shift demand by buying natural fibres, choosing durable apparel, and consuming less overall. Consumer pressure has historically influenced corporate behavior textile sustainability is no exception.

Community-led initiatives: Supporting community-led initiatives that revive local textile production not only reduces reliance on synthetics but also preserves cultural heritage and supports sustainable rural development. These models are often more circular and regenerative by design.

The Global Plastics Treaty: The ongoing negotiations for a global plastics agreement offer an opportunity to recognize and prioritize the shift toward biodegradable natural fibres as part of international plastic pollution solutions.

If governments, industries and consumers work in concert to rebuild natural fibre markets, the share of synthetics in clothing could decline to 50% from today’s 67%, according to nova-Institute’s analysis (Carus & Partanen, 2025).

Without such action, we risk a future defined by escalating microplastic contamination, irreversible biodiversity losses and a worsening climate crisis. The ongoing global plastics treaty negotiations also offer a timely opportunity to recognize natural fibre transitions as part of systemic plastic pollution solutions. But an alternative future, one that is more sustainable, biodiverse and resilient, is still within reach. We must act to reclaim natural fibres and reject a plastic-saturated future.

Michael Stanley-Jones, Environmental Policy and Governance Fellow United Nations University Institute for Water, Environment and Health

Claire Egehiza Obote, Graduate Student in Sustainable Development University West, Sweden

IPS UN Bureau

 


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