AKP Phnom Penh, May 06, 2021 --

Moody’s Investors Service said Thursday that Cambodia was among three countries in the Asia-Pacific region most exposed to flood risks arising from climate change.

In a statement received from Frankfurt, Moody’s said climate risks such as rising sea levels, droughts, floods and wildfires were particularly negative for credit ratings in emerging markets.

“Many countries are exposed to at least one climate hazard, with emerging markets generally more likely to face multiple challenges than advanced economies,” the U.S. credit rating agency said. 

“Sovereigns in Asia Pacific stand out for their exposure to flood risk - highest for Cambodia, the Philippines and Thailand. Exposure to heat stress is widespread among emerging markets. Advanced economies tend to be more exposed to rising sea levels, with Hong Kong, Singapore, Denmark and the Netherlands most at risk.”

Moody's Vice President Steffen Dyck said repeated climate-related disasters “can weigh on investment, productivity growth and economic strength, which can weaken a sovereign's credit profile.”

“There is also a large gap between financing needs for climate-adaptation measures and low-cost funding sources,” he said. 

“This threatens the credit profiles of sovereigns which are highly exposed to physical climate risk, especially those with already low fiscal strength.”

Moody’s said climate trends “also risk amplifying existing social pressures by contributing to forced displacement and migration or threatening food security."

The rating agency added that “many countries have taken steps to boost their climate resiliency.”

But “the scale of adaptation required remains a challenge that will test institutional and capacity constraints.”

By Sao Da