As many as 84% of the world’s fastest growing cities will face an ‘extreme’ risk from rising temperatures and increasingly severe weather events in the next 30 years, according to the 2018 Climate Change Vulnerability Index (CCVI) published by risk consultancy firm Verisk Maplecroft on November 14.
The CCVI combined new UN projections on rates of annual population growth in more than 1800 cities with subnational Verisk Maplecroft data to find that 234 cities globally will be heavily affected by climate change. More than 94% of them are in Africa and Asia, intensifying fears that the world’s poorest countries are set to be the worst affected by climate change. Climate change will take a particularly high toll on Africa as 79 of the 84 fastest growing ‘extreme risk’ cities are located on the continent - including 15 African capitals and several of the continent’s key commercial hubs.
The ‘extreme risk’ cities with the highest economic exposure, and thus the highest financial risk, include commercial centres in some of the world’s crucial emerging markets: Jakarta in Indonesia (US$223bn), Manila in Philippines (US$166bn), Lagos in Nigeria ($128.5bn), Baghdad in Iraq ($88bn) and Addis Ababa in Ethiopia ($69bn).
Using IMF growth estimates, Verisk claims the amount of GDP in African countries exposed to ‘extreme risk’ in the CCVI will grow from $895bn in 2018 to $1397bn in 2023. This constitutes 48% of the entire continent’s GDP.
“Businesses operating in megacities have to understand the physical risks in the short, medium and long-term,” says Richard Hewston, principal climate change and environment analyst at Verisk Maplecroft. “They must work to build their resilience to climate shocks, not only to protect their assets and people, but also to satisfy investors that are increasingly factoring climate risk into their investment process.”
At the other end of the spectrum, 86% of the 292 ‘low risk’ cities are located in Europe and the Americas. Moreover, despite the UK’s national weather service’s claim that UK heatwaves now last twice as long as 50 years ago, the five cities most insulated from the impacts of climate change in the CCVI – Glasgow, Belfast, Edinburgh, Preston and Middlesbrough – are all located in the UK.
The study concludes that while the most obvious damage caused by tropical cyclones and flooding will be to infrastructure, property and assets, equal importance is placed on potential disruption caused by disease and increases in crime and civil unrest. Moreover, risks could be exacerbated by larger numbers of people migrating to cities and across borders due to drought, crop failure and instability.