Revealed The Key Cities and Regions Most at Risk from Climate Change in 2050
The most developed and globally significant Asian economic hubs such as Beijing, Jakarta, Ho Chi Minh City, Taiwan, and Mumbai are among the top 100 cities at risk of climate damage, an independent climate risk analysis company found.
These key economic hubs faced the highest risk of damage from extreme weather and climate crisis, according to the report released on Monday by the Cross Dependency Initiative (XDI).
The rankings are the first pass analysis of Gross Domestic Climate Risk (GDCR) that calculated the physical climate risk to the built environment in over 2,600 territories worldwide in 2050.
The XDI GDCR dataset compared these states based on modelled projections of damage to buildings and properties from extreme weather and climate change such as flooding, forest fires, heatwaves, and sea-level rise.
The analysis found that Asia dominated the list of provinces at risk, with 114 of the 200 regions on the list, with several significant economic hubs in China and India included.
After China, the US had the most high-risk states with 18 in the top 100. Florida was the highest-ranking US state, followed by California, and Texas.
India had the third highest number of states in the top 50, including Bihar, Uttar Pradesh, Assam, Rajasthan, Tamil Nadu, Maharashtra, Gujarat, Punjab, and Kerala. Together, China, India and the US made up over half the states and provinces in the top 100.
Other highly developed and globally significant economic hubs in the top 100 were Buenos Aires, Sao Paolo, Jakarta, Beijing, Ho Chi Minh City, Taiwan, and Mumbai. Australia, Belgium, Italy, Canada, and Germany also had states and provinces in the top 100.
The report is significant for investors as it highlighted that extensively built infrastructure generally overlapped with high levels of economic activity and capital value. It’s also the first to carry out a physical climate risk analysis focused exclusively on the built environment, comparing every state, province and territory in the world.
“In terms of overall scale of damage risk, and in terms of risk escalation, Asia has the most to lose as climate change extreme weather increases, and the most to gain from preventing worsening climate change and accelerating climate-resilient investment,” said Rohan Hamden, CEO of XDI.
“This is the most sophisticated global analysis of physical climate risk to date, offering a breadth and depth and granularity on a scale we haven’t seen before.
“Now, for the first time, the finance industry can directly compare Mumbai, New York, and Berlin using a like-for-like methodology,” he added.
The XDI Gross Domestic Climate Risk comparison of physical climate risk for 2050 found that globally, Chinese provinces Jiangsu, Shandong, Hebei, Guangdong, and Henan have the highest results for damage risk.
Over half of the top 50 most at-risk states and provinces in 2050 were in China, predominantly in the globally-connected provinces of the east and south, along the floodplains and deltas of the Yangtze and Pearl Rivers.
It also said that South East Asia was experiencing the greatest escalation in damage anywhere in the world from climate crisis-induced events between 1990 to 2050.
“We’re releasing this analysis in response to demand from investors for data on sub-sovereign and regional risk. The findings from the XDI GDCR ranking underscore the importance of pricing physical climate risk in financial markets, including bond markets, given the amount of capital investment represented by the assets at risk in the provinces identified, the vulnerability of global supply chains, and the need for climate resilience to inform investment,” said Mr Hamden.
“It is crucial for companies, governments and investors to understand the financial and economic implications of physical climate risk and weigh this risk in their decision-making before these costs escalate beyond financial tipping points.”
The financial cost of extreme weather and climate change is already being felt by many of the economies topping the XDI GDCR ranking.
In June 2022, extreme flooding in Guangdong, which ranks fourth in the analysis, caused an estimated economic loss of 7.5 billion yuan (over £830m) in direct economic losses.
Hurricane Ian, which struck densely-populated parts of Florida in late September 2022, caused an estimated $67bn (£55bn) in insured losses.
Findings from this report, in line with various assessments by the Intergovernmental Panel on Climate Change (IPCC), indicate that extreme weather events in regions like these are likely to intensify in the coming years as the planet continues to warm. Hence, the economic costs from disasters are also set to rise.
