The most significant impacts of
climate change will come through water
Precipitation is set to increase over high latitudes, the equatorial Pacific and parts of the monsoon regions, but decrease in sections of the subtropics and in limited areas of the tropics. Rainfall is projected to become more intense over shorter periods of time, conversely raising the risks of flooding and droughts, simultaneously.
billion
3-4
people are likely
to be exposed to
physical water scarcity at 2°C and 4°C.
From 1983-2009, approximately three-quarters of global harvested areas (about 454 million hectares) experienced yield losses induced by meteorological drought, with the cumulative production losses corresponding to USD 166 billion.
Agriculture
In Mediterranean Europe, hydropower reductions of up to 40% are projected under 3°C warming, while declines of below 10% and 5% are projected under 2°C and 1.5°C warming levels.
Energy
Too little water
Too much water
$ billion
1
projected worth of damage from a 100-year flood in Ho Chi Minh City by 2050.
In Ho Chi Minh City, direct infrastructure asset damage from a 100-year flood could rise from about USD 200-USD 300 million today to USD 500 million-USD 1 billion in 2050, while knock-on costs to the economy could rise from USD 100-USD 400 million to USD 1.5-USD 8.5 billion.
Heavy downpours increased rate of soil loss due to erosion, reducing agricultural production. At least 3.2 billion people are at risk of being negatively affected by land degradation, such as malnutrition and forced migration.
Soil erosion by water costs the world economy about USD 8 billion a year.
Agricultural production
Increased, potentially concurrent climate extremes will periodically lead to
a greater number of simultaneous losses in major food-producing regions.
China
USA
Brazil
Argentina
India
60%
of global food production occurs in just five countries
Just
The likelihood of a 15% shock to grain production doubles by 2030 with possible knock-on effects on prices. Negative economic shocks of this size could lead to widespread social and political unrest, global conflict, and increased terrorism.
grains provide
50%
of calories
4
A changing climate...
$ billion
125
Hurricane Harvey,
which struck Texas on 25 August 2017, caused damage worth about
... affects socioeconomic systems
Including reductions in US and Gulf of Mexico oil-refining capacity of about
Research suggests that climate change increased the intensity of precipitation by
%
20
%
8-19
million
7.8
The Hunan province floods in 2017
affected a
population of
Resulting in economic damage and infrastructure loss of
$ billion
3.6
Researchers
estimate that
climate change
made the floods
as likely
2x
The Europe heat wave in July 2019 exceeded 37.5°C across the UK, the Netherlands, France, Germany, Italy, Spain and Belgium, taking a toll on rail, road and power infrastructure. This led to noticeable delays in transportation and power outages and slower economic activity.
According to academic research, in France, climate change made this heat wave approximately
as likely
10x
Source: "
The adaptation opportunity
International public finance flows
Adaptation financing needs
5-10
x
There is a substantial funding gap for climate-adaptation measures.
will be required
globally for
adaptation activities each year
$ billion
500
of climate change investment is currently spent on adaptation efforts
%
5
of expected cost-benefit for early investment, since it
helps avoid damage
ratio
1:4
Even in a best-case scenario, climate damage
– which is already evident today –
will accelerate.
Adapting to climate change will require a major global transition in key sectors like energy, industry and agriculture, providing opportunities for investors.
The adaptation market – encompassing physical structures like infrastructure and buildings, plus analytical and forecasting services – could double to USD 2 trillion within 5 years (Bank of America, 2020).
Massive increases in climate-related public investment will deliver capex. For example:
Adaptation innovations, such as products enabling greater water efficiency, will enable agricultural productivity to be more resilient during droughts.
Specific financial products can support governments and corporates investing in adaptation, such as bonds linked to resilience projects.
Integrating adaptation into net-zero-aligned mitigation projects, like green buildings and investments in nature-based solutions, will also help preserve natural capital.
Click on the buttons to see rankings by risk
Extreme temperature and drought
Floods
and storms
Sea level
rise
1. UAE
Source: "
Climate Change Physical Risks Are a Growing Threat to Sovereigns
Climate change physical risk exposure heatmap rankings
1 = most exposed. Adaptation capacity can reduce vulnerability. As for any heatmaps, the selection of different indicators, specifications and weighting of the indicators would give different results.
up to
1
2
2 Source: "
3
3 Source: "
25% of the European Union’s total budget is focused on climate for the next six years
The US Department of Defense has dedicated USD 26 billion from its budget to climate resilience
New York and California have committed USD 29 billion and USD 4.1 billion respectively to climate-resilient infrastructure
2. Saudia Arabia
3. Qatar
4. Iraq
5. Jordan
6. Kuwait
7. Oman
8. Egypt
9. Pakistan
10. Israel
11. Uzbekistan
12. Turkmenistan
13. Morocco
14. Australia
15. India
Click on a country to see the location
Click on a country to see the location
Click on a country to see the location
1. Mozambique
2. Vietnam
3. Bangladesh
4. Philippines
5. Thailand
6. Namibia
7. Rwanda
8. Bolivia
9. Laos
10. China
11. Singapore
12. India
13. Indonesia
14. Colombia
15. Sri Lanka
1. Netherlands
2. Suriname
3. Maldives
4. Vietnam
5. Bahrain
6. Egypt
7. Latvia
8. Seychelles
9. Denmark
10. UAE
11. Qatar
12. Japan
13. Benin
14. Belgium
15. Thailand
Soil Erosion: A Global Challenge
1 Source: "
,” published by the House of Lords Library in 2020.
Global bill for soil erosion by water: US$8,000,000,000
,” published by the European Commission in 2019.
Climate risk and response: Physical hazards and socioeconomic impacts
,” published by McKinsey Global
Institute in 2020.
,” published by Fitch Ratings in 2021.
Climate risk and response: Physical hazards and socioeconomic impacts
,"
published by McKinsey Global Institute in 2020.