China, the United States, and India account for 80% of the top 50 at-risk states from climate change in 2050. The most recent assessment was issued by XDI Cross Dependency Initiative, a climate risk specialist.
China leads the list with 16 of the 20 global regions most vulnerable to climate change, which could have far-reaching global consequences. Several of the world’s most important manufacturing centers in China are threatened by increasing water levels and extreme weather.
XDI examined over 2,600 places around the world, utilizing climate models, weather, and environmental data to determine the economic damage that temperature rises could cause by 2050. It looked at projected damage to the built environment caused by extreme weather and climate change, such as flooding, forest fires, and sea-level rise.
“This is the first time there has been a physical climate risk analysis focused exclusively on the built environment, comparing every state, province, and territory in the world. Since extensive built infrastructure generally overlaps with high levels of economic activity and capital value it is imperative that the physical risk of climate change is appropriately understood and priced,” XDI CEO Rohan Hamden, said in a statement.
According to the analysis, two of China’s largest sub-national economies, Jiangsu and Shandong, rank first in the world in terms of sensitivity to climate change. After China, the United States has the most high-risk states, with 18 in the top 100. Meanwhile, China, India, and the United States account for more than half of the top 100 states and provinces.
Infrastructure investment effects of climate change
The shift of global production to Asia has resulted in a significant surge in infrastructure investment in already vulnerable areas around China, making it more vulnerable to the effects of climate change, according to Hamden.
“Infrastructure investment has tended to be concentrated in areas that have traditionally been very high-risk – river deltas, coastal zones, and relatively flat areas,” he said.
While climate change is likely to become more influential in deciding capital flows, it remains to be seen if it would inhibit investment in more susceptible places, according to Karl Mallon, co-founder of XDI.
“There is a lot to be done to work out which areas in the world are potentially adaptable and defendable, and which are probably the areas we will see abandoned in due course,” he added.
