The most developed and globally important Asian economic centers, such as Beijing, JakartaHo Chi Minh City, Taiwan, and Mumbai an independent climate risk analysis company found them to be among the 100 cities most at risk of climate damage.
These key economic centers faced the greatest risk of damage extreme weather and climate crisisaccording to a report released Monday by the Cross-Dependency Initiative (XDI).
The ranking is the first Gross Domestic Climate Risk (GDCR) analysis to calculate the physical climate risk to the anthropogenic environment in more than 2,600 areas around the world in 2050.
The XDI GDCR dataset compared these states based on simulated projections of damage to buildings and property from extreme weather and climate change events such as floods, wildfires, heat waves and sea level rise.
The analysis found that Asia dominated the list of provinces at risk, 114 out of 200 regions on the list, with several important economic centers in China and India is included.
After China, Art USA had the highest level of risk with 18 in the top 100. Florida was the highest ranked US state, followed by California and Texas.
India had the third most states in the top 50, including Bihar, Uttar Pradesh, Assam, Rajasthan, Tamil Nadu, Maharashtra, Gujarat, Punjab and Kerala. Together, China, India and the US account for more than half of the states and provinces in the top 100.
Other highly developed and globally significant economic centers in the top 100 were Buenos Aires, Sao Paulo, 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 important to investors because it highlights that infrastructure development generally coincides with high levels of economic activity and the cost of capital. It is also the first to conduct a physical analysis of climate risks focused solely on the anthropogenic environment, comparing every state, province and territory in the world.
“In terms of the overall scale of risk of damage and in terms of risk escalation, Asia has the most to lose as climate change-related extreme weather increases and the most to gain from preventing the worsening of climate change and accelerating climate investment sustainability,” Rohan said. Hamden, CEO of XDI.
“This is the most sophisticated global analysis of physical climate risk to date, offering breadth, depth and granularity on a scale we have not seen before.
“Now, for the first time, the financial industry can directly compare Mumbai, New Yorkand Berlin using a “like for like” methodology, he added.
The XDI Gross Domestic Climate Risk comparison of physical climate risks to 2050 found that globally, the Chinese provinces of Jiangsu, Shandong, Hebei, Guangdong and Henan have the highest risk of harm scores.
More than half of the 50 riskiest states and provinces in 2050 were in China, mostly in the globally connected provinces in the east and south, along the floodplains and deltas of the Yangtze and Pearl Rivers.
It also says Southeast Asia will experience the world’s greatest escalation of damage from climate-induced events between 1990 and 2050.
“We are publishing this analysis in response to investor demand for data on sovereign and regional risks. The results of the XDI GDCR rating highlight the importance of pricing physical climate risks in financial markets, including bond markets, given the scale of capital investment represented by assets at risk in the identified provinces, the vulnerability of global supply chains and the need for climate resilience to inform investment,” Mr. Hamden said.
“It is critical for companies, governments and investors to understand the financial and economic implications of physical climate risk and weigh that risk in their decision-making before these costs grow beyond financial tipping points.”
The financial costs of extreme weather and climate change are already being felt by many economies leading the XDI GDCR rankings.
In June 2022, the worst flood in Guangdong province, ranked fourth in the analysis, caused an estimated economic loss of RMB 7.5 billion (over £830 million) in direct economic losses.
Hurricane Ian, which hit heavily populated areas of Florida in late September 2022, caused $67bn (£55bn) in insured losses.
The findings of this report are consistent with the various assessments of the Intergovernmental Panel on Climate Change (IPCC), show that extreme weather events in similar regions are likely to increase in the coming years as the planet continues to warm. Therefore, the economic costs of disasters will also increase.