Cities are home to half the world's population and produce a staggering 80% of global GDP. As more of us continue to migrate to cities, these numbers are widely expected to grow. According to the latest report from the Intergovernmental Panel on Climate Change (IPCC), urban climate change risks are increasing too.
We are already witnessing the consequences of this. Last winter's historic flooding in England wreaked havoc on homes and businesses, costing small businesses alone some £830m and counting. Now, the UK Committee on Climate Change has issued fresh warnings that not planning for climate change will result in significant costs for the UK government. However, it also showed that investing in resilience pays: for every £1 spent on flood defence, £8 is saved.
City governments too are aware of the potential financial impacts of climate change. Protecting our Capital (pdf) is a new report that illustrates city governments are protecting their economies, businesses and communities. The analysis, based on environmental risk information provided by the world's leading cities and from companies within them, shows that where cities have identified risks recognised by businesses, they are taking adaptation and mitigation actions to combat them.
Water features heavily as one of the primary physical threats disclosed to CDP by both companies and cities. This includes risks such as storms, flooding, sea level rise and frequent and intense rainfall. Copenhagen, for example, describes flooding as an "instantaneous" event that negatively impacts business operations due to road closures and damage to buildings.
And while the impacts of sea level rises can be immediate, notes Abidjan in the Ivory Coast, they have "lasting impacts" on tourism and supply chains. The Organisation for Economic Cooperation and Development (OECD) states that more than $3tn in assets is at risk from climate change in port cities, which are vital gateways for the exchange of goods and services.
Given that water-related risks pose such a significant threat to economic activity in urban centres, climate change has created a new imperative for greater public-private partnerships. In São Paulo — the largest city by population in the whole of the southern hemisphere — the problems of storm-related flooding and poor sanitation have negatively affected its most vulnerable slum communities. Sabesp, the largest water company in Brazil, which is part-owned by the state, is working with the city on a $600m programme to provide sewage networks that will improve the water infrastructure and sanitation in 43 slums.
Cities in coastal Asia, are, according to the IPCC, expected to face some of the worst effects of climate change in the first half of this century. Cities and companies alike are adapting in response. Hong Kong's drainage services department is investing $2.7bn in flood defence infrastructure, including underground storage tanks, river widening and large drainage tunnels. Meanwhile, energy supplier CLP Holdings, one of two energy suppliers in Hong Kong, has also moved to protect against sea level rise by raising the floor levels of buildings that house critical infrastructure.
City governments aren't focused exclusively on improvements to infrastructure in this context. From Las Vegas to Addis Ababa, raising awareness and providing information around physical water-related climate risks is a key strategy for city governments to improve resilience. In Las Vegas, the Southern Nevada Water Authority has, together with local municipalities, reduced the community's water consumption by 36bn gallons through conservation programmes — that's equivalent to 20 hours of water flow over Niagara Falls. In London the mayor has published a water strategy that informs and encourages the city's four privatised water companies to improve water-efficiency and better manage water resources.
While cities are working on myriad solutions to improve and build their climate resilience, from investing in green infrastructure to establishing alternative sources of clean drinking water, the burden is not theirs alone. Our report shows that cities are recognising the benefits of climate mitigation and adaptation but that companies too must respond to these risks. In many cases city action has obvious co-benefits for others. Coordinated action between cities and the private sector, be it through sharing information or better planning, is however key if the significant climate threat to our economies and ecosystems is to be avoided.
Larissa Bulla is head of CDP's cities programme
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