Why cities need to take action against climate risks in the face of rapid urbanization
Written by: Eliot PERNET, Public Sector Business Developer at AXA Climate, email@example.com
The pace of urbanization is an unprecedented challenge. The proportion of people living in cities around the world continues to grow inexorably: from 39% in 1980, to 46% in 2000, 56% in 2020 (1) and is estimated to rise to 70% in 2050 (2).
It is not surprising that the UN’s Intergovernmental Panel for Climate Change (IPCC) devoted the 6th Chapter of their latest major report to urbanization (3). Cities, which account for 75% of global GHG emissions (4), are now the indispensable drivers for achieving global resilience goals. While attention is often focused on megacities, the importance of "small" cities with populations of less than 1 million should not be forgotten as they face similar challenges.
Urbanisation’s main stumbling blocks, in particular in developing countries where most of the urban growth is happening, are threefold:
- First, as cities expand, they destroy the natural habitat of species. Although cities currently represent only 3% of the earth's land surface (5), this small figure is deceiving as cities require 36 times their surface for their food, raw materials, and energy needs (6). The pace of urban expansion is meteoric: in the first 12 years of this century, the built-up area increased by 66% (7).
- Cities often fail to foresee in real-time, adequate spatial planning rules to manage their expansion. As a result, newcomers often settle in makeshift, unhealthy habitats located in risky areas. The UN Habitat Agency already estimated in 2016 that 1.6 billion people already did not have adequate housing (8). The coupling of demographic trends with the likely increase in climate migration will amplify the phenomenon (today, 20 cities around the world host 20% of the world's migrants (9)).
- Finally, cities are highly vulnerable to natural hazards. It is estimated that about 58% of cities are highly exposed to one or more of the six main natural hazards (10) (cyclones, floods, drought, earthquake, landslides, volcanic eruption). The IPCC estimates that population growth in low-lying cities and settlements will lead to approximately a billion people at risk from coastal-specific climate hazards in the mid-term (2041-2060) (11). IPCC authors add that the most threatened cities are the ones which are already the most exposed. As a result, the number of people exposed to a severe flooding is projected to increase by about 20% if global mean sea level rises by 15 cm relative to 2020 levels. With a 75 cm rise, the number of people exposed could even double (12).
On the front line are the most vulnerable populations, as is often the case. They tend to live in the most exposed and unmanaged neighborhoods. Lack of infrastructure transform events of little importance into a human and material catastrophe (for example, heavy rain in a poor neighborhood can turn into a large-scale flood because of a poor drainage).
Floods are undoubtedly the most widespread threat to cities
The World Economic Forum estimates that floods threaten 1,600 cities with more than 300,000 inhabitants (13), and more than 1.4 billion people in total – 600 million of whom live below the poverty line (14). In 2019, floods caused nearly $46 trillion worth of damage, and caused the loss of about 4,500 lives, which is half of the total loss from natural disasters (15).
This bleak picture is made even bleaker by demographic forecasts of a 300% increase in the number of people living on the coasts in the next 50 years (16). It is estimated that the global cost of floods could double by 2030 (compared to 2020) and that it could be quadrupled for heavy rainfall-induced floods, to an annual average cost of USD 140 billion (17).
Adaptation starts with a clear understanding of the risks
Giving up on the UN's sustainable development goal 11 ("Making cities and human settlements inclusive, safe, resilient and sustainable") is not an option. Faced with these forecasts, it is clear that the need for adaptation is urgent. But where to start?
Each actor has their own answer to this vast question. For our part, we adopt a three-step approach to thinking about the adaptation of cities to natural hazards.
First, understand the risk. Many cities in developing countries do not have a precise map of their exposure to different climate and disaster risks, street by street, under different time horizons and across several climate change scenarios. This work must be carried out using public climate projection data, scenarios and tools and summarised in an user-friendly way, in collaboration with local experts.
Then, identify adaptation measures to reduce the impact of the risk. Traditionally, two types of adaptation measures are distinguished. On one hand, "Grey" measures, such as dikes, gabions, retention basins, or densification of construction to limit the surface area occupied by the city. On the other hand, "Green" measures, also called nature-based solutions (NBS), such as urban greening using vegetation, natural water filtration, the preservation of natural habitat around cities, or the planting of mangroves on the coast to limit the breaking of waves during coastal storms events. While grey and green measures often work very well together, there is a giant gap in investment in the latter. Nature-based solutions currently represent only 0.3% of the funds invested in city infrastructures (18), even though they are 50% less expensive than their "grey" alternatives. In addition, their direct and environmental benefits – such as risk reduction, but also CO2 capture, increase in ecosystem health and human well-being – are estimated to be 28% greater (19). No doubt that an increase in the investment devoted to NBS to 1% or 2% would be highly beneficial for community resilience and welfare.
Finally, prioritize adaptation measures. Policy makers seek to act on a concrete and operational basis. Two complementary approaches can be taken to prioritize actions. On the one hand, a quantitative analysis can be used to identify the most profitable measures for the city in terms of avoided damage in relation to their cost (cost-benefit ratio). On the other hand, a more qualitative approach makes it possible to account for the sharing of the benefit among the different socio-economic classes of the city, to ensure that the systematic correlation between poverty and risk is reduced.
This progressive approach can be complemented by the implementation of a parametric insurance scheme directly protecting the city against natural hazards. By insuring itself, the city can considerably limit the volatility of its budget over time as the fixed premium it pays allows to transfer very large, unpredictable risks to international (re)insurers. It also allows cities to become autonomous from the State and to be able to act rapidly in the event of a disaster with the funds directly obtained from the insurers.
In the end, a resilience trajectory involves two essential steps: putting a value on adaptation solutions and on their benefits, and making sure that the adaptation options are fair for all stakeholders, including the communities and the ecosystem itself.
For more information, contact Eliot PERNET, Public Sector Business Developer at AXA Climate, firstname.lastname@example.org
(3) IPCC, Work Group2 contribution to the Sixt Assessment report “Impacts, Adaptation and Vulnerabilities”. A summary for policymakers, and a 5-minute video by AXA Climate with the key take-aways is available here: https://axaclimate.wistia.com/medias/w9du9ly2c2
(6) McDonald, Rob et al., “The Future of Global Urbanization and the Environment”, Solutions, 5(6), 2015, pp. 60-69.
(7) IPBES, Global Assessment Report on Biodiversity and Ecosystem Services, 2019.
(10) The Global Commission on the Economy and Climate, The 2018 Report of the Global Commission on the Economy and Climate: Unlocking the inclusive growth story of the 21st century, 2018.
(11) Ibid, note 3.
(12) Ibid, note 3..
(13) World Economic Forum, BiodiverCities by 2030, Transforming Cities’ Relationship with Nature,2022, WEF_BiodiverCities_by_2030_2022.pdf
(14) Rentschler, Jun Erik and Melda Salhab, “1.47 billion people face flood risk worldwide: for over a third, it could be devastating”, World Bank Blogs, 2020.
(15) World Resources Institute, New Data Shows Millions of People, Trillions in Property at Riskfrom Flooding — But Infrastructure Investments Now Can Significantly Lower Flood Risk [Press release], 23 April 2020.
(16) Miller, Megan and Manoochehr Shirzaei, “Land subsidence in Houston correlated with flooding from Hurricane Harvey”, Remote Sensing of Environment, vol. 225, 2019, pp. 368- 378.
(17) Woetzel, Jonathan et al., Climate risk and response: Physical hazards and socioeconomic impacts,McKinsey, 2020.
(18) United Nations Environment Programme, State of Finance for Nature, 2021.
(19) World Economic Forum, BiodiverCities by 2030, Transforming Cities’ Relationship with Nature,2022.