The affordability of flood resilience will become an increasingly critical issue as rising sea levels and urbanization expose a growing number of people and population centers to floods, says the World Economic Forum’s Global Risk Report 2019.
The 14th edition of the Global Risks Report, prepared with the support of Guy Carpenter’s parent company, Marsh & McLennan Companies, states that robust risk financing strategies will be required to fund investment in adaptation and to pay for recovery when floods occur.
Rapidly growing cities are making more people vulnerable to rising sea levels. Two-thirds of the global population is expected to live in cities by 2050. Urbanization not only concentrates people and property in areas of potential damage and disruption, but it also exacerbates those risks; for example, by destroying natural sources of resilience such as coastal mangroves and increasing the strain on groundwater reserves. The risks of rising sea levels are often compounded by storm surges and increased rainfall intensity.
Sea-level rise threatens significant damage to property — not only homes and businesses but also public assets and critical infrastructure, which adds significant contingent liabilities to the taxpayer. Research suggests that economic impacts are highly concentrated geographically, where sea-level vulnerabilities interact with high-value property and infrastructure. Just four cities account for 43 percent of average annual losses: Guangzhou, Miami, New Orleans and New York. (1) The researchers note that because “coastal flood risks are highly concentrated, flood reduction actions in a few locations could be very cost-effective.” (2)
(1) Hallegatte, S., C. Green, R. J. Nicholls and J. Corfee-Morlot. 2013. “Future Flood Losses in Major Coastal Cities”. Nature Climate Change 3: 802–06.