A recent Jupiter Intelligence survey detailed which are the cities most threatened by climate change currently. Dubai leads the ranking, followed by Miami.
Only public investment in resilient infrastructure could mitigate the risk of extreme events, such as floods, wind, heat, or hail. Here is the complete list.
The cities most threatened by climate change
Dubai is the city facing the greatest climatic dangers, such as floods, wind, heat, hail, fire, rainfall, and cold. It is followed by Miami, Hong Kong, and Mumbai, according to a survey by Jupiter Intelligence.
Extreme weather events, increasingly frequent. (© José Jordán).
Among the ways to mitigate the effects, adaptation in infrastructure appears first, as some municipal administrations have done, Amsterdam and Paris, among others.
Likewise, in response to recent forest fires and the associated smoke haze, state and local governments in Australia are leading the task of protecting their urban areas from climate change through a series of planning and legislation tasks.
Resilient infrastructure includes hard defenses such as seawalls and flood barriers, as well as natural infrastructure like wetlands. Nature-based approaches are often cheaper.
Adapting to climate change
All around the world, cities will have to prepare and adapt to climate change in different ways.
Permeable pavements to reduce the risk of floods, misting stations to help residents cope with more frequent and intense heatwaves, or underground power lines and reinforced foundations to mitigate storm damage are some of the solutions that can make cities more resilient.
These are just some of the solutions that can make cities more resilient.
How climate change impacts the economy
Extreme weather events also affect asset prices and liquidity.
Prices generally decrease after climate events, particularly in places not accustomed to extreme climates.
In Hong Kong, for example, after a typhoon in October 2018, unit prices of a multifamily residential building fell by 14%. They did not recover to pre-typhoon levels four years later.
Climate change creates conditions for fires.
Even “prime” buildings will need to adapt to a rapidly changing climate to maintain their appeal.
More than 90% of the world’s largest companies will have at least one real estate asset financially exposed to climate risks by 2050, according to S&P Global.
Climate resilience
The climate resilience of a specific asset is determined by both the resilience of its supporting infrastructure (transport, energy, water, and sanitation) and the resilience of the asset itself.
For this reason, investors will place a higher risk premium on properties in a city affected by climate events. Global studies determine that the benefits of investing in climate-resilient infrastructure outweigh the costs.
However, the situation of many companies is still uncertain regarding adaptation. Some figures:
- Only one in five companies has a plan to adapt to the physical risks of climate change, according to the latest data from S&P Global.
- The real estate sector has a slightly better performance, with 26.5% adapting to physical risk.
- According to the Global Risks Report 2023 by the World Economic Forum, “failure to adapt to climate change ranks as the second biggest risk for companies over the next decade.”
- While the JLL Built Environment Decarbonization Report found that 78% of investors and 83% of occupants identify climate risk as a financial risk, a PwC study from 2023 found that only 23% of executives plan disruptions in the next 12 to 18 months.
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