Big Economies of the Future Most at Risk from Climate Change

A new index, calculating the vulnerability of 170 countries to the impacts of climate change over the next 30 years, identifies some of the world’s largest and fastest-growing economies, including India, as facing the greatest risks to their populations, ecosystems and business environments.

The new Climate Change Vulnerability Index (CCVI), released by global risks advisory firm Maplecroft, enables organisations to identify areas of risk within their operations, supply chains and investments. It evaluates 42 social, economic and environmental factors to assess national vulnerabilities across three core areas. These include: exposure to climate-related natural disasters and sea-level rise; human sensitivity, in terms of population patterns, development, natural resources, agricultural dependency and conflicts; and the index assesses future vulnerability by considering the adaptive capacity of a country’s government and infrastructure to combat climate change.

The index rates 16 countries as ‘extreme risk’, including nations that represent new Asian economic power and possess significant forecasted growth. Bangladesh (1), India (2), Philippines (6), Vietnam (13) and Pakistan (16) all feature in the highest risk category and are of particular importance as they are major contributors to the ongoing global economic recovery and are vital to the future expansion of western businesses in particular.

“These countries are attracting high levels of foreign investment from many multinational organisations,” said principal analyst at Maplecroft, Dr Matthew Bunce. “However, over the next 30 years their vulnerability to climate change will rise due to increases in air temperature, precipitation and humidity. This means organisations with operations or assets in these countries will become more exposed to associated risks, such as climate-related natural disasters, resource security and conflict. Understanding climate vulnerability will help companies make their investments more resilient to unexpected change.”

Other countries featuring in the ‘extreme risk’ category include: Madagascar (3), Nepal (4), Mozambique (5), Haiti (7), Afghanistan (8), Zimbabwe (9), Myanmar (10), Ethiopia (11), Cambodia (12), Thailand (14) and Malawi (15). According to Maplecroft, the countries with the most risk are characterised by high levels of poverty, dense populations, exposure to climate-related events; and their reliance on flood and drought prone agricultural land. Africa features strongly in this group, with the continent home to 12 out of the 25 countries most at risk.

Throughout 2010, changes in weather patterns have resulted in a series of devastating natural disasters, especially in south Asia, where heavy floods in Pakistan affected more than 20 million people (over 10% of the total population) and killed more than 1,700 people. “There is growing evidence climate change is increasing the intensity and frequency of climatic events,” said environmental analyst at Maplecroft, Dr Anna Moss. “Very minor changes to temperature can have major impacts on the human environment, including changes to water availability and crop productivity, the loss of land due to sea level rise and the spread of disease.”

There are 11 countries considered ‘low risk’ in the index, with Norway (170), Finland (169), Iceland (168), Ireland (167), Sweden (166) and Denmark (165) performing the best. However, Russia (117), USA (129), Germany (131), France (133) and the UK (138) are all rated as ‘medium risk’ countries, while China (49), Brazil (81) and Japan (86) feature in the ‘high risk’ category.


Related reading

New consumer banking head for Citi Asia Pacific