BusinessWorld

Measuring What Matters: A New Approach to Assessing Sovereign Climate Risk

41% of the global population and 57% of the economy could be exposed to flooding by 2040 and over a third of today’s agricultural land will be under high water stress

London, United Kingdom: 

Moody’s affiliate Four Twenty Seven today released a report analyzing the future exposure of the global population, the economy, and agriculture to a range of climate hazards, exploring both global trends and findings by country. Leveraging new analytics developed by Four Twenty Seven, the report assesses exposure to floods, heat stress, hurricanes and typhoons, rising sea levels, wildfires, and water stress and is based on the only known global dataset matching physical climate risk exposure to population location, GDP Purchasing Power Parity (PPP), and agricultural areas within countries.

“This novel dataset provides a detailed view of the exposure of key human and economic assets around the world. Understanding exposure is critical for investors and credit institutions to price climate risk, but also to help direct finance flows towards adaptation and resilience where they’re most needed,” says Emilie Mazzacurati, Global Head of Moody’s Climate Solutions in Moody’s ESG Solutions Group, and Four Twenty Seven’s Founder & CEO.

The findings of Measuring What Matters: A New Approach to Assessing Sovereign Climate Risk have significant implications for human health, food security and economic productivity.

Key findings include:

  • By 2040, the number of people exposed to damaging floods is predicted to rise from 2.2 billion to 3.6 billion people, or from 28% to 41% of the global population, with roughly $78 trillion, equivalent to about 57% of the world’s current GDP exposed to flooding.
  • Over 25% of the world’s population in 2040 could be in areas where the frequency and severity of hot days far exceeds local historical extremes, with negative implications for human health, labor productivity, and agriculture. In some areas of Latin America, climate change will expose 80-100% of agriculture to increased heat stress in 2040.
  • By 2040, over a third of today’s agricultural area will be subject to high water stress. In Africa, over 125 million people and over 35 million hectares of agriculture will be exposed to increased water stress in the future, threatening regional food security.
  • By 2040, nearly a third of the world’s population may live in areas where the meteorological conditions and vegetative fuel availability would allow wildfires to spread if ignited.
  • Over half of the population in small island developing nations are exposed to either hurricanes and typhoons or coastal flooding amplified by sea level rise. In the United States and China alone, over $10 Trillion worth of GDP (PPP) is exposed to hurricanes and typhoons.

A full copy of the report can be found here.

The full sovereign dataset is available from Moody’s ESG Solutions on request.

Disclaimer: This content is distributed by Business Wire India.

Related Articles

Back to top button