Understanding such exposure to risk is critical for investors and credit institutions to direct finance flows toward 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 and CEO.
Other findings of Measuring What Matters: A New Approach to Assessing Sovereign Climate Risk 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% to 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.