city climate risk · trend in natural disasters: 1980 - 2015 munich re natcat service 3 . selected...
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City Climate Risk
1
Investor Engagement and Finance Innovation for
Urban Resilience
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2
What climate-related damage is foreseen?
What is the financial extent of the risk?
Are investors engaged to improve safety, livelihoods?
What City finance innovation is anticipated?
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Trend in Natural Disasters: 1980 - 2015
Munich Re NatCat Service 3
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Selected Significant Extreme Weather Events 2014-2015
4 NOAA
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2016: Billion Dollar Weather and Climate Disasters
5 NOAA
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Zwillow: In US 1.9M homes at risk
6 Zwillow
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Annual Expected Loss by Zip Code
7
Alex Kaplan | Global Partnerships | October 2, 2014
• Current drivers of loss : east and south shores of Staten Is land, southern Brooklyn and
Queens, Brooklyn and Queens waterfront and southern Manhattan.
• Under future scenarios: Same geographic regions , plus northern Queens and the
Bronx
• Under 2 0 5 0 s scenario: 4 0 0 % increase in ZIP codes which have an AEL of USD 3 0
million
ResultsAnnual Expected Loss by ZIP code
Source: A Stronger, More Resilient New York
10
SwissRe:A More
Resilient NYC
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Sandy Supplemental vs. ‘12 Agency Outlays
8 Office of Management &
Budget
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Climate Change Slows Middle Class Emergence
9
• Climate change threatens
to erode progress made on
poverty reduction
• Global incomes could
decline 23 percent by 2100
relative to a world without
climate change
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Climate Change is Not the Only Driver of Risk
10
Alex Kaplan | Global Partnerships | October 2, 2014
Climate change is not the main driver for ris ing natural catas trophe losses in recent decades
Growth of wealth
Concentration of values in
exposed areas (e .g. coasts)
Increasing vulnerability
Climate change as a potential
new driver in future (s torms,
floods, droughts)
Ocean Drive, FL, 2 013Ocean Drive , FL, 19 2 6 Drivers
3
Ocean Drive, FL 1926 Ocean Drive FL
2013
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American Infrastructure Grade: D+
11
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12
What climate-related damage is foreseen?
What is the financial extent of the risk?
Are investors engaged to improve safety, livelihoods?
What City finance innovation is anticipated?
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AUM $75T (‘15) | Real Estate Asset Risk $35T (‘70)
13 UNFCCC 2016 Biennial
review of climate finance
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Climate Risk & Business Cycle Timelines Misaligned
15
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WEF: Global Risk Report ‘17 – Climate Risk Impact
World Economic Forum Global Risk
Perception Survey
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Climate Adaptation: Risk and Opportunity
Global Adaptation and Resilience
Fund Finance for Resilience 17
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18
What climate-related damage is foreseen?
What is the financial extent of the risk?
Are investors engaged to improve safety, livelihoods?
What City finance innovation is anticipated?
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Business Risk from Climate Change is Beyond the Fenceline
19
© 2017 Climate Resilience Consulting– All rights reserved
: Weathering the Storm, C2ES
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Corporate Action: ERM Innovation CSR Supply Chain PPP
20
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Example Florida
0.03 0.04
5 6 7
Levee & Floodwall
Sandbags
0.05
0.08
0.08
0.13
0.35
15
0.80 0.93 0.99 1.09 1.30
0.98 1.01
1.47
1.54
1.54
1.75 2.56 2.96
1.54 2.15
3.70
6.93
7.54
10.26
0 1 18 19
Elevation, retrofit
Replacement under- grounding, trans.
Targeted under- grounding, trans.
17 16 14 12 13 Masonry, new
Opening protection, retrofit
11 10 9 8 4 2 3
11
10
9
8
7
6
5
4
3
2
1
0
0.69
0 0 0.02 0.03
Beach Nourishment (50 ft)
Beach Nourishment (100 ft)
Roof cover, new
Roof truss, new Roof deck
attachment, new
Opening protection, new Roof shape
new
Temp. floodwalls
Vegetation Mgmt
Elevation – new homes
Roof cover, retrofit
Targeting hardening,
dist.
Roof truss, retrofit
Substation Backup generators
Local levees
Targeted hardening, transmission
Deductibles - residential
Deductibles - commercial
Engineering based FRT penetration
distribution Road elevation
Targeted undergrounding,
retrofit Replacement
undergrounding, dist.
Elevation, prioritized
Top layer risk transfer
Measures below
this line have net
economic benefits
Cost/benefit
Averted loss
$ Billions
Calculated in 2008 dollars for the average climate scenario
~40% of total
expected loss can
be averted cost-
effectively
$30 billion
Annual
expected
Adaptation Options (FL example)
10
loss
SwissRe
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Potential Sovereign Rating Downgrade due to Climate Risk
12
4.8
4.3
4.5
3.9
2.5
2.8
2.2
1.5
1.8
1.4
1.2
0.5
0.5
0.4
0.4
0.3
0.3
0.2
0.2
0.5
0.1
0.5
0.9
0.3
0.2
0.8
0.4
0.2
0.2
0.2
0.3
0.2
0 1 1 2 2 3 3 4 4 5 5
Barbados
Bahamas
Fiji
Jamaica
Dom Rep
Aruba
Bangladesh
Bermuda
Vietnam
Guatemala
Honduras
Taiwan
Trinidad and Tobago
Philippines
Colombia
Mexico
Thailand
Indonesia
Potential Downgrade, status-quo climate
Added potential downgrades due to climate change
Standard & Poors
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S&P’s Green Bond Evaluation
8
* eKPI – Environmental Key Performance
Indicator
Transparency
• Use of proceeds reporting
• Reporting comprehensiveness
Governance
• Management of proceeds
• Impact assessment structure
(Mitigation
• Buildings, Industrial Efficiencies, Energy Infrastructure, Transport and Water
Adaptation
• Increased resilience
eKPIs • Carbon
• Water
• Waste
• Land Use
• Air and Water Pollution
eKPIs
• Reduction in financial and non-financial damage
Comprehensive Environmental Impact (Final score – weighted aggregate)
Net Benefit
• Local Baseline
• Best in Class
• Hierarchy Overlay
Standard & Poors
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European Law: French Art. 173-VI; UK Adaptation Reporting Power
25 Standard & Poors
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Climate Risk Disclosure
26 Ceres
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Investor Awareness of Climate Risk
27
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Green Bonds $42B ‘15 ($11B ‘13 )
28
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Catastrophe Bond Transactions
29 Artemis
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Oasis Platform for Catastrophe and Climate Change Risk Assessment
Innovative Adaptation Finance Mechanisms
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Global Adaptation and Resilience Investment Work Group
31
THE INVESTMENT OPPORTUNITY $500 million - $1 billion growth equity vehicle that invests in 10 - 20 companies
Water Efficiency Devices
Climate Risk Maps
Climate Adaptation Tools
Drought Resistant Agriculture
Climate Risk Consulting/Engineering
Weather/Climate Analytics
Flood Risk Models
Climate Resilient Healthcare
Global Adaptation and Resilience Fund
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What climate-related damage is foreseen?
What is the financial extent of the risk?
Are investors engaged to improve safety, livelihoods?
What City finance innovation is anticipated?
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Every $1 for Risk Mitigation Saves Society $4
33 Multihazard Mitigation Council
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Bang for the Buck– Infrastructure Spend $1.44
34 Moody’s
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Cities know the Risks are Beyond Climate Vulnerability
35 ND-Global Adaptation Initiative
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National Disaster Resilience Competition
36 City of Chicago
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C40 Cities Finance Facility
37 Clinton Climate Initiative C40
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Rockefeller Foundation/100 Resilient Cities Technical Advisory Facility
38 100 Resilient Cities
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Urban Resilience to Extremes SRN
39 URExSRN Tischa Munoz
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Joyce Coffee, www.climateresilienceconsulting.com
40
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Parking lot
41
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Joyce Coffee [email protected]