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Verisk Maplecroft and CCC warn of dangers in cascading climate risk

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The impact of the failure to adapt to the risks of climate change has been rising up the agenda, with high temperatures in the UK forcing the closure of public rail infrastructure across parts of the country.

In the UK the Climate Change Committee (CCC) has issued stark warnings, while global risk advisory and strategic consultant Verisk Maplecroft (VM) has published its Environmental Risk Outlook 2022, warning of the effects of cascading climate risk.

Second order risks widen impact of climate change

Cascading risks should be considered second order risks, those that follow from a particular problem but then accelerate. Cascading risks are those with a domino effect, such as wildfires leaving the landscape open to the risk of flooding and landslides as the cover is denuded. They can begin in small areas but can intensify and have influence over surprisingly large areas. In climate risk terms, these are things like mass migration and social unrest.

VM’s research covered 196 countries to assess how cascading climate risk could affect societies, populations and businesses, and split the countries assessed into three groups: insulated, precarious and vulnerable nations. What must be remembered is that, in a globalised world, risks can cascade far beyond the borders of one nation.

Thinking about the impact of the Russian invasion of Ukraine, the research warns that economically and geopolitically strategic nations such as Brazil, Mexico, Vietnam and Russia are also in a dangerous position.

Will Nichols, head of climate risk and resilience at VM said: “If countries like these succumb to extreme bouts of climate-induced instability, the knock-on impacts could overwhelm economies and populations across the globe.”

Countries at risk of cascading events

Dr Richard Hewston said: “Organisations and governments are beginning to create extensive mitigation plans for physical climate threats, yet the low levels of investment in looking at the secondary risks show that most are almost entirely unprepared to deal with the wider political, economic and developmental impacts of a warming planet. And as the intensity of heatwaves, storms and floods speeds up, so do the time horizons for rising global instability.”

The Cascading Climate Risk Resilience Model (CCRRM) on which the research was based includes a broad spectrum of interconnected factors, such as physical exposure to weather-related events, political stability, economic power, resource security, civil unrest, poverty, the human rights situation, conflict and strength of infrastructure – all of which are crucial to a country’s resilience.

Climate risks and the domino effect

As Nicholls says: “Think about each one of these factors as a block in a dam: the more blocks a country has in place, the stronger the protection it creates for its society. But if the blocks become fragile, broken or crumble entirely, the whole structure is undermined, magnifying the potential for cascading climate risks to break through and flood a country with destabilising impacts.” This is particularly pertinent in terms of extreme weather.

While the UK appeared in the most insulated category, that doesn’t mean that the UK will avoid spill-over risk, nor does it mean that the country is doing enough to manage its own domestic risk cascades. The UK’s Climate Change Committee (CC) warned earlier in July that infrastructure providers were not addressing the challenges of cascading risks.

According to the committee, electricity, digital, water, gas, transport, road and airport operations are not effectively disclosing the risk to connected infrastructure. As the UK temperature hit 40 degrees in July which resulted in closing sections of the national rail system, this is something that is going to need to be considered. As the old adage goes, you can’t manage what you can’t measure, and it seems as if the UK has some way to go in measuring infrastructure risk.

UK Climate Change Committee concerned about lack of climate risk reporting

This year saw the CCC undertake the third Adaptation Reporting Power (ARP3) process, where it undertakes an assessment of climate risk measurement, reporting and adaptation plans from 90 of the nation’s key infrastructure owners and operators.

Respondents to that survey included National Grid, Network Rail, Highways England, the Environment Agency, UK Power Networks and a swathe of airports, water companies and telecommunications firms.

Of the 90 organisations, 20% submitted no reports to the CCC when invited. Around half of the non-reporting organisations had reported previously, with the CCC concerned that engagement levels with the process may be decreasing at a time when they need to be increasing. Among the non-reporting organisations were six port authorities and organisations in the aviation, water, rail, finance and heritage conservation sectors.

Adaptation critical for infrastructure during extreme weather events

In response, the CCC has issued a report to the government calling for a mandatory requirement on utilities to set out the actions they are taking to tackle climate-related risks to their operations.

Baroness Brown, chair of the CCC’s Adaptation Committee said that “in this report we’ve uncovered a key gap in the country’s national adaptation planning: to varying degrees the organisations we have assessed are not prepared for cascading infrastructure failures. For example, a flood might damage an electricity substation, which has a knock-on effect on the transport network due to a power outage. These dependencies, if disrupted, have potentially devastating consequences.”

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