While we are probably several years away from an absolute quantification of climate risk, due to the fact that climate risk assessment is a relatively new science, there is an opportunity to engage the industry stakeholders that have been thinking about and managing risk successfully for years; largely, city planning units and emergency response teams, insurance, and the investment community. Unfortunately, these stakeholders have not always worked in tandem, so local government approaches are not always aligned with insurance and investment calculus. Through C40?s Network of Megacities and the CGI Commitment platform, there is an opportunity to align approaches to address a common priority.
Drawing on the successful experiences of C40?s work to develop a common global standard for measuring community-scale greenhouse gas emissions (GPC), the C40 is launching an effort to develop a common approach, or framework, to assessing, prioritizing, and managing climate risk that could be used by cities throughout the C40 Network to help them qualify the impact of climate change on their local environment and to effectively prioritize the most significant impacts to local human, economic and environmental capital.
The development of a global framework for community-scale adaptation risk assessment will: 1) Enable cities to assess local climate risks with confidence, building on the experience of peers who face similar risks and allow for local prioritizing of investments to mitigate those risks; 2) Enable banks to better structure lending for resilient infrastructure, and the develop standards for accessing adaptation-linked finance; 3) Enable insurance companies to approach the valuation of risk in a uniform way, ensuring continued investment in urban infrastructure.
A Risk Assessment network will be convened to collectively determine the most suitable framework for this global urban risk assessment. Over a three month period following an initial meeting in Rotterdam June 4-5, 2013, the network members will be identified drawing from city officials from between 5 and 10 volunteer C40 cities that have a dedicated commitment to developing a framework for use in their city that could also be used globally, working in close partnership with a number of key private sector stakeholders and advisors. C40 will provide the coordination structure to this group of cities and other partners largely through the direction of a dedicated C40 staff person serving as the Risk Assessment Network Director working in close partnership with a designated network chair city that will contribute their own staff time and Mayoral commitment to chairing the network. Together, this group of cities will proactively and responsively engage with private sector partners that are leading in the field of climate risk assessment for urban areas that can offer their technical assistance and services to develop the framework. This network will meet using a platform for virtual exchange (for conference calling and webinars with a facility for document storage and exchange) and through in-person gatherings, including workshops.
C40 will launch a Climate Risk Assessment Network to bring together C40 Cities and outside partners such as lending institutions (including development banks), technical experts (including academia and global consultancies) and the insurance industry to develop a common risk assessment framework. This network will work to achieve the following goals:
- In 1 year, the network will have successfully developed a beta risk assessment framework, to be piloted in 10 C40 cities
- Following this pilot phase, the network will be ready to formally launch the C40 Climate Risk Assessment Framework, having successfully completed the pilot and revised the framework accordingly
- The ultimate goal, as with the GPC, is that the framework becomes the global approach by which all cities assess and prioritize risk and plan and implement accordingly
The first convening of the Climate Risk Assessment Network will take place in Rotterdam June 5-6, 2013 to lay the groundwork and next steps for the index development. The purpose of the initial C40 Climate Risk Assessment Convening will be to define the key principles for participating cities critical to incorporate into a useful and effective framework.
Following this, C40 will convene a working group, bringing together Network leadership cities, private sector stakeholders, particularly the insurance and finance industries as well as international consultancies, who are interested in devoting time and person power to develop a common municipal framework for assessing and prioritizing risk. C40?s Network Director will serve as a the staff lead to coordinate the work from participating partners with the aim of publishing a draft framework for comment, consideration and ultimately piloting within one year of initial convening. This working group will jointly develop a workplan, timeline and ultimately a draft framework for piloting within a select group of C40 cities.
Climate change risks to cities are manifesting in increasingly frequent and significant ways; and an increasing number of cities are prioritizing improved risk assessment and management. In 2012, 91% of C40 cites reporting through CDP had identified some sort of physical risks from climate change. Generally these risks fall into three categories, impacts associated with: 1) sea level rise; 2) extreme weather events; and 3) increasing temperatures, and particularly heat waves. The challenges associated with these impacts may be felt in many and disparate ways, most of which have extreme social and economic implications. Key challenges include flooding and associated water quality degradation, air quality degradation, ocean acidification and associated impacts on marine life, changing agricultural profiles, disease incidence, and infrastructure vulnerability. Many cities are taking action to better understand the scale and scope of those risks. To date, 75% of C40 cities reporting to CDP are already attempting to quantify the social, financial, and environmental impact of these risks and to assess future infrastructure investments using this information and 73% of cities have developed some kind of plan for how they will increase the resiliency of their cities. On the private sector side, climate risk assessment is also increasingly incorporated into insurance equations and financing approaches, but generally without input from the cities that are experiencing the impact of climate change, and risk planning on the ground. Despite the efforts both on the part of cities and the private sector to measure, plan for, and adapt to climate risk, there is a high degree of uncertainty and variability in methodology and approach. This creates significant challenges to how cities, insurance companies, and lending institutions quantify and respond strategically to climate risk. In the absence of a consistent and accepted way to approach investments in resilient infrastructure and emergency response, the insurance and banking industries have developed their own assessment frameworks, often without input from the cities that are actually dealing with these impacts on the ground. While these frameworks may attempt to account for climate change, they are rarely transparent and could certainly benefit from the input of city officials who manage the public infrastructure the private sector is investing to develop and insure. In 2008, C40 convened the first meeting of cities to discuss climate adaptation plans in Tokyo. From that meeting a subset of cities formed the first C40 network called ?Connecting Delta Cities? to unite delta cities in their desire to make their cities climate proof through innovative adaptation strategies and best practice and knowledge sharing. It is through the work of the 10 active cities in this network, as well as others in the global Network, that C40 identified the opportunity to develop a common approach to risk assessment, and to support a broader network, connecting even more cities in assessing, and adapting to, increasing climate threats.