A new study into climate risks includes a warning that governments are failing to assess the risk of secondary effects of climate change such as social unrest and mass migration – and that businesses are not factoring these knock-on impacts into their risk management.
UK firm Verisk Maplecroft said today that data in its research on the performance of 196 countries on how “cascading” climate risks would affect societies, populations and business around the world showed that the world was split into three near-even groups of insulated, precarious and vulnerable nations.
Will Nichols, head of climate risk and resilience at the Bath-based firm, said: “Organisations and governments have extensive risk-mitigation plans for physical climate threats, yet the lack of investment in assessing secondary risks means most are woefully unprepared to deal with the political, economic, and developmental impacts of a warming planet.”
These second-order effects include civil unrest, political instability, mass migration, economic fragility, resource security, worsening human rights and conflict, the firm said, adding that they would increase in prevalence as the severity of climate-related events intensified.
Nichols said it was not just governments that had a blind spot to these threats.
“The majority of businesses are not currently factoring cascading climate impacts into scenario analysis and risk-management approaches – that needs to change if they are going to build resilience in the face of an uncertain future,” he said.
According to the research, developing economies in Africa and Asia, including India, Indonesia and South Africa, would bear the brunt with potentially severe implications for the stability of their economies and societies.
“But, other geostrategic nations, such as Brazil, Mexico and Russia, are in the ‘precarious’ grouping and could experience significant instability from secondary climate risks,” the consultancy said.
Ultimately, it said, no country would remain immune, because these risks would cross borders and regions, creating new geopolitical flashpoints.
The firm said second-order effects were already emerging, mostly in the form of migration from countries in Central America and Sub-Saharan Africa towards their richer northern neighbours.
Ukraine served as an example of how conflict would exacerbate the susceptibility of a country to cascading risks, Verisk Maplecroft said. The European country currently shared 35% of traits with the “vulnerable” group, it said, but the researchers expected the ongoing conflict to lower its resilience much further.
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