Climate Change Information Sheet 15
Infrastructure, industry, and human settlements
- Climate change will have some negative effects on humanity's physical assets. Some of the most valuable infrastructure includes industrial plants and products; equipment for producing and distributing energy; roads, ports, and other transportation facilities; residential and commercial properties; and coastal embankments. While climate change may have important consequences for infrastructure, they are likely to be smaller than those resulting from demographic, technological, and market changes, in good part because of the many opportunities for adaptation.
- Industrial, energy, and transport infrastructure may be damaged. Changes in temperature, precipitation, or extreme events can destroy exposed infra-structure or affect productive output. Among the extreme events that may become more frequent or intense in some regions are coastal storm surges, floods, and landslides induced by local downpours, windstorms, rapid snow-melt, tropical cyclones and hurricanes, and drought-induced forest and bush fires.
- Some economic activities are particularly vulnerable. In general, the climate sensitivity of the industry, energy, and transportation sectors is relatively low compared to that of agriculture and natural ecosystems. Most susceptible to surprises, sudden changes, and extreme events are agro-industry; the production of hydroelectricity, biomass, and other forms of renewable energy; energy use; construction; some transportation activities; and infrastructure located in coastal zones, on permafrost, or other vulnerable areas.
- Rising sea levels could have the most dramatic and direct consequences. Many coastlines are highly developed and contain human settlements, industry, ports, and other infrastructure. Among the most vulnerable are some small island nations, developing countries, and densely populated coasts that currently lack extensive sea and coastal defense systems. Sea-level rise, storm surges, and flooding could force populations to migrate, with additional consequences for infrastructure further in-land.
- The property insurance sector is particularly vulnerable to extreme climate events. A greater risk of extreme events due to climate change could lead to higher insurance premiums or the withdrawal of insurance coverage in some vulnerable areas. Changes in climate variability and the risk of extreme events may be hard to detect or predict, making it difficult for insurance companies to adjust their premiums correctly. If such problems lead these firms to insolvency, they may not be able to honor outstanding insurance contracts. This in turn could weaken other economic sectors, such as banking.
- Industry would experience many indirect effects . . . Because economic activities are so interconnected, an impact on one sector can affect the entire economy. Industry, energy, and transportation are likely to feel knock-on effects via climate-sensitive resource sectors such as agro-industry and biomass production. Climate-sensitive markets will also send signals, such as a changing energy demand for heating or cooling buildings. The result will be an aggregation of many individual impacts.
- . . . as would human settlements. For example, a decline in the productivity of natural resources in rural areas may accelerate rural-to-urban migration, especially in the developing world. Migration in response to chronic crop failures, regional flooding, or drought would put pressure on existing housing, water, food, and health systems.
- Settlements stressed by population growth, poverty, industrialization, and environmental degradation are the most vulnerable. Also at risk are large primary coastal cities, squatter camps located in flood plains and on steep hillsides, settlements in forested areas vulnerable to increased seasonal wildfires, and communities that depend on subsistence agriculture or on commercial fishing. In all cases, the poorest people will be the most affected.
- Human infrastructure can be protected through well-chosen policies and management strategies. The life cycles for planning and investing in infrastructure are often short enough to allow managers to anticipate future climate change. They could adapt to climate change by replacing capital at the normal pace with more appropriate designs and locations. However, it cannot be assumed that people and organizations will always adopt such adaptation strategies automatically. Governments may need to set policy and regulatory frameworks to encourage private action. They may also need to take direct action to protect certain vulnerable infrastructure. The message, then, is clear: future risks can be reduced if climate change is incorporated into all current planning.
- Diversifying the economy can offer additional protection. Developing countries that rely on a limited number of crops or other resources are economically vulnerable to climate change. When combined with improved management practices such as "integrated coastal management", economic diversification can be an important precautionary response. However, these strategies will often encounter resistance. Some of the possible constraints are technological advancement, human resources, finances, cultural and social sensitivities, and political and legal obstacles. The lack of financial and human resources is especially acute for developing countries.
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