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Rising tides could roil global wealth

Lachlan Maddock
— 1 minute read

China’s manufacturing heartland is the area most at risk from sea level rise worldwide, threatening 3.8 per cent of global wealth, according to strategic consulting firm Verisk Maplecroft.

The Pearl River Delta Economic Zone (PRDEZ) is host to the bulk of China’s automotive, petrochemical and electronics powerhouses and is the starting point for countless global supply chains, generating around 20 per cent of Chinese GDP and 3.8 per cent of global wealth. 

But around a fifth of urban area in Guangzhou – one of the hubs in the PRDEZ and China’s third largest city – is classified as high risk or extreme risk in Verisk Maplecroft’s Sea Level Rise Index. In 1998, coastal flooding caused around US$20 billion in damage across the region, and rising sea levels will amplify that damage as flooding and typhoons become more common.

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“While Guangzhou is transitioning towards a more diverse economic mix, with a greater contribution from financial services, its core economic manufacturing activities are not easily relocated and have long investment cycles,” the report reads.  

“And Guangzhou’s situation is not atypical. Our analysis reveals that across China [US$348 billion] of GDP and 7.8 million people are in areas at high and extreme risk of sea level rise in the coming century.”

The world is currently witnessing what happens when large swathes of Chinese manufacturing are shut down as spread of COVID-19 necessitates quarantines and travel bans. Sea level rise could roil commodities markets and cause massive disruption to global supply chains, but the billions of public and private investment needed to combat it – particularly in the developing world, which is most at risk – are increasingly out of reach. 

“What is clear is that the window to stave off the worst impacts is closing, and yet investments remain well short of what is required,” the report reads.

“And, if rates of sea level rise are accelerating as many researchers have suggested, the extent of the problems we will face this coming century could be well beyond the means of even wealthy nations to cope with.”

 

Rising tides could roil global wealth
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