Resources & Climate
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CORVI: Understanding and Measuring Climate Risk  

A guide to the Climate and Ocean Risk Vulnerability Index

By Jack Stuart Co-author ·  Sally Yozell Co-author

Billions of dollars are spent every year on climate resilience projects across the globe. As the impacts of climate change continue to grow, decision makers in governments, financial institutions, and the insurance industry need targeted risk information to ensure that limited resources are being used to safeguard people, their livelihoods, and to build a more resilient future.

In response, the Stimson Center has developed the Climate and Ocean Risk Vulnerability Index (CORVI). CORVI is an innovative tool which compares a diverse range of risks to produce a coastal city risk profile. This information can be used by decision makers to target investments to build resilience where it is needed most.

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Climate change is stressing social and environmental systems, impacting coastal ecosystems and the societies that depend on them.

According to the Intergovernmental Panel on Climate Change (IPCC), sea levels could rise by as much as one meter by 2100. This represents an immense threat to coastal cities and their residents.

Other climate and ocean risks confronting coastal cities include increasing storm intensity, warmer ocean temperatures, diminished ecosystems, and declining fish populations. At the same time, many cities in developing countries are already grappling with underlying economic and social issues, such as poverty and inequality, high levels of unemployment, outdated infrastructure, poor governance, and corruption.

These four examples demonstrate that the sharpest risks arise when climate change intersects with other social, economic, and environmental pressures

1

For small islands, extreme weather events can devastate low-lying urban areas

In September 2017, Hurricane Maria made landfall in Dominica. The storm resulted in significant storm surge, Torrential rain, and 160mph winds. Eighty percent of the population were directed affected and an estimated 95 percent of buildings were damaged or destroyed. In the capital Roseau, damage to critical infrastructure such as the wastewater treatment plant, electrical grid, and Princess Margaret Hospital severely impacted the health and livelihoods of its inhabitants. While targeted investments have since improved Dominica resilience to extreme storms, they continue to pose a long-term threat to the security of its citizens.

2

Migration to coastal megacities is stressing public and private infrastructure

In the port city of Lagos, Nigeria, population growth has been rapid, from an estimated 763,000 in 1960, to approximately 14 million today. Migration from rural areas, where climate change is a contributing factor, has increased population density in a city where two out of every three people live in informal housing settlements. These settlements which are often located at the water’s edge are increasingly at risk from storms and flooding.  

3

Climate stressors can also interact with risks which originate from outside the coastal city

In Cape Town, South Africa severe drought and outdated infrastructure has led to severe water shortages. Three years of reduced rainfall combined with growing demand led to severe water shortages and fears that Cape Town would run out of water. By reducing demand, Cape Town managed to avert “day zero“. However, long-term social tensions about unequal water access between city residents remain. 

4

Climate and ocean risks can also exacerbate the overuse of natural resources

Jakarta, Indonesia’s capital city, has a population of 10 million. Extensive ground water extraction by city residents and industry, coupled with rising sea levels, has increased the risk of flooding. These risks led President Widodo in 2019 to announce that the capital city will move from Jakarta, on the island of Java, to the province of East Kalimantan on neighboring Borneo island.  

As the impact of climate change increases, the intersection of social, economic, and environmental issues may leave governments in developing cities unable to provide basic services and protections to their citizens. In some circumstances, this can lead to social tension and instability. 

In this environment, decision makers in coastal cities, international financial institutions, insurers, and regulators need localized risk information that can help them channel investment to mitigate these diverse security threats. 

In response, the Stimson Center has developed the Climate and Ocean Risk Vulnerability Index (CORVI), a tool which compares a diverse range of risks to produce a coastal city risk profile.

By combining empirical and expert survey data to measure ecological, financial, and political risk across 10 categories and close to 100 indicators, CORVI gives critical insights into the challenge’s cities face. Each category and indicator are scored on a 1-10 scale, with 10 indicating greatest risk.

This information is used to identify areas of greatest risk so decision makers can build resilience where it is needed most.

More: The CORVI methodology.

CORVI Beneficiaries

  • For governments, CORVI is a tool to quantify the threat posed by climate change, prioritize actions, devise innovative policy solutions, and attract international funding to build resilience. 
  • For public and private investors, CORVI provides a detailed assessment of climate fragility risks designed to improve investment decisions that target actions for effective resilience building in coastal cities.
  • The insurance industry can use CORVI to improve asset pricing and risk transfer, and drive resilience by enabling investment in the most vulnerable areas. 

CORVI was piloted in two Caribbean cities: Castries, Saint Lucia and Kingston, Jamaica. CORVI results showed that while both cities have had successes in building resilience at the city level, both are also vulnerable to the risks posed by climate change. 

CORVI Risk Categories. Click to Zoom.

"In today’s resource constrained environment it’s crucial to get localized risk information into the hands of governments, international financial institutions, and insurers, so they can make smart investment decisions and take urgent action to address the climate crisis facing coastal cities."

Sally Yozell, Senior Fellow at the Stimson Center and director of the CORVI project

Castries, Saint Lucia

Built on reclaimed land and located on the west coast, Castries is the capital of Saint Lucia and its largest city. Due to urban expansion the CORVI assessment was expanded beyond Castries to include Gros Islet, which is where most of the islands tourism industry is concentrated. This decision was made in consultation with experts in Saint Lucia.

CORVI scores show that vulnerabilities are concentrated under ecological and financial risks, specifically in the Economics, Ecosystems, and Climate categories. These category scores were driven by high indicator scores related to unemployment, loss of coral reef coverage, and extreme heat events. CORVI scores in the political risk area were generally lower, driven by a confidence in the rule of law and civil society engagement indicators.

Castries risk profile shows higher financial and ecological scores​

Urban and youth unemployment, inequality, and a large informal economy contribute to the high financial risk scores. Tourism is a critical industry for Castries, employing about 40 percent of the national population. However, risk scores for this industry are scored at medium risk, reflecting the fact that CORVI risk scores are comparative to other coastal cities in the region, many of which are even more dependent on this sector.

Ecological risk scores under the Ecosystems and Climate categories were driven by losses in national coral reef and mangrove coverage, a high number of heat events, and the number of people affected by extreme weather. This was confirmed by local experts, who noted the importance of mangroves and corals to the tourism industry, as well as danger posed by extreme heat events.

While tourism is a vital part of the economy, experts also noted its negative consequences. Unregulated tourist settlement construction and pollution from a lack of effective waste management has negatively impacted the coastal environment.

Finally, lack of renewable energy generation, the dependence on oil imports, extensive coastal development and poor road conditions, all contribute to critical infrastructure risks. 

Castries is already working to improve resilience of ecosystems, flood management, and disaster planning, but more needs to be done. The CORVI risk profile identifies priority areas in need of action. 

  • Empower the city-level government to design and implement climate resilience plans 
  • Build a more sustainable tourist industry 
  • Improve urban infrastructure resilience 

By advancing cross-cutting policies and channeling resources to these areas, Castries can lessen its vulnerability to climate and ocean risks. 

More: Read the complete Castries Risk Profile.

Gros Islet

Kingston, Jamaica

CORVI results show that Kingston’s risks to climate change are diverse and spread across multiple categories. To fully capture climate and ocean risks in Kingston, the study area was expanded to include the neighboring town of Portmore, as many of its residents work in Kingston.

Kingston risk profile shows medium-high scores in seven categories.

Kingston risk profile shows medium-high scores across the board

Under the Ecosystems category, ecosystem services such as coral reefs, sea grass beds, and mangrove forests, were amongst the highest scoring indicators. Experts noted that this risk is concentrated around Kingston’s international airport, where mangrove removal has heightened the risk of flooding, both for the airport and the two-lane road which connects it to the city. While recent mangrove replanting projects have helped, this risk still remains.

Under financial risk, GDP per capita, urban unemployment, and public debt indicators scored highest in the Economics category. Informal housing construction also scored as high risk. While this indicator measures national levels of informal settlements, local experts noted that unregulated construction has occurred in key watershed areas, increasing flood risk in Kingston.

Finally, under political risk, the Governance category score was driven by a lack of confidence in the rule of law and government transparency. Both indicators measure perceptions of individual safety. Conversely, lower scores were recorded in civil society engagement and national climate adaptation plan, indicating confidence from experts in the ability of the Jamaican Government to enact effective climate adaptation policies.

The Government of Jamaica has been recognized globally for its leadership in building resilience to climate change. Its national development plan, encompassed in the Vision 2030 Report, identifies hazard risk reduction and adaptation to climate change as critical areas for development. While overall CORVI results show Kingston is well placed to combat the effects of climate change, the CORVI risk profile identifies three priority areas for action: 

  • Build Resilience in maritime ecosystems and city watersheds 
  • Improve urban city planning 
  • Continue to address social issues related to vulnerability and integrate them into disaster response planning

With these targeted efforts and implementation of Jamaica’s Vision 2030 Plan, Kingston can continue to guard against growing climate risks. 

More: Read the full Kingston Risk Profile.

Informal Housing in Kingston

2020-2021: CORVI is Expanding Fast

As the risks from climate change continue to grow, business leaders, financial institutions,and government policy makers need tools that can help them incorporate climate risk and its uncertainties into their future management decisions.

The first two CORVI city assessments demonstrate how CORVI can aid government and business decision makers and provide a holistic assessment of these diverse risk so they can be effective and prioritize actions and smart investments for risk reduction in coastal cities.

In 2020, CORVI is expanding to East Africa and the Pacific region to build to new regional datasets, and conduct detailed city assessments in Mombasa, Kenya, Dar es Salaam, Tanzania, and Suva, Fiji. Moving forward, the Stimson Center is also supporting partners to conduct additional assessments across the globe.

As more cities are added to the CORVI matrix, a comparative body of city level data will emerge, providing greater insights into the risks these cities face. Decision makers need to act now in the face of climate uncertainty. With this data and information, the CORVI tool is designed to help coastal cities build resilience against climate fragility risks before it is too late.

CORVI will help us develop an even greater understanding of the factors contributing to coastal cities’ vulnerabilities and demonstrate where there is a need for increased resilience. We’re proud to have supported the Stimson Center in this important work.

Andrew MacFarlane, Head of Reinsurance and Pricing at AXA XL
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