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Building disaster resilience in Asia's coastal cities - the business case
by Helen Roeth  helen.roeth@csr-asia.com
19 Apr 2017

Asia’s cities are undergoing rapid growth – growth that will ultimately transform how cities are developed, built, and governed. While urbanisation can drive prosperity, the current rapid and uncontrolled growth of cities in Asia’s emerging economies has often undermined quality of life and exacerbated inequalities and vulnerabilities.

One of the greatest risks faced by many of the region’s urban centres is the growing vulnerability to natural hazards ranging from storms, flooding and landslides to earthquakes. Climate change will further increase risks in coastal cities associated with sea-level rise, hurricanes and storm surges, while inland cities across parts of Central and South Asia are facing increased periods of heat and drought .

An OECD study estimates that “climate change combined with rapid population increases, economic growth and land subsidence could lead to a more than 9-fold increase in the global risk of floods in large port cities between now and 2050.” Taking into account existing coastal protection, the study ranks cities most at risk today. Included in its ranking are Asia’s major manufacturing, logistics, and financial hubs such as Guangzhou, Shenzhen, Nagoya, and Mumbai.

The focus on economic growth that has dominated the governance of many Asian cities has often coincided with economic deregulation and allowed for a greater role of the private sector in land and infrastructure development. It has led to rapid urbanisation at the cost of environmental services, particularly those essential in mitigating the impacts of natural hazards. The Pearl River Delta (PRD) on China’s South coast, for example, is an example of rapid urbanisation driven by economic development in a low-lying coastal area faced by environmental deterioration and increasing flood risks. Formerly an agricultural delta, the PRD is now considered the world’s largest urban area in both size and population.

The PRD comprises of 11 major cities including the manufacturing centres Shenzhen, Guangzhou, Foshan and Dongguan as well as the financial hub Hong Kong, which makes the PRD one of the most important economic centres in East Asia. Consisting mainly of steep hills and floodplains in a low-lying coastal area, the PRD faces substantial risks from both inland and coastal flooding. Typhoons, storm surges, and heavy rainfall are common during the wet season, which runs from May to September. Land-use changes have been a key contributing factor to the PRD’s substantial flooding risks. Land reclamation, for example, has resulted in the loss of coastal wetlands, which act as natural barriers against tropical storms. Land subsidence driven by anthropogenic activities such as groundwater extraction further aggravates the impacts of anticipated sea-level rise.

According to Verisk Maplecroft, natural hazards such as flooding constitute one of the most severe disrupters of business and supply chain continuity with far-reaching and long-lasting supply chain impacts and major economic output and growth implications for emerging markets’ key cities. Beyond direct impacts such as flooded factories, these hazards can affect critical infrastructure services such as electricity and water supply and transportation networks. In the region’s globally connected manufacturing hubs, disruption of production can have far-reaching effects beyond the affected area. This became most apparent in the aftermath of the 2011 floods in Bangkok that disrupted global electronics and auto supply chains. A Financial Times article at that time made the poignant observation that preparedness plans fail if the lead time is only few hours to safeguard heavy industrial machinery fixed to the ground. It also noted that there is no easy insurance solution for losses related to delayed product launches, as happened to Sony and its then new high-end NEX-7 camera.

There is a growing need for integration of disaster risk reduction (DRR) into development plans through risk-sensitive land-use planning. Urban policymakers are considered at the frontlines for reducing vulnerabilities to natural hazards as they guide the use and development of land. However, many governments in Asia do not have the human and financial resources to enforce policies and regulations or establish integrated planning and management systems required for long-term, risk-sensitive, sustainable urban development. Their limited resources are stretched as cities are struggling with various simultaneous challenges including urban poverty, lack of access to infrastructure, deteriorating air standards, water pollution, and traffic congestion to name a few.

The increasing urgency brought by climate change accelerated natural hazards in coastal cities does not provide the convenience of waiting for municipal governments to act. It requires leadership by stakeholders beyond the public sector in identifying, understanding, and communicating natural hazard risks and to create broader awareness, which can ultimately ensure effective actions are taken for risk mitigation. Many businesses in the region have the resources, expertise, and innovation needed to effectively address the challenges and risks faced by the public sector’s financial, institutional, and capacity shortcomings.

The business case to step-up is strong: while significant, supply chain risk management approaches will not help businesses prevent losses and damages associated with disruptions at the scale seen during the Bangkok flooding or the Tohoku earthquake off Japan’s Pacific coast in 2011. Natural hazards are becoming an increasingly common supply chain risk in the region. As an example, typhoons in Asia accounted for two of the top five worst supply chain disruptions globally in 2014: typhoon Rammasun and Halong affected business revenues by 1.5 billion and more than 10 billion respectively.

Businesses with major investments in Asia’s high-risk, coastal urban centres need to review their business models and their focus on short-term goals. While long-term climate change impacts cannot be predicted with certainty, assets and investments can only be protected by informed, long-term strategies. Pro-actively participating at the urban planning level will provide businesses with greater insights into current and future risks and create a better understanding of and ability to help implement effective risk mitigation measures beyond the boundaries of their own operations.

Often, ensuring investments skirt high-risk areas such as coastal floodplains or working with municipal governments in implementing DRR and mitigation measures such as the restoration of important coastal ecosystems can be more effective. It can also be less costly than protection measures such as raising the height of existing developments and protecting them with levees and seawalls (considered as short-term solutions engineered for certain storm size or sea level rise only). On the contrary, given the unpredictability of future extreme events engineered coastal protection measures can result in a false sense of security and encourage continued investments in high-risk areas.


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