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Advancing adaptation: How evolving hazards could shape the agenda

McKinsey & Company · last updated

We analyze nine types of hazards across categories—heat, wildfires, drought, flooding, and cold—to understand how people and places are exposed to them today and going forward, and analyze the costs to adapt.

While hazards are often described as “extreme weather events,” in climate science the term refers to broadly both chronic and acute hazards. Three hazards we examine, heat stress, wildfire weather, and freezing days are chronic and happen every year in the places that are exposed to them. The remaining six hazards we analyze—coastal flooding, riverine (fluvial) flooding, flooding caused by excessive rainfall (pluvial), heat waves, nonsurvivable heat, and drought in agricultural areas—are acute, meaning they are intense but rare events. For acute events, places may be exposed to them, but the actual event may not manifest every year.

These hazards can occur along a continuum of intensity, frequency, or duration, requiring a threshold for each in order to define the hazard. Thresholds can be established in various ways. Since our focus is on understanding and quantifying adaptation costs, we define them by drawing on protection standards commonly established in developed economies. Of course, even though the hazards we examine are considered meaningful enough to protect against, not all hazards are created equal and their impacts could be very different. Heat stress, defined as more than a month of very hot and humid conditions each year, and heat waves, rare, multiday occurrences of local temperature extremes, can differ markedly in the nature and magnitude of their impacts, but both are considered important enough to warrant protection. Similarly, coastal flood protection standards in developed economies typically aim to withstand a one-in-100-year flood event, while pluvial flood protection standards often correspond to a one-in-20-year flood event.

Because protection standards are not always strictly defined, we exercised some judgment in our choice of thresholds and further validated them using literature from the Intergovernmental Panel on Climate Change (IPCC) on typical hazard definitions and their impacts (exhibit). Continued efforts are needed to develop robust and comparable ways to quantify the impact of hazards and their link to adaptation metrics.

Naturally, impacts do not begin to appear only when a particular threshold is crossed. Rather, our thresholds are a way to dimensionalize exposure and protection levels and apply a consistent approach in line with typical design standards for protection. We focus on a subset of climate hazards that meet three criteria: (1) they have a well-established and direct link to climate change as the primary driver; (2) they are not slow-onset events, the impacts of which emerge over time; and (3) they have sufficient data to enable spatial analysis.

For example, the link between water stress and climate change is not direct, since other factors, particularly population growth and rising demand for water, are at play. While these and other hazards may be highly relevant for adaptation planning in any given location, they fall outside the scope of our global analysis. See the technical appendix for more details.

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