Protecting Asia's coastal cities: How can vulnerable economic hubs better prepare for a beyond-2°C scenario?

Republished from Eco-Business: Original article here.

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Urban Asia is facing a perfect storm. Sea levels are rising, rainfall is becoming erratic – worsening problems that low-lying areas already face – yet more people than ever are also moving into cities to seek economic opportunities, leading to tensions and pressures. As the world edges towards breaching the 1.5°C safety limit for global warming, the oceans and tradewinds that once supported the growth of Asia’s coastal cities could soon bring havoc and suffering instead.

United Nations researchers warned at the end of 2023 that the world is heading towards a global temperature rise of 2.5°C to 2.9°C this century without more ambitious decarbonisation efforts. While climate mitigation efforts continue, the UN projection raises questions on whether policymakers and communities are sufficiently prepared for the risks that a warmer-than-expected world brings.

Many of Asia’s seaside urban centres are on the forefront of climate risks. Beyond floods and storms, dense settlements are also particularly vulnerable to extreme heat. The resilience of large cities is being stretched by population growth, limited climate funding and in some instances, government inefficiencies. As cities are often reliant on hinterlands and trade interconnectivity for a stable food supply and other needs to ensure their liveability and viability, faraway disruptions can also hurt its residents.

The future of millions of residents, along with trillions of dollars of wealth, could be at stake unless the region gets climate adaptation right in the decades ahead. This report provides an overview of the vulnerabilities of coastal cities, and dives into some of the key solutions for protecting lives and livelihoods.

Mapping the risks

The dangers coastal Asian cities face are clear. Typhoon Doksuri in July 2023 killed 108 people and caused US$25 billion in damages, as the storm lashed major urban areas in northern Philippines and China – including capital region Beijing.

Climate change may not increase the frequency of storms, but they are getting more severe. Different extreme weather events are also happening back-to-back: Typhoon Doksuri arrived shortly after severe heatwaves swept over South and Southeast Asia. Coastal and estuarine cities were not spared – Thailand's Bangkok and India's Mumbai recorded temperatures of 35°C to 40°C. One year on, temperatures in the 40-50°C range is back again in South and Southeast Asia.

In the longer run, Bangkok, along with Vietnam's Ho Chi Minh City and Indonesian capital Jakarta, could also face a double-whammy of sea-level rise and sinking land. Meanwhile, warmer oceans are expected to decimate coral reefs – the spawning ground for many marine species that communities rely on for food.

In a 2022 report, the UN’s Intergovernmental Panel on Climate Change (IPCC) noted that East and Southeast Asia will be most affected by sea-level rise. About 100 million people in East Asia could face severe flooding should the seas rise by two metres, along with over 50 million people each in South and Southeast Asia. In East Asia, over 1,000 flights a year would be disrupted, higher than anywhere else globally. Two metres of sea-level rise is generally considered unlikely this century, though possible in longer timeframes or during major storms.

Physical hazards alone do not paint an accurate picture of climate hazards. The IPCC report ascribed three more factors to understanding risk: how vulnerable a population is to catastrophes – controlled by socioeconomics and inequality; the ability to respond to extreme events – contingent on human behaviour, financing and governance; as well as how exposed a population is to threats – dependent on geography and urban growth.

The additional considerations matter to Asia, given the high levels of inequality and informality in many of its large and growing cities, along with fiscal constraints in emerging economies.

Are Asia’s coastal cities prepared for beyond 2°C of global warming? “I would say no – that is the very short answer. Cities aren't planning for it. They are beginning to take action, but there is not enough money to help them,” said Kavita Sinha, private sector facility director at the multilateral Green Climate Fund (GCF).

“Cities that become more resilient will be those that will be attracting more economic activities, and cities that don't act will lose as a result. You cannot separate macroeconomic stability and economic advantage from building resilience and adaptation in coastal cities,” Sinha added.

Beefing up infrastructure

Physical defences to rising climate risks form the core component of urban climate adaptation. Human infrastructure has always been built to fit societies' unique environments, but the pace of change wrought by global warming has necessitated increasingly urgent and complex upgrades to coastal cities.

Rising sea-levels and increasingly severe seaborne storms are common risks that such settlements face. In response, China has been trialling the concept of “sponge cities”, where parks and lakes – “low-impact” developments – channel excess water into underground storage. In the past decade, major coastal cities including Tianjin, Xiamen and Shanghai have been retrofitted with such features.

Sponge cities offer benefits beyond flood management: parks keep the surroundings cool on hot days, and water it traps is more easily filtered and reused compared to sewage effluent. However, high upfront costs, along with their inability to contain recent fatal floods, have hampered development. Under 10 per cent of Chinese cities have laws to manage sponge city construction, a study found last year. Researchers say better planning is needed for custom-fit urban designs, along with giving sponge cities a greater legal mandate on public health to demonstrate their utility.

“The barriers are social, institutional, and political, rather than technical. To gain stakeholder support for relevant policies, it is crucial to demonstrate that sponge cities can bring greater economic and social benefits,” researchers wrote in a report last October.

Across Southeast Asia, a mix of coastal forests and seawall infrastructure are being used to counter longer-term sea-level rise. Indonesia, the Philippines and Singapore are among countries exploring planting mangroves on man-made rock structures by the coast.

These efforts are an extension of earlier efforts to use either natural “green” or built “grey” defences against rising seas. The former is not always feasible where strong coastal erosion eats away at coastal forests, while the latter is increasingly regarded as maladaptive given the risks of destroying biodiversity and coastal livelihoods.

The balance between conserving nature and shoring up coastal defences remains in debate. This is most salient in arguments around land reclamation-cum-adaptation projects in countries like the Maldives and Singapore, which does not have much room to retreat from rising seas.

But there is recognition that where large populations are at risk, human lives take precedence. Science network Ocean & Climate Platform recommended last year that “protection-based measures” – generally seawall-type constructs – should be avoided whenever possible but can be used “for sites that are already heavily urbanised presenting major urban challenges, or as a transitional response”.

Climate change is also stretching the capacity of cities’ public utilities. Dry spells are increasingly causing water shortages in Malaysia’s coastal Penang state, which does not have a reliable supply of groundwater and predominantly draws water from one river. In early 2020, drinking water was trucked to parts of Bangkok in Thailand as tap water turned saline from a lengthy drought and seawater intrusion. These issues are forcing authorities to upgrade waterworks and reservoirs.

Meanwhile, disruptive storms are obliging grid regulators to install more redundancy into electrical systems in case power lines and substations are damaged by storms. They also call for better early warning weather systems – radars, supercomputers and public broadcast channels – so that authorities and residents have more time to protect their property.

Scaling up financing

Urban Asia is no rookie to climate science and risks, but adaptive capacity varies drastically. The International Monetary Fund believes Asia Pacific has a US$800 billion shortfall yearly in climate finance, of which around US$170 billion falls in the adaptation category.

Adaptation financing has traditionally garnered low private-sector interest: infrastructure such as seawalls and waterworks do not present clear revenue-earning opportunities compared to mitigation activities, such as power sales from renewables projects. Part of the problem is that the benefits, or avoided costs, from adaptation projects have not been internalised into mainstream economic calculus. Developing country governments, meanwhile, find the public purse stretched by competing needs such as social development, healthcare and defence.

There have been some innovations to break the impasse. China, for instance, is beginning to look into leveraging “land value capture”, noted Sinha from GCF.

“When [governments] build public infrastructure, the value of land around it increases, and you can capture part of that value and put it into a fund that focuses on building resilience. That is a known innovation that can grow quite significantly,” Sinha said of the concept.

As it stands, research in China has demonstrated a link between government efforts to improve air quality and higher property value. This helps to peg a monetary value to anti-pollution efforts that provides otherwise intangible benefits, and can form the basis of new taxes to grow public-sector efforts that further aids private businesses. Applied to climate adaptation, more resilient infrastructure could mean that property prices are protected as extreme weather risks are reduced. It could thus justify taxation to fund more state-led resilience projects.

Multilateral financiers are also championing “blended finance” models, where they commit part of the funds needed for climate projects. This helps to pacify private-sector concerns on shelling out huge sums for big infrastructure works without the support of reliable partners while facing the prospect of losing all their money should the project fail. GCF has co-funded pilot projects in Bangladesh to improve sanitation and transport in urban slums, as well as freshwater supply works in the Pacific island-nation Kiribati.

“The understanding, especially in private capital, of what is a good business model for adaptation is just an emerging concept. But I think through our blended finance models, we can do a lot more in adaptation. We are increasingly seeing demand for investments through us in food security, water security and climate resilient infrastructure,” Sinha said.

But blended finance deals still form a miniscule portion of the market today. Governments need to provide clear policy direction to reduce regulatory uncertainty, Sinha said. She added that financing must also be made more local – such as through national green banks or subnational green bond issuances – to provide targeted funding and help emerging economies avoid foreign exchange risks.

Elsewhere, private-sector adaptation initiatives include the advent of “parametric” climate insurance, where payouts are made automatically when extreme weather crosses certain thresholds, such as in rain level or temperature. Some rice and coffee farms in Vietnam have signed on to such products, for instance.

Internationally, there have been efforts to get wealthier countries to provide “loss and damage” funding to vulnerable nations, to recover faster from climate disasters and adaptation breaches. It remains to be seen if sufficient amounts can be made available. Provision of low-interest or repayment-free climate financing faces similar hurdles.

Empowering policymakers

While climate adaptation is not solely a government ambit, its ramifications on social equity and human development means that policymakers need to take the lead. The challenge lies in translating such concepts into strategy that addresses local needs.

“Policies should be driven by the understanding of intersectionalities and differential vulnerabilities, to craft appropriate interventions,” said associate professor Sharina Abdul Halim, an environmental sociologist at the National University of Malaysia. Adaptation plans need to fit both floods and heatwaves, while food, water and energy risks tend to be interlinked, she noted.

Such discussions need to flow down to provincial and city governments, which also need to take a bigger role in measuring and reporting the impacts of climate change, to help channel finance and resources to where it is needed most, Sharina said.

There are also calls for leadership reform – for instance through the creation of “chief resilience officers”, an idea advocated by the global governance group Resilient Cities Network.

Across Asia, such positions have been created at subnational levels in about a dozen countries including India, Indonesia, Malaysia, Myanmar and Singapore. These executives are to engage stakeholders, implement climate programmes and help mobilise financing. The initiative is not necessarily about hiring new people, but creating a mandate for intra-agency coordination, said Saurabh Gaidhani, head of Asia Pacific at the Resilient Cities Network.

“We basically created an additional mandate for someone who is already at a senior position, and then put a team with that person, who will be a budget owner and is able to prioritise certain resilience projects,” Gaidhani said, adding that a new role would often come with administrative issues on budgeting and level of influence.

Still, there are often knowledge gaps in climate governance. Gaidhani pointed to a lack of technical expertise on heatwaves and its health impacts, which could be particularly detrimental to outdoor urban workers. Studies on such topics have traditionally been conducted in medicine and sports science, with broader work on climate change and labour productivity only starting in recent years, such as through research centres in Singapore.

A Singapore study earlier this year recommended policymakers to adopt a “climate-resilient development” approach to tackling urban heat, with focus areas in climate co-benefits, societal welfare and large-scale deployability. “Siloed solutions to tropical overheating are ineffective,” wrote lead author Professor Winston Chow, pointing to efforts to reduce power use without switching away from fossil fuels, or private green spaces serving select communities.

Improvements are also needed in responses to climate disasters. In late 2021, amid record nationwide flooding that killed over 50 people, Malaysia’s National Disaster Management Agency (NADMA) was accused of poor coordination, while its chief drew flak for saying the agency does not directly deal with natural disasters at the state level. After the floods, the Malaysian government said it would improve flood warning sirens, monitor waterways and simplify aid delivery channels.

Fostering ground-up efforts

No climate solution works without buy-in from beneficiaries. In urban Asia, community engagement on adaptation efforts is made more critical by the wide socioeconomic gap present in many countries, which if ignored can result in ineffective measures and unintentional harm.

Where government and business-led efforts are stretched, community leaders have stepped up to fill the gap through local networks and Indigenous knowledge. For instance, coastal communities in the Philippines that have protected mangrove forests in their land have been less impacted by tsunamis, according to Gerry Arances, executive director of local nonprofit Center for Energy, Ecology and Development (CEED). Such communities are well-positioned to support local governments in expanding coastal protection efforts, Arances said.

Similarly, in Malaysia, civil society organisations such as Klima Action Malaysia are working to fill gaps in a holistic narrative of climate change encompassing gender and sustainable development issues, noted Sharina from the National University of Malaysia.

However, community efforts by themselves are often limited by capacity, and informal urban dwellers in particular could be a blind spot in climate adaptation partnerships. The Philippines has had a “People’s Survival Fund” since 2012 to finance local adaptation projects, such as in early warning systems, mangrove rehabilitation and flood control infrastructure.

“There are projects in urban areas, but it is much fewer compared with rural ones. Community accessibility [in urban areas] is a real challenge,” Arances said, pointing to informal settlements, the likes of which make up around 10 per cent of the population of Metro Manila.

Power dynamics is also a contentious issue in fostering community-based action, especially where information, money and the ability to make decisions are controlled by external stakeholders – be it businesses or governments. A recent study emphasised the use of “reflexive questionnaires” by policymakers to properly assess the strengths and vulnerabilities of local communities, while creating ways to improve their capacity and ownership of resources.

“One of the best approaches is to really have a more consultative process on [climate adaptation] policies. In most cases, coastal communities are disenfranchised. The Philippines has good policies, but how much coastal communities can actually take part in them is lacking,” Arances said.

Closing window of opportunity

Asia is no stranger to climate change, but many obstacles prevent it from effectively addressing the risks in the years ahead.

Many other factors beyond what has been covered in this report colour the outlook and climate strategies for the region. On finance, interviewees say Asia needs to raise its own money instead of relying on other countries, as climate risks ramp up globally. Governance also needs to be strengthened. Nations will need to contend with how ageing populations can cope with risks and contribute to adaptation efforts. Lastly, there remain conflicts to resolve involving gas financing and deforestation that keep locals wary of authorities and businesses. More trust needs to be built at the community level.

“Almost all the key cities in Asia, the economic magnets, are coastal cities…Are they better prepared for what is in store at 2°C of climate change? I don’t think so, they are not prepared even today,” said Gaidhani from the Resilient Cities Network.

The mounting challenges as the world races towards 1.5°C, then 2°C and beyond of global warming requires Asia to prioritise climate adaptation today. In recent years, new climate initiatives and successful case studies have surfaced globally to guide regional efforts. Whether Asia's economic dreams survive the climate realities in the decades ahead will likely depend on whether the continent can internalise its learnings and create viable paths forward for itself.

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Eco-Business wishes to credit the following people who contributed to the development of this report:

Kavita Sinha (Green Climate Fund), Associate Professor Sharina Abdul Halim (National University of Malaysia/ UKM), Saurabh Gaidhani (Resilient Cities Network), Gerry Arances (Center for Energy, Ecology and Development).

This report was developed and written by Liang Lei, with the support of Ng Wai Mun.

Special thanks to the Konrad Adenauer Stiftung - Regional Project Energy Security and Climate Change Asia-Pacific (RECAP).

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