- 40% of the world lives within 100 km of a coast.1
- 110 million people live below high tide level; by 2100, that number will be 190 million.
Sea-level rise (SLR) is the climate risk that perhaps most captures the imagination. Pop culture has long depicted doomsday scenarios of ocean inundation and, increasingly, real-life disasters like 2012’s Hurricane Sandy and chronic flooding in coastal cities from Bangkok to Miami have turned fiction into reality.
Coastal regions face risks of sea-level change
Thankfully, climate models show most catastrophic impacts of SLR to be far off, relevant for the end of this century and beyond. However, given the extreme risks that even minor changes in SLR pose, we expect spending on adaptation to increase in coming years, creating challenges for coastal cities and leading to a range of investment opportunities.
The relationship between SLR and coastal flooding is log-linear, meaning a small increase in the former greatly amplifies the probability of the latter. Woodwell research indicates that a 0.16 m (6.3in) increase in global mean sea level can cause a 50-year flood (occurring once every 50 years, with a 2% chance of occurring in a given year) to reach the magnitude of a much more damaging 100-year flood (occurring once every 100 years, with a 1% chance of occurring).2 In other words, rare coastal flooding events will become more common as sea levels rise.
Our research agenda with Woodwell Climate Research Center has expanded to include SLR, and together we have generated a new process for assessing risks that is more accurate than established methods. We include SLR in our Climate Exposure Risk Analysis (CERA) mapping tool, which enables our investors to integrate projected impacts of nine climate variables into securities research. Figure 1 shows that during an extreme flood event, most of Miami beach would be under nearly one meter of water.
For illustrative purposes only. | Sources: Wellington Management and Woodwell Climate Research Center
SLR will likely continue regardless of our efforts to curtail greenhouse gas (GHG) emissions and cap global temperature increase. Climate change contributes to SLR through thermal expansion (warm ocean water is less dense than cold water) and added volume from glacial ice sheet melting. These processes unfold over millennia and are unlikely to revert quickly in response to lower atmospheric GHG concentrations.
Regional factors such as water salinity and temperature, population density, and subsidence all affect the degree of SLR risk. Natural land subsidence in coastal deltas is typically offset by the buildup of sediment from river flow. In coastal regions with extensive land development, however, dams and other hard infrastructure counteract those natural protections. The sheer weight of coastal megacities, as well as the effects of groundwater loss and fossil fuel extraction, can greatly exacerbate subsidence.
Adaptation spending is needed to combat risks of rising sea levels
Although SLR creates challenges for coastal governments, including governance difficulties coordinating stakeholders and financial headaches from building and maintaining protective infrastructure, for most large coastal cities, the benefits of building resilience to SLR vastly outweigh the costs. We expect spending on SLR adaptation to create substantial tailwinds for a number of industries:
- Infrastructure, engineering, and environmental consulting
- Hard infrastructure, including seawalls, surge barriers, dikes, trenches, and canals
- Dredging, excavation, land reclamation, marine services
- Stormwater solutions; drainage and pumping infrastructure
- Flood proofing for buildings
- Ecosystem-based solutions like beach nourishment, mangroves, and reefs
- Agricultural adaptation to decreased soil salinity
- Relocation services
1Stats from Scott A. Kulp and Benjamin H. Strauss, “New elevation data triple estimates of global vulnerability to sea-level rise and coastal flooding,” Nature communications, 29 October 2019. | 2According to the Sixth Assessment Report of the Intergovernmental Panel on Climate Change, global mean sea level is expected to rise by 0.1 – 0.4 meters by 2050 compared to 1995 levels under most climate scenarios.