Why is it important to link the impact of COVID-19 to climate risks?

By Violaine Lepousez, manager -

Resilience and Climate Risk Adaptation DepartmentThe COVID-19 crisis is causing major disruptions to our supply chains, resulting in significant economic and societal impacts on our economies. 94% of the largest U.S. companies are reported to be experiencing supply chain disruptions (Fortune, February 21, 2020). From the automotive industry to the pharmaceutical sector, the impacts are affecting both supply and demand. A recent report examined the factors exacerbating these impacts: a market sensitive to purchasing power, expertise concentrated in restricted areas, manufacturing plants or raw materials concentrated in specific regions, etc. (Kyu, March 17, 2020). The supply chain appears to have underestimated the epidemic risk (Classe-export, March 23, 2020); in other words, this risk was not assessed or incorporated into their business continuity plan.

Kansai International Airport was flooded after Typhoon Jebi in 2018

These systemic shocks to our economies can also be climate-related.

It is therefore necessary to assess climate scenarios and prepare for them. Explanations. The vulnerability of these same supply chains to climate change has already been demonstrated: the floods in Thailand in 2011, the floods in Japan in 2018, the drought along the Rhine in Germany in 2019... These events have highlighted the fact that a climate-related hazard in one place can lead to economic losses worldwide. [caption id="attachment_13048" align="aligncenter" width="900"]

Rhine Drought, 2019[/caption] However, global warming will increase the likelihood of more intense and frequent climate-related hazards (heat waves, droughts, floods, storms, etc.) around the world. It is therefore quite possible that distinct climate-related events could occur simultaneously in different countries. The duration of these climate events could also be extended: droughts can paralyze shipping lanes or electricity production for months. The spatial and temporal combination of climate hazards can create a systemic risk to our economies. The risk analysis related to the impacts of climate change must therefore take into account the multi-hazard nature of climate change: in other words, it is necessary to develop scenarios for systemic climate shocks. [caption id="attachment_13044" align="aligncenter" width="900"]