Climate change: China’s cost for urban flooding could jump six-fold to US$477 billion a year, says Morgan Stanley
- Urban flood damage could cost China US$77 billion in 2030 and more than six times that in 2080 due to climate change, Morgan Stanley analysts say
- Investors have not priced in these risks sufficiently, with only a fraction of companies reporting climate risks and opportunities
Urban flood damage could cost China US$77 billion in 2030 and jump more than six-fold to US$477 billion in 2080 due to climate change, but investors have yet to price in these costs, according to Morgan Stanley.
The proportion of the population affected could more than double to 1.1 per cent from 0.5 per cent over the same period, the American investment bank’s analysts said in a report released on Thursday.
The world’s most populous nation and second biggest economy also faces a rising risk of disruption to supply chains and economic activity due to heatwaves and water stress, given a predicted temperature rise of one degree Celsius during the 2030s.
Even though climate risks are rising, investors have not been factoring them into asset markets sufficiently, because of both a lack of appreciation and a lack of analysis of the potential costs to the economy, they said.
Only 27 per cent of the 717 constituent companies in the MSCI China index have reported climate risks and opportunities.
