Technical Report Chapter 7: International Dimensions

Third UK Climate Change Risk Assessment Technical Report 1

UK Climate Risk Independent Assessment (CCRA3)

Technical Report Chapter 7: International Dimensions

Lead Authors: Andy Challinor, Tim G. Benton

Third UK Climate Change Risk Assessment Technical Report 2

Contributing Authors: Thirze Hermans, Helen Adams, Louise Beveridge, Leslie-Anne Duvic-Paoli, Aled Jones, Andy Morse, Declan Conway, Alistair Hunt, Duncan Depledge, Tim Hess, Carlton Evans

Additional Contributors: George Hutchinson, Miriam Kennedy, Andrew Norton, Andrew Russell

This chapter should be cited as:

Challinor, A. and Benton, T. G. (2021) International dimensions. In: The Third UK Climate Change Risk Assessment Technical Report [Betts, R.A., Haward, A.B. and Pearson, K.V. (eds.)]. Prepared for the Climate Change Committee, London

Third UK Climate Change Risk Assessment Technical Report

Chapter 7 – International Dimensions 1

Contents

Key messages .......................................................................................................................................... 3

7.1 Introduction ...................................................................................................................................... 6

7.1.1 Scope of chapter ........................................................................................................................ 6

7.1.2 Point of departure ...................................................................................................................... 7

7.1.3 Transmission pathways and framework for international dimensions of risk ........................ 10

7.1.4 Socio-economic change ........................................................................................................... 14

7.2 Risks to UK food availability, safety, and quality from climate change impacts overseas (ID1) ..... 15

7.2.1 Current and future level of risk (ID1) ....................................................................................... 18

7.2.2 Extent to which current adaptation will manage the risk (ID1) ............................................... 24

7.2.3 Benefits of further adaptation action in the next five years (ID1) ........................................... 26

7.2.4 Looking ahead (ID1) ................................................................................................................. 27

7.3 Opportunities for UK food availability and exports from climate change impacts overseas (ID2) 28

7.3.1 Current and future level of opportunity (ID2) ......................................................................... 28

7.3.2 Extent to which current adaptation will manage the opportunity (ID2) ................................. 32


7.3.4 Looking ahead (ID2) ................................................................................................................. 33

7.4 Risks and opportunities to the UK from climate-related international human mobility (ID3) ....... 34

7.4.1 Current and future level of risk and opportunity (ID3) ............................................................ 36

7.4.2 Extent to which current adaptation will manage the risk and opportunity (ID3) ................... 40


7.4.4 Looking ahead (ID3) ................................................................................................................. 43

7.5 Risks to the UK from violent conflict overseas resulting from climate change (ID4) ..................... 43




7.5.4 Looking ahead (ID4) ................................................................................................................. 51

7.6 Risks to international law and governance from climate change that will impact the UK (ID5) .... 51




7.6.4 Looking ahead (ID5) ................................................................................................................. 59

7.7 Opportunities from climate change (including Arctic sea ice melt) for international trade routes

(ID6)....................................................................................................................................................... 59

7.7.1 Current and future level opportunity (ID6) ............................................................................. 59



7.7.4 Looking ahead (ID6) ................................................................................................................. 64

7.8 Risks associated with international trade routes (ID7) ................................................................... 64




7.8.4 Looking ahead (ID7) ................................................................................................................. 71



7.9 Risks to the UK finance sector from climate change impact overseas (ID8) .................................. 72




7.9.4 Looking ahead (ID8) ................................................................................................................. 78

7.10 Risks to UK public health from climate change impacts overseas (ID9) ....................................... 78

7.10.1 Current and future level of risk (ID9) ..................................................................................... 79

7.10.2 Extent to which current adaptation will manage the risk (ID9) ............................................. 85

7.10.3 Benefits of further adaptation action in the next five years (ID9) ......................................... 86

7.10.4 Looking ahead (ID9) ............................................................................................................... 87

7.11 Systemic risks arising from the amplification of named risks cascading across sectors and

borders (ID10) ....................................................................................................................................... 87

7.11.1 Current and future level of risk (ID10) ................................................................................... 89

7.11.2 Extent to which current adaptation will manage the risk (ID10) ........................................... 93

7.11.3 Benefits of further adaptation action in the next five years (ID10) ....................................... 94

7.11.4 Looking ahead (ID10) ............................................................................................................. 95

7.12 References .................................................................................................................................... 96



Key messages

The CCRA2 Evidence Report was the first UK national risk assessment to include a chapter on the

international dimensions of climate change. The evidence presented here builds on CCRA2,

particularly with regard to the growing body of evidence on how direct and indirect risks can interact

and amplify. This report therefore includes risks resulting directly from a changing climate (e.g., on

food production, human mobility from extreme weather) as well as risks resulting from indirect

effects, which are associated with conditions that weaken resilience and with risk amplification. The

key messages from this analysis are:

Evidence since CCRA2 shows that the urgency of action for some of the risks associated

with the international dimensions of climate change is greater than previously assessed.

These risks include food security, violent conflict, international law and governance, and

public health. Two factors underpin this step change in assessed urgency: greater evidence

of climate change acting as an amplifier of existing risk; and greater evidence of geopolitical

and socio-economic background conditions that are more favourable to risk transmission

and amplification. The increased urgency identified here is the result of both increased risk

(e.g., UK food availability, safety, and quality) and increased evidence of risk amplification.

The world is more vulnerable to the transmission and amplification of risk than it was.

Accordingly, this CCRA Technical Report introduces a new risk: that of risk amplification

from the interactions and cascades of named risks across systems and geographies. Risk

amplification means that a risk can propagate and spill over from one sector to another,

eventually cascading into a system-wide risk. Thus, even where climate is not the main

driver of a global risk, its role in interacting with other factors makes it a clear contributor

(see Box 7.1). The risks presented by the international dimensions of climate change are

therefore systemic and are greater than the sum of the component risks identified in this

chapter. Ongoing increases in hazards, exposure and vulnerability across multiple interacting

risks means that there is a multiplicity of low likelihood risks and transmission pathways

through which impacts can arise. The systemic nature of international risk cascades, coupled

with underlying adaptation gaps resulting from lack of systemic resilience, identifies risk

amplification as an area requiring additional action.

Changes in geopolitics have opened up new and clear cases of the need for adaptation to

respond to risks to international law and governance, and to international violent conflict.

In the case of risks to the UK from international violent conflict, direct and indirect effects

combine to elevate risk. Similarly, law and governance are now identified as a risk with more

action needed, rather than further investigation as was the case for CCRA2. The need for

action arises from an identified gap between current action and the action needed to adapt

to climate change. Renewed engagement with multilateral processes and institutions would

act to close this adaptation gap, since it would attenuate risk cascades by increasing

cooperation and thus resilience. Whilst the short-term benefit of such adaptations is small, it

rises on longer timescales, commensurate with the increase in risk magnitude. Planning is

needed now in order to enable adaptation in the future.



International and national policy coordination is a central theme to the areas where more

action is needed. Action is required to address risks to international trade routes, to UK

food availability and safety, to public health, to law and governance, and from violent

conflict. The evidence suggests the risk from violent conflict can be managed through

increased international coordination and active promotion of long-term political stability.

This new evidence is consistent with previous evidence of the value of international

coordination, for example with respect to natural disasters and food supply chains, and with

law and governance, as noted directly above. The value of coordination and sharing

information is also clear with regard to the international dimensions of risk to the UK finance

sector. This risk emerged from the CCRA3 methodology as ‘sustain current action’ – largely

because of the increase in the use of responsible investment and environmental, social,

governance metrics.

Health risks to the UK require further action in both monitoring and raising awareness.

Whilst any single disease presents a low likelihood and high impact risk, the full set of

transmission pathways across all health risks result in a medium level of risk. Adaptation

actions include improved awareness of risks in both primary and secondary health care and

better monitoring and surveillance of potential vectors both present overseas and in the UK.

A second area of health impact presents a more direct transmission pathway: there is now

some evidence of mental health issues emerging from global impacts, one of which is loss,

or fear of loss, of iconic and meaningful assets or habitability of places. This limited evidence

suggests that the risks to mental health associated with awareness and understanding of

global impacts would be a useful topic for deeper exploration in CCRA4.

The evidence for action based on potential opportunities associated with international risk

cascades has changed since CCRA2, with the result that there are now no identifiable

urgent actions. This is in part due to greater awareness of commercial opportunities, which

in turn means that Government action is not required; and in part due to the known and

significant uncertainties associated with these opportunities, which suggests that action is

not warranted. In short, if commercial opportunities do exist, then commerce will avail itself

of them. There are, however, opportunities associated with other drivers of international

food systems, not least the ongoing trend towards plant-based meat substitutes and plant-

based diets, which have the potential to both mitigate climate change and result in healthier

diets.

The risks associated with human displacements have changed from more action needed in

CCRA2 to watching brief in CCRA3. This is due to changes in policy rather than underlying

risk. The risks were identified in CCRA2 as requiring a more proactive strategy, to build long-

term resilience in exposed regions and avoid the need to divert funds to provide

humanitarian (i.e., emergency) aid. The case for action is equally clear now and is

strengthened by both: i. research that has produced a better understanding of the role of

policy in ensuring that climate migration produces positive development outcomes; and ii.

The potential opportunities for the UK to make faster and more direct policy interventions,

arising from EU exit and the creation of the Foreign Commonwealth & Development Office.

Whilst the underlying evidence suggests that all other things being equal, there is still action



required on human displacement, the diversion of funds away from humanitarian aid is an

active part of current policy and thus could not be deemed to be a risk.

Table 7.1 summarises the urgency scores for all risks and opportunities to the UK arising from the

impacts of climate change elsewhere in the world, including the areas for further investigation,

sustaining current action, and watching brief that are not covered above. International risks and

opportunities are assessed for the UK as a whole, not separately for each UK nation.

Table 7.1 Urgency scores for risks and opportunities to the UK from climate change impact overseas

Risk

number

Risk/Opportunity description Urgency Score

ID1 Risks to UK food availability, safety, and quality from climate

change impacts overseas

More action needed

(Medium confidence)

ID2

Opportunities for UK food availability and exports from climate


Watching brief

(Medium confidence)

ID3 Risks and opportunities to the UK from climate-related

international human mobility

Watching brief

(medium confidence)

ID4 Risks to the UK from international violent conflict resulting from

climate change impacts overseas

More action needed

(Medium Confidence)

ID5 Risks to international law and governance from climate change

that will impact the UK

More action needed

(Medium confidence)

ID6 Opportunities from climate change (including Arctic sea ice melt)

for international trade routes

Watching brief

(Medium confidence)

ID7 Risks associated with international trade routes More action needed

(low confidence)

ID8 Risk to the UK finance sector from climate change impact overseas Sustain current action

(Low confidence)

ID9 Risk to UK public health from climate change impact overseas More action needed

(Medium confidence)

ID10 Systemic risk arising from the amplification of named risks

cascading across sectors and borders

More action needed

(Medium confidence)



7.1 Introduction

7.1.1 Scope of chapter

This chapter updates the second CCRA analysis of risks and opportunities for the UK from the

observed and projected impacts of global climate change (Challinor et al., 2016). The chapter covers

a broad range of initial climate drivers and impacts including food production, violent conflict,

human mobility, health and governance. Risks not only result directly from climate impact drivers

(i.e., climate hazards), but also indirectly, with climate change amplifying an existing risk through

perturbation of the system (see Figure 1, Challinor et al., 2018). Indirect mechanisms can result from

a wide range of hazards. Risks can interact geographically e.g., across borders, and through

teleconnection e.g., financial, IT, wellbeing. The international dimensions of UK climate risks need to

consider interactions across geographies, sectors, and transmission pathways. The growing

recognition of the significance of interconnected and systemic risk, as exemplified by COVID-19, has

prompted the addition to CCRA3 of Risk ID10 ‘Systemic risk arising from the amplification of named

risks cascading across sectors and borders’, which takes a systems approach to understanding global

risks to the UK that may have a systemic scale.

This chapter covers the risks that climate change impacts overseas present for the UK and UK

interests. Many of these impacts are transmitted through the flow of goods, finance, people and

information. Whilst ultimate control of such flows is typically reserved to the UK government (e.g.,

trade agreements, tariffs, and border controls), the risks described below have impacts across the

UK. England and the Devolved Administrations (and regions within each area) may have separate

governance arrangements that govern how the international risks play out in different places. For

example, although the UK National Adaptation Programme (mainly covering England) is required to

also cover reserved (UK-wide) policies such as defence; Scotland’s 2nd Climate Change Adaptation

Programme (SCCAP2) pays attention to ensuring resilience in food (Sub-Outcome 7.1), economy

(7.3) and the risks arising from climate change induced changes in international governance (7.2).

Thus, whilst the UK Government may have reserved responsibility for the UK’s envelope of

international risk, each devolved administration has an interest in how that risk may be transmitted

within their areas.

In particular, the 2020 EU-UK Trade and Cooperation Agreement and the Internal Markets Act

means that there are new challenges at the UK-EU border including from the EU to Northern Ireland.

There are also new challenges to the way trade in food and goods flows around the UK differs

regionally, particularly between Great Britain and Northern Ireland. This means a future shock to

overseas supply chains may impact differently to the UK and across the UK from past shocks.

Many examples exist of the growing interconnectedness between countries in the production and

trade of food and fibre and other socio-economic activities and their implications for generating

systemic scale impacts, such as the financial crisis during and after 2008. Climate hazards play an

important role in contributing directly or indirectly to this type of risk. For example, during the

period 1961-2013, over half of all shocks to crop production systems were a result of extreme

weather events (Cottrell et al., 2019). The impacts of such climate events extend far beyond the food



system. Hedlund et al. (2018) derive a transboundary climate risk index of countries’ exposure to

transnational climate impacts (TCI). The TCI index incorporates connections between different

countries based on transnational flows and interconnections reflecting four transmission pathways

(biophysical, financial, people and trade, Figure 7.1) and a measure of globalisation. In this ranking,

the UK lies equal 98th out of 172 countries ordered from highest (1) to lowest (172) exposure to TCI.

The impacts of climate risks will differ between socio-economic groups since specific groups of

people tend to be more vulnerable and at risk: for example, economically marginalised people are

more vulnerable to price rises from disrupted trade. The level of vulnerability will depend on the

dimensions of inequality which include social class, income, ethnicity, age, race, disability, and

gender (Oppenheimer et al., 2014). Therefore, the impacts of climate change risks on society are

affected by the multidimensional vulnerability of different groups (ibid).

7.1.2 Point of departure

Risk is a function of hazard, vulnerability, and exposure. The hazards arising from climate change are,

in principle, predictable for a given scenario of emissions, but often with high levels of uncertainty

(particularly with regard to extreme weather and its impact on wildfires or pest and disease

outbreaks). However, vulnerability and exposure are mainly functions of the social, environmental

political and economic contexts that govern how institutions operate and the flow of goods, finance,

information or people around the world. How vulnerability and exposure change in the future is

radically uncertain (Kay and King, 2020), and thus inherently unpredictable: how will trade be

governed in 2080, will the world be cooperative and stable, or fragmented and unstable, will

economic growth reduce or enhance inequality? Scenarios, however, could be developed to describe

plausible future trends for these two components of risk but comprehensive ones are not currently

available. The impacts of changing frequency and intensity of climate-related hazards, and how they

interact with societal contexts to create transboundary and systemic risks, are therefore essentially

unpredictable in terms of specific events and their consequences. Risks can be increased or

decreased by the geopolitical and economic context in which a hazard event occurs, and so this

context is as important to consider as the hazard itself. Instead, the radical uncertainty of the future

suggests the need to plan better for classes of risk (such as interruptions to food supply chains)

rather than attempt to predict specific risks and their transmission pathways, into the future (Kay

and King, 2020).

There have been multiple case studies of food system shocks transmitted to the UK through direct

supplier shortages of specific food types and indirectly through international market trade. These

case studies have illustrated where an international risk can be greatly amplified by societal

responses, both in the UK (e.g., ‘panic buying’) and internationally (e.g., food export bans fuelling

price rises on international markets). Panic buying, for example, has occurred in response to both

food and non-food related shocks, for example, salad and vegetable shortages following drought and

storms in Europe during 2017-2018, and stock buying of supermarket essentials, paracetamol, and

toilet paper, during the global pandemic of COVID-19 in 2019-2020 (as further discussed Box 7.1 and

Risks ID1 and ID10).



Changes in fundamental governance structures, notably the UK’s withdrawal from the EU, since the

publication of CCRA2 introduce greater uncertainty about how the UK will be impacted by

international climate risks. New trade relationships potentially increase the exposure of the UK to

imports from countries that face more climate variability and that have poorer environmental

governance (Benton et al., 2019b), increasing the potential for supply-chain fragility when hazards

occur (and with knock-on consequences for environmental and social governance).

This raises a more fundamental question: what does a lack of resilience to systematic risks mean for

the full set of climate change risks that cascade across sectors and borders? Modern society relies

heavily on the robust functioning of systems that are intricately networked, in an explicit and/or an

implicit manner. While increasing the interconnectivity between infrastructure systems can result in

higher efficiency of service, it also makes the constituent systems more vulnerable to cascading

interruptions to flows (of goods or services) that create a system-wide or systemic risk (Centeno et

al., 2015; Renn et al., 2019; OECD, 2020c). Such cascades of failures have been studied generally in

model networks and specifically in the context of engineered systems such as the power grid, the

internet and transportation and infrastructure systems, in the context of financial institutions, and

within ecological systems. However, in addition to the risk of cascading failures being present within

a particular domain (e.g., the network of financial institutions), there are also risks arising because of

the coupling between systems in diverse domains. Indeed, the primary thesis behind many societal

collapses in the history of mankind is that of a cascade of diverse risks (Szymanski et al., 2015).

The world is changing increasingly fast from many different outlooks: social, economic, technical,

environmental (Steffen et al., 2015). We have a globally growing population, with more mobile,

more connected, more wealthy people but with greater inequality between the rich and poor,

collectively demanding more resources (e.g., food, water, energy, goods). There is robust and high-

confidence evidence that the impact of the human resource systems on the planet is now significant

(IPCC, 2019). The planet is under pressure from demand growth and its ability to withstand the

environmental footprint of demand (e.g., emissions of greenhouse gases and other pollutants, soil

degradation, biodiversity loss, waste, including plastic) is finite. We are now, arguably, close to the

‘planetary boundaries’ (Rockström et al., 2009) beyond which Earth-system processes may degrade.

At the start of the 21st century, the future looked very different from how it looked in 2019, and

events in 2020/21 are changing the way the interconnected world works. In the “noughties”,

international rules-based cooperation had led to unprecedented stability and global integration,

such that there was discussion of the potential of a post-nation state world (Sassen, 2002; Ehrkamp

and Leitner, 2006). Radicalism, terrorism, the threat of terror and a growing inward-looking

nationalism in some parts of the world, partly driven by a crisis of liberal democracy and the

economic downturn of 2008-2009, has now arguably led us to a very different world from that at the

turn of the century (Bieber, 2018). Prior to COVID-19 we had significantly diverged from the

direction of travel since World War 2 and the rise of the Bretton Woods’ international architecture

of cooperation, which underpinned globalisation: with the undermining of the UN and WTO, trade

wars, increasing competition between states rather than cooperation, and the UK’s withdrawal from

the EU (Welfens, 2020; Weiss, 2018). On top of this change, COVID-19 has created more rapid

change to the global economy than any other events since World War 2 (International Monetary

Fund, 2020), and post-COVID economic reconstruction has the potential to create more changes,



both positive and negative, alongside the UK withdrawal from the EU. Given the speed of change,

the breadth and depth of change, the future is very uncertain; but what is likely is that shocks

(arising directly or indirectly from climate change) will be a recurrent feature. Hence, a key part of

future planning must be to ensure resilience of our systems.

Our view is that the future is increasingly TUNA: turbulent, uncertain, novel and ambiguous (Benton,

2019a). This makes it difficult to define a strategic direction of travel, as the range of plausible

futures for planning is very large (for example, will globalisation or de-globalisation be the trend of

the next decade?) (James, 2018; Darvas, 2020; Balsa-Barreiro et al., 2020). Furthermore, the

potential for disruption is high given the complexity of our global systems today, and the uncertainty

of how they will develop over the next decade; however, the ability to predict specific events and

plan around them, is comparatively very small.

Box 7.1 New and emerging diseases; COVID-19 – an example of cascading and systemic risks

There is good theoretical evidence (reviewed in Brooks et al., 2019b, Brooks and Boeger 2019a) that the emergence of new diseases can often be made more likely by environmental change (which includes climate change as well as land use change and degradation), which together disrupt ecological communities and give pathogens new opportunities to interact with new species (Altizer et al., 2013). For example, Bebber et al. (2013) showed that climate-related pole-wards spread of pests and pathogens averaged ~3km per year providing new opportunities for host, reservoirs and pathogens to interact and diseases to erupt or emerge in new places. As with an extreme weather event, however, it is very difficult to conduct an attribution study to determine the role of climate change in any particular new disease emerging. Nonetheless, it has been observed in recent decades that emerging diseases, mainly zoonotic ones from animals, are an increasing trend (Jones et al., 2008; Allen et al., 2017; Brooks and Boeger, 2019a) and this is an area of targeted research at present. The driving factors behind the emergence of COVID-19 are still being actively investigated, and it remains unclear the relative contribution of climate change, wider environmental change and increasing human-wildlife interactions. Notwithstanding the attribution of environmental factors to its emergence, the way COVID-19 has propagated and created unforeseen impacts makes it a highly relevant case study for the sorts of risks being discussed in this chapter. Since emergence in 2019, in Wuhan, China the impacts on the UK have been considerable. First, the disease arrived in the UK in many independent events as travellers arrived from multiple destinations (an estimated 1356 between Feb/Mar 2020 (Pybus et al., 2020) as the disease rapidly spread round the world (Skums et al., 2020). Second, lockdowns around the world created disruption to transport networks of goods (Zhu et al., 2020), as planes were grounded and borders became restricted (for example, lack of aeroplanes to Kenya, impeded the import to the UK of fresh produce: even by July 2020, Kenyan exports of fresh produce remained at 25-30% of full capacity (FEWSNet, 2020)), as well as labour shortages in some industries. Most noticeable in the early stages of the pandemic were shortages of PPE – partly through changing global demand, partly because many were sourced from China (where the first major lockdown occurred). Third, lockdowns produced major changes in demand, and this demand shock led to significant impacts on the UK’s supply chains (noticeably through the closure of the hospitality sector, leading to significant wastage of food – including meat, milk – that was destined for sale). Fourth, restrictions on movement, closure of hospitality and a significant increase in working from home have led to significant changes in the UK and global economies, which may take decades to recover fully from. Finally,



the pandemic has led to the potential for large scale structural change in the UK economy: changing working practices, attitudes, and need to ‘build back better’ where ‘better’ includes greater resilience (OECD, 2020b). All in all, COVID-19 is an example of a risk cascade which spills across sectors from a health issue overseas to create society-wide or systemic risks that far exceed the impact on the health system (OECD, 2020c): the overall economic impacts to the UK (as of Sept 2020) are ~100x greater than the actual cost of healthcare (Lilly et al., 2020). The emergence of a new disease has cascaded around the world – through people movements and supply-chain, disruptions - leading to an ongoing shock of enormous magnitude.

7.1.3 Transmission pathways and framework for international dimensions of risk

The rapidly growing interest and research on interconnected systems and systemic risk use a range

of terms with similar meanings, sometimes interchangeably. Table 7.2 lists the key terms and their

meaning adopted for this chapter. Conventional risks are those that are recognizable within an

experienced set of circumstances (e.g., a salmonella outbreak) and are managed with standard risk-

based regulation. Emerging risks are new or known but identified in a new context (e.g., a novel

disease like COVID-19). Emerging risks carry more uncertainty in terms of their drivers and

management and therefore require monitoring, attribution of triggers, and adaptive responses.

Systemic risks occur when an impact of a threat or failure moves through a complex and

interconnected system and impacts widely. For example, the impacts of a pandemic are not just on

health, but also on the flow of goods, the movement of people, and the wider economy. Systemic

risks display non-linear behaviour, limited attribution to any one driver, and tipping points that are

likely to be unknown or highly unpredictable. Systemic risks therefore require a focus on adaptation,

resilience-building, and transformation of organizations and systems (IRGC, 2018).

Besides the direct impact of a hazard, such as a flood on an affected locality, societal responses to a

hazard and the threat of the hazard’s impacts, can also have significant consequences for the way

the risk cascades through transmission pathways impacting on sectors and different geographies

(Pidgeon et al., 2003). These wider, ripple, cascading or indirect impacts can be independent of the

magnitude of the direct impact of the hazard. This response or pre-emptive response – such as

erecting barriers to trade to protect local markets – can act to attenuate or amplify risk and act to

drive the transmission of risk across geographies or through teleconnection (Challinor et al.,

2018; Kasperson et al., 2003). The transfer of information and data is likely to be an increasingly

prominent pathway of transmission in a more globally connected society, especially through greater

connectivity by social media, real-time news reporting, and the internet of things.

Many of the identified levers of social amplification of risk (heuristics and values, social group

relations, signal value, stigma and trust) are driven through sharing of information and data

(Kasperson et al., 2003). It therefore follows that it is possible for a climate hazard to stay the same,

but the risk to society to increase due to changes in the way risks are transmitted or propagated

through the system. As a result, some of the changes in assessment of risks from CCRA2 to CCRA3

arise not because we have fresh knowledge of climate hazards overseas, but due to structural



changes in (a) geopolitics and the multilateral architecture of international competition, (b) the UK

leaving the EU and (c) structural changes in economies caused by COVID-19 and its aftermath.

The impact of structural changes in geopolitics and economics can either reduce or increase the

adaptation gap (see Chapter 2: Watkiss and Betts, 2021). In the case of risks from international

violent conflict resulting from climate change impact overseas (section 7.6), there is increasing

evidence of both risk cascades and direct climate impacts, thus suggesting a widening adaptation

gap. In the case of opportunities for UK food availability and exports from climate impacts overseas

(section 7.4), the adaptation gap has narrowed. The call in CCRA2 for active monitoring, to capitalise

on emergent comparative advantage, has given way to greater awareness of commercial

opportunities, with a greater likelihood that the market will therefore take advantage of any

opportunities directly. This awareness, coupled with the significant uncertainties associated with

these opportunities, has led to this opportunity now being designated as watching brief rather than

an area for further investigation.

Table 7.2 Terminology used in this chapter. Terms used in this chapter in bold and alternative

forms used in the literature, see for example IPCC (Oppenheimer et al., 2014; all ‘quotes’ are from

pages 1048-49); IRGC, 2018; Benzie et al., 2016; Nyström et al., 2019; UNISDR, 2009. These

descriptions are consistent with the CCRA3 glossary but are nuanced in order to deal with the

systemic nature of the risks covered in this chapter.

Term (+ alternatives) Description

Systemic risk (similar

terms include hyper-

risks, Anthropocene

Risk)

Risk which propagates through a complex and interconnected system,

creating a risk cascade that has system-wide consequences. For

example, where a climate hazard interrupts supply chains, leading to

economy-wide impacts.

Transmission pathway

(Risk Chain)

Linear transmission of risk, from primary to secondary to tertiary

impacts

Risk Cascade (similar

terms includes

spillover, and

cascading)

The non-linear transmission of risk across multiple impacts. Sufficiently

large cascades can create systemic impacts (see systemic risk).

Geographical Risk Risk transmitted across a border or geographical boundary.



Teleconnection Risk /

Connected risk

Risk transmitted through non-geographical links, for example, via trade

flows.

Conventional risk Risk recognizable and stable in a set of circumstances and managed

with standard risk-based regulation.

Emerging risk ‘A [novel] risk that arises from the interaction of phenomena in a

complex system’.

Risk amplification /

attenuation

The increase / decrease of the risk and its impact due to broader

conditions, e.g., political, social and economic drivers. This amplification

/ attenuation of risk is different from just the sum of risks.

Social amplification /

attenuation

Risk amplified / attenuated by a societal response (including

policy/political response).

Direct (first order)

effects

Direct impact caused by climate hazard (e.g., storm damage).

Indirect effects

(second, third order

etc.)

Indirect (or 2nd order) impacts occur as a result of a transmission

pathway across space (e.g., damage interrupts supply chain leading to

“teleconnection” between geographies) and/or aspects of society and

environment (e.g., damage affects livelihoods leading to subsequent

abandonment of land and change in local economy).

Multidimensional

Vulnerability

Systemic vulnerability arising from concatenation of circumstances (e.g.,

food price shock arising from climate hazard on top of fuel price rises,

low stocks and low transparency in supply chains). This includes

intersecting dimensions of inequality, including gender, wealth, social

class, ethnicity, age, race and disability.

Systemic risk

(amplification /

attenuation)

Systemic risks occur when the outcomes of a hazard propagate widely

across space or sectors to create system-wide impacts on economies or

societies. The risk can be amplified or attenuated by interactions across

disparate parts of the system.

In the CCRA2 Evidence Report (Challinor et al., 2016), Chapter 7, the interactions between global

climate and the UK are categorised as:

interactions between markets and economic interests.

the flow of goods, services, and people between the UK and the rest of the world, and

the placement of the UK within the EU and international political system, including its

responsibilities and cultural ties to other parts of the world.

Complementary literature has established the importance of identifying the pathways that enable

risk transmission and different authors propose alternative combinations but with many elements in

common. For example, Moser and Hart (2015) identified the following pathways: “(1) trade and

economic exchange, (2) insurance and reinsurance, (3) energy systems, (4) food systems; (5) human



health, (6) population migration, (7) communication, and (8) strategic alliances and military

interactions”. Benzies et al. (2016) identify four climate risk pathways through which climate impacts

can transfer, namely people, trade, finance, and biophysical ways, and consider infrastructure to be

a transmission pathway.

Drawing insights from the second UK CCRA, Challinor et al. (2018) identify significant challenges to

the incorporation of climate and resource-generated systemic risk through multiple risk transmission

mechanisms into national climate assessments. They (ibid) stress that climate risk assessments (and

therefore also national adaptation programmes) that only consider a single region or jurisdiction will

fail to capture the complex mechanisms and interdependencies that transmit and amplify risk. While

examples of approaches that consider these issues are emerging, they remain stand-alone and ad

hoc with respect to climate drivers, sectors, locations and time periods such that beyond CCRA2 at

present there are no systematic assessments of these types of climate-induced risks and the

adaptation response in relation to the UK.

Here, we present and use a framework that includes the most common transmission pathways

through which risks occurring outside the UK may cascade into the UK drawing from various sources

(Challinor et al., 2016; IRGC, 2018; Benzie et al., 2016; Moser and Hart, 2015; Challinor et al., 2018,

King et al., 2015). The framework (Figure 7.1) identifies seven common transmission pathways:

energy, finance and markets, governance, IT and information, movement of goods, movement of

people, and wellbeing. These transmission pathways allocate resources and transmit risk to and

from the UK (see e.g., the review of Challinor et al., 2018). The far left of the figure shows that

feedbacks from the UK response to risk can transmit and amplify risks internationally. This

recognises that there is potential for amplification when multiple risks are transmitted through the

same pathway (convergence) – such as food prices being affected by simultaneous shocks from

different events - and when risks transmit through multiple pathways into the UK at the same time

(co-occurrence). The framework provides a consistent basis for reviewing the key risks identified by

CCRA, following the established approach (See Chapter 2: Watkiss and Betts, 2021). The framework

includes more transmission pathways than CCRA2, but the analytical approach is very similar

because in most examples there is insufficient evidence to consider all transmission pathways

systematically.

For any given climate hazard, there is a very large number of factors that can lead to risk

amplification (and cascades across sectors and borders) or risk attenuation, depending on the

extensive range of political, social, and economic drivers. For example, the same event occurring

during COVID-19 lockdown, and in a normal year, may have radically different consequences for

market dynamics. Furthermore, with risks transmitting across space, the perception of a near-term

future impact can cause the social amplification of risk that can be as important as the impact itself,

depending on whether there is already sentiment that a system is under pressure. Thus, a given

climate hazard has very contingent outcomes on risks, which makes standard climatic risk

assessment methods impossible to implement. While there is a range of methods that can be

applied (see e.g., Challinor et al., 2018), it is not possible to assess how risks vary quantitatively

according to each emission scenario.



Figure 7.1 Pathways of transmission of international climate risks and impacts to the UK.

This chapter refrains from listing key climate indices or identifying specific climate impact drivers,

since cascading international climate risks are mediated through indirect effects, which contrast to

the direct effects driving the climate impacts assessed in previous chapters. A given risk outcome in

the UK, for example, a price spike and reduced supermarket food availability, could occur in

response to a vast range of climate drivers across a global setting: a drought impacting on

agriculture, novel pests and diseases responding to climate events, extreme weather impacting on

transport logistics (heat buckling key rail routes, hurricanes affecting ports; drought affecting

Mississippi river transport; storm surge affecting channel ports in the UK; wildfires disrupting

transport or logistics); emerging diseases affecting humans and labour in the food system; climate

migration causing slower flows at borders, disrupting just-in-time supply chains etc. The complexity

of causal pathways and the linkage between changing hazards due to climate change and global

supply chains means there is very little direct mapping between a climate driver and a risk outcome.

7.1.4 Socio-economic change Social and economic trends are highly relevant to the future risks of climate change, and strongly

influence future magnitude through changes in exposure and vulnerability (Chapter 2: Watkiss and

Betts, 2021). Climate and socio-economic factors can act together as risk multipliers, although for

some cases, socio-economic change can reduce vulnerability and thus dampen impacts.

For CCRA3, the CCC commissioned a new consistent set of UK socioeconomic projection data from

Cambridge Econometrics (CE) (2019) as one of the research projects. Whilst this research only

considered UK projections (e.g., for population, economic growth), it is clear that these sorts of

changes in the UK will influence international risks, as will parallel changes outside the UK.



In the context of this chapter, and the international risk cascades set out above in Figure 7.1, there

will be a major influence from future global socio-economic drivers, many of which are unknowable

over the course of the century (for example, the future of international cooperation, international

governance, the future of capitalism, democracy, and inequality). This adds another dimension of

complexity to the consideration of international risks, through the amplification or attenuation

(dampening) of international risk and transmission pathways. There are global socio-economic

projections available in the IPCC Shared Socio-economic Pathways (SSPs) (O'Neill et al., 2014),

outlined in Chapter 2 (Watkiss and Betts, 2021), which span the dimensions of challenges to

mitigation and adaptation, though they are insufficiently comprehensive to guide an analysis of risk

transmission across economies globally embedded. The SSPs provide “high-level” alternative futures

which encompass some of the trends highlighted above. It is notable that when the SSPs were

selected, there had been a long period of stability and it was difficult to foresee the future in terms

other than a SSP2 – ‘Middle of the Road’ scenario. As the discussion above has highlighted, much has

changed since then and considerations of alternative futures (e.g., of greater Regional Rivalry) no

longer look so unlikely. While some data exist for the SSPs (e.g., quantitative data on population and

economic growth, at the country level) it is extremely difficult to use these to try and assess the

implications for the international risks set out in this chapter, at least in a synthesis such as the

CCRA3 Technical Report. For this reason, these socio-economic scenarios are not included here,

though we highlight that various futures could increase the likelihood of particular risks. Further

work is being done through the current UKRI Strategic Priorities Fund Climate Resilience programme

to expand the socioeconomic data for the UK into a set of scenarios that can be used for CCRA4.

Finally, since CCRA2, the UK, Scottish and Welsh Governments have adopted net zero emissions

targets into law. This has important implications for the UK domestically, including for future

socioeconomic trends, but it is stressed that the net zero target does not apply to emissions

generated outside the UK which will largely dictate UK climate change impacts.

7.2 Risks to UK food availability, safety, and quality from climate change impacts overseas (ID1)

Climate change exacerbates disruptive events impacting on agricultural production and food supply

chains (droughts, agricultural pests and diseases, storms), with increased risks of disruptions

associated with multiple production areas (e.g., simultaneous impacts in the USA and Europe);

climate change will increase the likelihood of risk cascades amplifying the impacts (Challinor et al.,

2016; IPCC, 2019; Kornhuber et al., 2020; Gaupp, 2020; Gaupp et al., 2020; Mann et al., 2017).

Increasing risks implies a requirement to develop food systems that are resilient to disruption, rather

than focussing on supply chain efficiency, which increases fragility (Benton, 2020b; Liu et al., 2020).

Climate change affects the yields of crops, livestock, aquaculture and wild-caught fisheries (IPCC,

2019, Gephart and Pace, 2015; Lam et al., 2016; Froehlich et al., 2018; Free et al., 2019). There are

multiple lines of evidence indicating overall global yield decreases in response to rising temperatures

and increasing water scarcity (Long et al., 2006, Schleussner et al., 2018). These include evidence

attributing observed yield decreases to climate change (Porter et al., 2014, Ray et al., 2019 and

Wake, 2019). Thus, there is robust evidence with high confidence (e.g., IPCC, 2014; Porter et al.,



2014) that globally yields will continue to decrease with increasing global mean temperature. Porter

et al., (2014) reviewed the literature for instances of yield increases and decreases from modelling

projections, showing clearly a shift from an approximate 50/50 split between the two categories in

the near term moving to less than 25% of simulations showing yield increases by the end of the

century. This result, and numerous specific studies, suggest that agro-climatic thresholds at the local

and regional level contribute to gradual yield decreases over time or with an increasing magnitude of

climate change.

The biggest risks to food security in the UK, however, are not the long-term changes in the average

yields, but the variability in access to food (and its ingredients) associated with supply-side

disruptions arising from variability in the weather, and the potential for cascading and interacting

risks. This was explored in depth in the CCRA2 Evidence Report Chapter 7 and IPCC SRCCL (IPCC,

2019): for example, the food price spikes in 2007/8 and 2010/11 arose from climate-related

disruptions to production, interacting with a range of other factors inter alia lack of transparency in

holdings, biofuel policy incentivising the use of grain for fuel, and poor policy decisions that created

price amplification and lack of economic accessibility around the world (CCRA2 Evidence Report;

Bailey et al., 2015).

A very wide range of climate hazards can cause impacts through the markets, especially extreme

weather events in key production areas (termed breadbasket regions) (Betts et al., 2018; Kent et al.,

2017; Mann et al., 2017). An increasing risk of teleconnection between areas can also lead to

multiple areas suffering impacts simultaneously (e.g., through jet stream effects) (Betts et al., 2018;

Kent et al., 2017; Mann et al., 2017). In addition, impacts can arise from climate-related outbreaks

of pests and diseases that may affect global production and market prices (e.g., locust swarms

affecting the Horn of Africa in 2020 (Salih et al., 2020)1), or outbreaks of human diseases that may

emerge from climate change’s disruptive impact on ecology (see Box 1 and ID9) or are exacerbated

by climate change in their impact (for example, COVID-19's impacts are weather-influenced, e.g.,

Tosepu et al., 2020). Finally, climate change can impact the supply of labour through increased

exposure of the agricultural or supply-chain workforce to, for example, heat stress (Simpson et al.,

2021). Furthermore, as explored in detail in ID7 (below), weather can cause trade interruptions via

its impacts on ports. All these overseas impacts on production and transport can affect food prices

and markets in the UK due to market connections. As extreme weather (see Chapter 1: Slingo, 2021

and IPCC, 2019) is increasingly prevalent (high confidence, robust evidence), the potential for

increased disruptions in supply chains is likely.

The situation for marine production is broadly similar to that of food crops. The body size (meat

yield) of several globally important fish species is likely to decline with projected changes in the

ocean with future projected climate change, for example a mean decrease in landed catch (26 %

yield decrease per recruit) recorded for 6 of the 8-commercial fish in the North Sea, attributed to a

1–2-degree temperature increase over a 40-year period (Bauldron et al., 2014). Reduced oxygen

1 The 2020 locust swarms, despite affecting areas without significant exports, none the less are likely to have impacts on global grain prices (see https://agfax.com/2020/06/19/grain-markets-africa-asian-locusts-will-have-major-impact-on-global-production-dtn/).

https://agfax.com/2020/06/19/grain-markets-africa-asian-locusts-will-have-major-impact-on-global-production-dtn/

https://agfax.com/2020/06/19/grain-markets-africa-asian-locusts-will-have-major-impact-on-global-production-dtn/



content, associated with warming oceans, is also expected to further decrease fish body size with

climate change (Deutsch et al., 2015).

In a modelled global impact assessment with projections of global warming reaching 3.2°C to 5.4°C

at the end of the century2, fin-fish production in aquaculture is projected to decline by 10-20% in

Indo-Pacific, Mexico and Canada by 2050-2070, and less substantial declines in Norway and China by

the end of the century. Potential for increase in production is projected for the Caribbean and

Mediterranean. Bivalve production is projected to have a more severe decrease, in the range of 50-

100% in China, Thailand and Canada (Froehlich et al., 2018). Toxic algal blooms (linked to global

asthma prevalence in Walsh et al., 2017), anoxia and disease outbreaks are further threats to marine

production and human health, that are likely to shift production area and trade flows, but despite

being linked spatio-temporally to climate (e.g., Leung et al., 2013) these drivers remain challenging

to project under future climate change (Froehlich et al., 2018).

It is only in recent years that impacts on food safety and quality have been assessed (see IPCC, 2019

for a recent overview). Climate change can, for example, affect the occurrence of mycotoxin-

producing fungi, or of micro-organisms in aquatic food chains that cause disease (e.g.,

dinoflagellates, bacteria like Vibrio, associated with warm-water upwellings) (Martinez-Urtaza,

2010). It is also suggested that climate change could increase the risk of flood-related contamination

of pastures with enteric microbes (like Salmonella) that can enter the human food chain (Jiang et al.,

2015). Degradation and spoilage of products in storage and transport can also be affected by

changing humidity and temperature outside of cold-chains, notably from microbial decay but also

potential changes in the population dynamics of stored product pests (e.g., mites, beetles, moths)

(Moses et al., 2015). The projected impact of increased aflatoxin contamination under future climate

scenarios has been evidenced and estimated empirically in global climate modelling studies

(Battilani et al., 2016) assessing the impact on human ingestion, which in turn has been associated

with human health outcomes including cancers, immunotoxicity, renal diseases, and gastroenteritis

(Wu et al., 2014).

Climate change may affect the quality of food in other ways: changing heat stress in poultry, as well

as affecting yields, can affect meat quality by both altering fat deposition and meat chemical

constituents (Lara and Rostagno, 2013). In addition, CO2 fertilisation, which might improve crop

yields (see section 7.4) can be detrimental for micro- and macro-nutrient quality: Zhu et al. (2018)

report a meta-analysis of FACE trials on a range of rice cultivars. Protein declines by an average of

10% under elevated CO2, iron and zinc decline by 8% and 5% respectively. Furthermore, a range of

vitamins show large declines across all rice cultivars, including B1 (-17%), B2 (-17%), B5 (-13%), and

B9 (-30%), whereas Vitamin E increased.

Projections of changes in nutritional content of food production associated with increasing levels of

CO2 suggest significant negative impacts. Smith and Myers (2018b) assess global impacts on health

from the projected decrease in nutritional content of food in response to 550ppm CO2. These were

estimated as: an additional 175 million cases of zinc deficiency, and 122 million protein deficient. For

2 An ensemble of CMIP5 models with the RCP8.5 concentrations pathway. In the ensemble used in IPCC AR5 the 5th to 95th percentile range of warming reaches 3.2°C to 5.4°C in 2081-2100 (see Chapter 1: Slingo, 2021)



iron, additional cases could not be calculated, but high-risk regions were identified: where over 20%

of the population are currently anaemic, and the average iron consumption is estimated to decrease

by 4% or more. Smith and Myers did not attempt to quantify the health burden of worsening

deficiencies and health outcomes, which remains un-estimated, but is expected to be large, here

only the additionality of case numbers is reported. High risk areas were identified as ‘South and East

Asia, North Africa, the Middle East, eastern and southern Africa, and Southeast Asia’.

7.2.1 Current and future level of risk (ID1) 7.2.1.1 Current Risk (ID1) The CCRA2 Evidence Report Chapter 7 found that the absolute availability of food is not likely to be

an issue for the UK as a whole as a consequence of climate change up to 2100 (Challinor et al.,

2016). However, as the international food system becomes more exposed to climate-related

hazards, food price spikes may become increasingly likely. This, in turn, changes the accessibility to

food, particularly for the economically marginalised. Evidence since CCRA2 shows that the frequency

of extreme weather events (including the conditions that lead to wildfires) is increasing, with some

suggestion that these increases exceed what climate models predicted (Sarhadi et al., 2017;

Balaguru et al., 2018; Li et al., 2018). Previously low-probability events have become more common,

most noticeably in 2019 extreme heat events and tropical storms (National Academies of Sciences,

Engineering, and Medicine, 2016). There is also evidence that specific patterns of jet streams pose a

significant threat to food production through multiple simultaneous harvest failures globally

(Kornhuber et al., 2020). Climate change, through increasing extreme events, therefore, advances its

potential for direct and indirect effects on food supply chains.

The literature on market interactions from 2015-2019 has also been consistent with the message of

the second CCRA Evidence Report, illustrating how global trade has the potential to exacerbate risk,

under certain circumstances, and that market mechanisms alone are not fully able to counter the

volatility of prices and production (and distribution) due to the climate’s impact on food production

(Challinor et al., 2016). If shocks are sufficiently large, market amplification can occur that requires

public policy solutions.

The principal risk interactions and amplification evidenced are feedbacks between climate-induced

food shortages (including reductions in quality and safety), and market behaviour, which includes

levels of stockholdings (Marchand et al., 2016; Heslin et al., 2020), and associated transparency.

These risks to the UK may result from multiple transmission pathways such as finance & markets,

and the movement of goods. Reactionary protective policy (such as export bans) can also be a key

factor in amplifying effects, especially where the UK depends heavily on particular regions abroad

for a specific import or export product (Dithmer and Abdulai, 2017; Brown et al., 2017). These risk

interactions apply across crops, livestock, aquaculture, and wild-caught fisheries (Gephart and Pace,

2015; Lam et al., 2016; Froehlich et al., 2018; Free et al., 2019). Volatility in food supplies and prices

also increases risks arising from food fraud, as there is then greater incentive to substitute expensive

and less available ingredients for cheaper ones (Challinor et al., 2016).



The amplification of impacts from concurrent climate-induced agricultural shocks via global trade

was assessed in a single scenario modelling activity by Lunt et al. (2016) and Lloyds (2015): the

scenario investigated the cascading financial impact due to the co-occurrence of staple food

production failures (a decrease of 10% maize, 11% soy, 7% wheat and 7% rice, which currently

individually each have roughly a 1-in-200 return probability). This scenario led to simulated food

price rises of 500%, and public agricultural commodity stocks increase in share value by 100%. Food

price rises led to food riots in the Middle East, North Africa, and Latin America, and the cumulative

loss of 5-10% on European and US stock markets (Lunt et al., 2016, Lloyds, 2015). This amplification

of the impact of climate extremes through systemic risk in complex food systems can be a bigger

contribution to loss than direct loss caused by the event (Acemoglu et al., 2012) (see also discussion

in ID10 below).

Current risks to food safety were also reviewed in CCRA2, where it was concluded that, despite clear

climate-induced food safety issues overseas, there was little evidence of unsafe food entering the

UK. There is, however, evidence of risk to food quality in the UK resulting from climate change

impact overseas. For example, Hurricane Florence in the USA in 2018 significantly affected the

production of sweet potato (The Grocer, 2018). A diversification of import regions to include Egypt

and Central America resulting in a decline in the quality of sweet potato available in the UK has been

reported as a result (Fresh Plaza, 2018).

7.2.1.2 Future Risk (ID1)

The introductory section above highlights the ways that food supply and agricultural production

have been, could be, and are projected to be impacted by climate change. Furthermore, as outlined

in the introductory section, future risks depend on hazards, vulnerability, and exposure. The former

is uncertain (but climate hazards are in principle predictable), the latter two are radically uncertain

(Kay and King, 2020), depending on geopolitical, economic, institutional, and social factors (e.g.,

international cooperation and governance, inequality, border controls). Given the last decade’s

drivers away from the international architecture of multilateral cooperation and increasing

geopolitical uncertainty, at the moment, all components of the risk equation (hazards, exposure, and

vulnerability) seem to be increasing the overall risk of disruptions. This may be countered by an

increased focus on resilience-building, but the current assessment is that future risks are more likely

to increase.

Box 7.2 Case Study: Fresh produce shortages in 2017

At the time of the second CCRA (2014-2017), there was no evidence of climate shocks producing

food shortages in the UK. However, an area of concern is the extent to which the UK relies on fruit

and vegetable imports, over 80% of fruit and about 50% of vegetables consumed are imported. At

certain points of the year this flow is particularly key. The vegetable shortages of early 2017,



which came as the UK government published its response3 to the evidence report for CCRA 2017

(citing a ‘more optimistic view ... of markets’), were the result of climatic shocks to the food

system.

Poor growing conditions in key sourcing regions, such as Murcia in southern Spain, resulted in

rationing and price increases of up to 25-300% across the UK. Shortages were mostly encountered

in lettuce, but also courgette, aubergines, tomatoes, peppers, broccoli, cauliflower, onions,

carrots and celery. Multiple drivers of shortages were identified, including flooding in South East

Spain, and cold temperatures in Italy (BBC News, 2017a, b; Guardian, 2018). In Spain, the highest

rainfall in 30 years reduced the area of arable land to only 30% of the area planted (BBC News,

2017a). Italy shifted from exporting over European winter to importing (BBC News, 2017a).

Traders imported from the US to fill the shortfall, thus increasing cost, emissions and

contaminants associated with the produce. (BBC News, 2017a).

During the vegetable shortages of 2017, some catering and restaurants were bulk buying from

supermarkets instead of wholesale at this time, in response to the shortages and price spikes.

Some supermarkets appeared to opt for empty shelves rather than paying the higher price.

Shortages appeared to be supermarket dependent, with, for example, the Co-op not reporting

shortages (BBC News, 2017a). This suggests that vulnerability may be the result of a high

proportion of imports coming from one region (BBC News, 2017a). It also suggests that supply

chain management might reduce the future impact of events of this kind. Indeed, some

companies have since diversified their growers’ networks. For example, Florette have mitigated

future risk due to production shortage in Southern Spain by moving the grower network of some

supply to Northern Spain, Southern France and Northern Africa (inews, 2018). Nonetheless,

events of this sort continue to occur, and interact with UK growing conditions to produce

shortages, as in the case of cauliflower in August 2019 (Guardian, 2019; BBC News, 2019).

As highlighted in CCRA2 Chapter 7 (Challinor et al., 2016), the socioeconomic and demographic

inequalities across the UK result in different exposures and vulnerabilities to the risk of food price

spikes. More broadly, environmental hazards exist everywhere and can be related to income,

education, employment, age, sex, race/ethnicity and specific locations or settings. In addition to

these differences in exposure, inequalities are also caused by social or demographic differences in

vulnerability towards certain risks. For example, supermarket shoppers in cities may be exposed

to variations in food prices or supply, and they will be differentially vulnerable to price rises,

according to their income. Shoppers in rural locations, with access to smaller and more highly

dispersed retail outlets, will be exposed to different risks as availability of food will vary more, as

well as its price.

EU-Exit is also a complicating factor affecting these risks for at least two reasons. First, it will change

existing patterns of trade, one major risk transmission pathway; any disruption to just-in-time supply

3 https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/584281/uk-climate-change-risk-assess-2017.pdf

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/584281/uk-climate-change-risk-assess-2017.pdf




chains causes impact because there is no internal capacity to buffer disruption: especially for fruit

and vegetables at some times of the year, the speed which they enter the country is the speed at

which they are sold. EU-Exit risks disrupting trade through new border arrangements, as well as

through moving from existing trading partners to new ones. During this process, which may take

years during which the UK develops new trading relationships, the UK is likely to be more vulnerable

to supply chain disruptions. Food price spikes caused by climate events elsewhere, such as the

2007/8 and 2010/11 Australian and Russian heatwaves, if they happened now would potentially be

amplified by new border processes or friction caused by new trading relationships or unfamiliar

regulatory standards from new partners.

The second key EU-Exit factor is that prior to leaving the EU, much of the UK’s food trade was with

European countries with similarly high standards of environmental governance. Relying increasingly

on new and emerging markets has the potential to expose the UK to increased climatic risks as many

potential new partners are exposed to higher climate-related risks, or lower ability to govern them

(e.g., citrus may come from Morocco rather than the EU) and also to poorer governance of natural

resources (water, emissions, biodiversity). The countries which have been traditional major trading

partners for the UK typically have significantly higher environmental and social governance than

countries we may seek to increase future food trade (Benton et al., 2019). Both increased border

friction and new trading partners may decrease the long-term resilience of supply chains.

Food trade is a reserved issue to the UK Government, but local and regional food security depends

on intra-UK food supplies (a significant part of which is imported). The relationship between the

internal and external markets depends on new legal frameworks embodied within the 2020 Internal

Markets Act. Local governance of food issues, particularly food safety, is also devolved, as is

agricultural policy. This means there is potential for an external food trade ‘shock’ to resolve

differently across the DAs – with different implications for food prices and availability in the different

regions of the UK.

In particular, there are currently increased challenges for trade between Great Britain and Northern

Ireland, although NI is more aligned with Ireland and the EU (Birnie and Brownlow, 2021). In recent

times, significant trade from Ireland to the rest of the EU has crossed through GB, with implications

for the transmission of risks from the UK to the island of Ireland with interruption affecting major

supply routes into the UK (especially the Channel and East Coast ports). In the future, there may be

the growth of more direct sea crossings from Eire to the EU. Hence, there is potential for NI to be

supplied via trade that comes both from (or via) GB and directly from the Continent. Depending on

how any risk may eventuate this may increase the resilience of NI’s supplies.

7.2.1.3 Lock-in and thresholds (ID1)

The food system is an example of a complex system, which tends towards internal stability and

resistance to change which creates inherent lock-ins that limit flexibility and adaptability (Oliver et

al., 2018). This has been indicated by COVID-19, where just-in-time supply chain fragility was

highlighted, and closure of the hospitality sector led to increased waste as supply chains could not

adapt to supplying the retail sector. Lack of consideration of potential environmental governance



and exposure to climate risks in post-EU-Exit development of free trade agreements could also

undermine the ability to have a resilient food system as climate risks mount.

Clearly, there is potential for thresholds in global climate dynamics, caused by passing climate

tipping points (e.g., permanent changes in the jetstream or overturning circulation) that could have

major implications for the global food supply (Benton, 2020a). The potential for these – and the

timescale over which they may impact – is currently unresolved.

7.2.1.4 Cross-cutting risks and Inter-dependencies (ID1)

The nature of risks cascading across space, sectors and geographies is one of inter-dependence.

Food supply relies on land, water, labour, finance, inputs (to agriculture and food production and

packaging), transport logistics, multiple families of policy and so on. As detailed in CCRA2 (2017), the

climate hazard – whether on production or supply chains – can spark market and political responses

that may further be exacerbated by other factors (such as other policies: biofuel policy in 2007/8; or

other conditions – low transparency of stockholdings).

Despite progress since CCRA2, it remains very difficult to make quantified risk statements that draw

links between international climate events (specific climate indices and their future projected

ranges) with risk outcomes in the UK. The distal nature of the risk, both in terms of complexity,

number of risk interactions, risk amplification and geographical proximity implies serious limits to

predictability (see e.g., Morris et al., 2017) (see ID10 below). Nonetheless, observed links between

climate shocks abroad and food price spikes in the UK are well documented (e.g., Challinor et al.,

2016; Challinor et al., 2018).

7.2.1.5 Implications for Net Zero (ID1)

Net-zero commitments globally clearly have the potential for interacting with food supply issues in

two ways. First, countries may incentivise land-based carbon dioxide removal that may act to

increase land competition for agricultural production (IPCC, 2019). This may tighten supply relative

to demand and therefore increase systemic pressure (Challinor et al., 2016; Challinor et al., 2018).

Particularly if weather impacts further tighten supplies in a given harvest year, this tightening of

supply can act to amplify price signals towards a price spike. Second, countries – including the UK –

may act to incentivise dietary change to reduce land- and carbon-footprints from food, for example

by encouraging a shift towards plant-based diets that may also be healthier. Such moves on the

“demand side” may disincentivise producers (e.g., of animal-sourced foods), and impact the

availability of the affected foods, and therefore their price.

7.2.1.6 Inequalities (ID1)

The impacts of food price spikes, safety, and quality issues are differentiated across society, with

those on lower household incomes less buffered than higher earners. COVID-19 has highlighted the

extent to which significant proportions of the UK population are ‘just about managing’ in normal

circumstances. The Food Standards Agency in 2019 (Fuller et al., 2019) estimated that, in the course

of a year, about 10m UK adults had, at some time, experienced an inability to feed themselves.



However, this part of the population struggles to meet basic food needs in extremis. A report from

The Food Foundation found that in the first two months of lockdown in Spring 2020, adult food

insecurity increased four times. This arose from (a) reduced income and squeezed budgets, (b) lack

of stocks in supermarkets to meet increased demand (particularly in the first weeks of lockdown), (c)

lack of ability to access shops (due to disability, child-care, or quarantine) (Loopstra, 2020).

Decreasing food nutritional content from increasing CO2, or impacts particularly on more fragile,

more just-in-time fresh produce supply chains may both decrease the nutritional density of fruit and

vegetables and reduce its availability, stability, and accessibility: making it more difficult and more

expensive to eat healthily. This has the potential to interact with existing trends of increasing

obesity, and hidden hunger, (both of which are related to inequality in incomes) in the UK and

internationally. Populations at the highest risk are concurrent with those at risk of obesity and

malnutrition (Drewnowski, 2012; Jones et al., 2014b). Therefore, addressing food access inequality,

access to fresh produce, and informed dietary choices, will likely have the co-benefit of reducing

vulnerability to the risk of decreasing nutritional quality of food produced due to climate change

(IPCC, 2019).

7.2.1.7 Magnitude Scores (ID1)

Table 7.3 Magnitude scores for the risk to UK food availability, safety, and quality from climate change

impact overseas

Country Present Day 2050s 2080s

On a pathway to stabilising global

warming at 2°C by 2100

On a pathway to 4°C global warming at

end of century



On a pathway to 4°C global

warming at end of century

UK High

(Medium

confidence)

Medium to High

(Medium

confidence)

High

(Medium

confidence)

Medium to High

(Medium

confidence)

High

(Medium

confidence)

Given the evidence of today's risks (significant disruptions to yields and supply chains caused by

climate hazards, and climate-related ecological hazards, such as emerging pests and diseases in the

past decade), the evidence suggests the magnitude of the impact is high, though the probability of

the risk occurring may be lower. This is based on the potential for a significant proportion of the

UK’s population to be affected by a food price spike, as per 2007/8 and 2010/11, as well as the

impacts of COVID-19 on food insecurity in the UK. Looking ahead, the known increase in the

underlying climate hazard and changes in the international geopolitical environment, indicate clearly

that this risk (i.e., ID1) is likely to increase with time, though with the recovery from COVID-19, were

it to focus on resilience-building, it is conceivable the risk could decrease over time, under lower

climate change scenarios. Today’s risk is assessed with medium confidence, based on the evidence

in the literature. Future risks are assigned through expert judgement.



Whilst the observed evidence for food safety and quality impacts in the UK is less strong, the causal

mechanisms and pathways are clear, and examples of these risks have been observed outside the UK

(see e.g., CCRA2 Chap7). Increases in these risks are therefore also extremely likely.

7.2.2 Extent to which current adaptation will manage the risk (ID1)

7.2.2.1 Effects of current adaptation policy and commitments on current and future risks (ID1)

The observed evidence presented in section 7.2.1 shows that food shocks arise from the interaction

between climatic hazards and a range of other drivers/events (for example via social amplification

arising from the perception that a climate hazard will lead to food shortfalls). Whilst there are many

ways that our current food systems can respond to events, adaptation to date has largely occurred

autonomously - as a consequence of market actors reacting to events (EU-Exit planning, the 2007/8

food price spike, COVID-19, etc.) – rather than strategically, from consideration of the need for a

resilient system. The Government’s Second Climate Change Risk Assessment (HM Government

2017), in response to the CCRA2 Evidence Report, indicated that food security planning included (a)

disaster response planning, (b) investment in sustainable intensification to maximise local supply,

and (c) an expectation that the market would manage the rest. The Government disagreed with the

Evidence Report’s assessment that targeted government intervention was required to manage food

price spikes, particularly to protect vulnerable people.

In the 2018 Cabinet Office Resilience Sector Plans (Cabinet Office, 2018), the Government set out

how it and the sector will work together to ensure the resilience of the UK food supply. This builds

on research into the resilience of food supply and building resilience in supply chains to extreme

weather events. Food supply is also included as one of the 13 Critical National Infrastructure sectors.

The second National Adaptation Programme (NAP2) stated that Defra would produce an annual

Sector Resilience plan and carry out a review of the UK Food Security Assessment, which was due to

be published in 2019 but has not yet appeared. Climate change is expected to be considered and

highlighted as a risk (and possible opportunity) in this review (Watkiss et al., 2019).

More broadly, there are efforts to adapt food systems to climate change, though their focus has

primarily been on ensuring agricultural adaptation to climate change. These will have varying

degrees of success across different locations and agricultural systems (Dinesh et al., 2017). The

international dimensions of such systems include those areas where global coordination is required.

For example, addressing the risk of emerging pests and diseases with future climate change requires

a globally consistent monitoring and management strategy, given the important role of transport

and the global supply chain in the transmission and emergence of new pests and diseases (Bengyella

et al., 2017). From a system perspective, vulnerability to emerging pests and diseases with climate

change is heightened when countries are highly reliant on imports from single countries, implying

strategic market and production diversification policies could have co-benefits for importing

countries vulnerable to market price spikes and supply shortages in their exporting countries (Lee et

al., 2018).



7.2.2.2 Shortfall in current adaptation (ID1)

The food system is fragile and focus on “efficiency of supply chains” removes redundancy,

centralises supply networks, removes diversity and reduces flexibility, all of which can act to reduce

system resilience (see below, and Benton, 2020b).

The emergence of COVID-19 may have been influenced by disruption, from climate change, of

ecological systems (Box 7.1). It is also an exemplar of climate-related hazards that include changing

patterns of weather, sea-level rise, and ecological disruption due to climate that changes the

incidence of pests and diseases (Bebber et al., 2013). The COVID-19 pandemic caused a demand-

side food shock in the UK and elsewhere, that has in some cases impacted on supply (for example,

centralised food processing facilities having to close – e.g., meat packing plants – or transport

interruptions creating a lack of input availability for planting in sub-Saharan Africa) (OECD, 2020a).

Our view is that recent events have demonstrated the shortfall in resilience planning for food

systems, for different reasons but similar outcomes as was highlighted in the CCRA2 Evidence

Report.

The role of markets and trade in managing risks is a key area where coordination, or lack thereof,

and international politics will play a critical role. In an ideal world, it is a tenet of trade theory that

open markets are better at buffering shocks, e.g., Dithmer and Abdulai (2017). However, fully open

markets are increasingly unlikely in the modern geopolitical world, where the post-WW2

architecture of rules-based international cooperation has been eroded (Benton, 2019; Biscop, 2016).

In some countries that fear disruption from food insecurity, and the political fallout this causes,

there is internal pressure to close borders to exports of food. This increases the risk of a global

market shock through decreasing the availability of commodities globally (Brown et al., 2017; Jones

and Hiller, 2017), and which may have significant repercussions for the countries originally banning

exports. Nonetheless, in 2007/8, 2010/11, and most recently in 2020, some governments did just

this, for a range of political reasons (Bailey et al., 2015; IFPRI, 2020).

At the time of writing, no further UK Government plans or policies on this topic have been

announced, leaving a gap in adaptation action. It is our view that any expectation that the private

sector will fill this gap is unlikely to be realised. Actions being taken to build the resilience of food

supply chains have to date mostly been deferred from the public to the private sector. Businesses

will take adaptation actions when the benefits of doing so outweigh their private costs (Cimato and

Mullan, 2010), however, the great complexity of supply chains combined with the uncertainty

around climate change impacts, suggests that the private sector might not take all appropriate

actions (Watkiss et al., 2019).

Market mechanisms, mediated by trade, buffer relatively small impacts of risk cascades, but any

significant event (or coincident impacts in two breadbaskets) has the potential to lead to market

failure (as per 2007/8 and 10/11). Unprecedented events are both difficult, and expensive, to plan

for. Furthermore, market actors recognise that, in times of crisis, food security becomes an issue for

the state and not market actors, which further disincentivises planning. Hence, the ‘adaptation gap’

(as highlighted in the CCRA2 Evidence Report, where exemplars of potential adaptation strategies

are made) remains.



It is also noted that the impact of EU Exit will have potentially significant consequences for policies in

this sector: with new border arrangements and new trade relationships that potentially impact the

availability and price of food. A House of Lords EU Committee 2018 report on ‘Brexit: food prices

and availability’ calling on the Government to produce “a comprehensive food strategy” to ensure

food security post-EU Exit (House of Lords, 2018).

7.2.2.3 Adaptation Score (ID1)

Table 7.4 Adaptation score for risks to UK food availability, safety, and quality from climate

change’s impacts overseas

Are the risks going to be managed in the future?

UK Partially

(Low confidence)

7.2.3 Benefits of further adaptation action in the next five years (ID1)

COVID-19, as a systemic shock that has critically impacted on food systems, and an exemplar of

some of the climate-related risks that may occur in future, highlights the need to consider food-

system resilience as a guiding principle. This is recognised by Henry Dimbleby and the National Food

Strategy’s (NFS) first report (Dimbleby, 2020):

‘There is a lot of work to do if we are to rebuild a food system that delivers safe, healthy,

affordable food to everyone; that is a thriving contributor to our urban and rural economies;

that restores and enhances the natural environment for the next generation; that is built upon

a resilient, sustainable and humane agriculture sector; and that is robust in the face of future

crises.’ (Dimbleby, 2020, National Food Strategy Part One, P.17, emphasis ours)

In particular, there is a need (as acknowledged in the NFS part 1) that due consideration given to a

range of aspects within emerging Free Trade Agreements, post EU-Exit. As highlighted in a Chatham

House report (Benton et al., 2019), lack of consideration of potential environmental governance and

exposure to climate risks could undermine the ability to have a resilient food system as climate risks

mount. In addition, there is the potential for a reduction in UK agricultural resilience if lowering of

production standards became necessary to compete with cheaper imports. Finally, FTAs through

affecting prices and price resilience have potential impacts on UK food insecurity, especially for the

marginalised groups, as noted in NFS.

A recent CCC outcomes study (Watkiss et al., 2019) suggested that the Government could play a role

in removing some of the barriers for the private sector to encourage climate change adaptation.

Simultaneously, this private sector support could ensure a higher level of resilience along supply

chains. Since many supply chains have international dimensions, a multi-national regulatory



structure in the food commodity markets, which are most vulnerable to climate-related supply-side

shocks, could play a beneficial role. Further development and uptake of insurance instruments that

protect both domestic and international actors in food supply chains would also contribute to

adaptation. A greater focus on adaptive management, research, and learning in this sector would

contribute to a more resilient food system. For example, identifying regions/countries which already

show vulnerability to weather events, food production, and transport disruptions, and

understanding how these vulnerabilities might change under different climate scenarios. This would

help to understand the scale of the future vulnerability of the UK market and provide a stronger

rationale for action (Watkiss et al., 2019).

Populations at highest risk of lack of economic access to food are concurrent with those at risk of

obesity and malnutrition (Drewnowski, 2012; Jones et al., 2014b, Food Foundation 2017). Therefore,

addressing food access inequality, access to fresh produce, and informed dietary choices, will likely

have the co-benefit of reducing vulnerability to the risk of decreasing nutritional quality of food

produced due to climate change.

7.2.3.1 Indicative costs and benefits of additional adaptation (ID1)

There are some aspects of climate change risks and responses that have been quantified for food

supply chain resilience, but there is little information on the associated costs and benefits (in

aggregate). Watkiss et al., (2019) for the CCC reviewed the available options and provided some

qualitative analysis of possible costs and benefits. This indicates a range of low-regret options, as

well as some additional options to start the process for planning for these risks.

7.2.3.2 Overall Urgency Score (ID1)

Table 7.5 Urgency score for risks to UK food availability, safety, and quality from climate change

impacts overseas

Urgency Score More action needed

Confidence Medium

The urgency score for this risk is that more action is needed (Table 7.5). Evidence for the urgency of

dealing with this risk has increased since CCRA2 for two reasons: first, there is more evidence of

specific events and their impact on food availability and food prices; and second, the growing

academic evidence that there is a fundamental lack of systemic resilience (Nystrom et al., 2019) has

been brought into sharp focus by planning for the potential shock of EU Exit (particularly the

recognition it brought about fragile supply chains for food and medicine), and by the actual shock to

the global system arising from the COVID-19 pandemic.

7.2.4 Looking ahead (ID1)

As discussed in multiple places above, the current assessment is that hazards, exposure, and

vulnerability to food shocks are increasing, but beyond that, the radical uncertainty of how societies



and economies will be in decades ahead means a prediction of how they will develop is extremely

difficult. However, what is clear is that food system resilience is likely to grow in importance if

climate changes impacts accelerate and if the recent trends away from global cooperation and geo-

political stability continue.

7.3 Opportunities for UK food availability and exports from climate

change impacts overseas (ID2)

Global patterns of climate change can alter the comparative advantage of the UK in producing and

trading in food. Climate change is one of a number of drivers that has an impact on food production

patterns, through changes in productivity (e.g., higher or lower yields) and/or changes in the land

suitable for producing food. The impact of climate change on global production patterns depends

upon the relative importance of extreme events versus more gradual changes in climate, which may

vary geographically. For example, new areas may open for production as a result of gradual

warming, so long as extreme events do not disrupt agriculture and productivity.

On balance, the lack of evidence of global yield increases in response to climate change, and

difficulties in the use of marginal land and water management suggest that food production

opportunities will not be the norm (Challinor et al., 2014). There are, however, opportunities

associated with other drivers of international food systems, not least the ongoing trend towards

plant-based meat substitutes and plant-based diets, which have the potential to both mitigate

climate change and result in healthier diets.

7.3.1 Current and future level of opportunity (ID2)

7.3.1.1 Current Opportunity (ID2)

Whilst realising any opportunity would require advanced planning, this opportunity is by nature

long-term.

7.3.1.2 Future Opportunity (ID2)

Climate change will alter global patterns of food production, creating, at least in theory, new

opportunities for imports and/or exports. It may also increase the production of the current food-

producing areas worldwide. CO2 fertilisation is often cited, alongside longer growing seasons, as a

reason to expect yield increases under climate change. However, when Iizumi and Ramankutty

(2016) investigated the impact of CO2 alongside other drivers of observed yield, by using simulations

to attribute historical yield changes, they found that climate change has decreased the global mean

yields of maize, wheat, and soybean. Similar results were reported for yield projections by Ostberg

et al. (2018) and Shindell (2016).

The lack of observational evidence for global-scale net benefits of climate change on yield suggests

that even where models project crop yield increases, results should be interpreted with some



caution. CO2 fertilisation is often a key factor in such projected increases; yet the effect of elevated

CO2 relies on sufficient crop nutrients and water, which in practice often limit yield increases (Pleijel

et al., 2019; Schleussner et al., 2018). Asseng et al., (2019) used models to project global wheat grain

and protein yield out to 2050 and found that both reduced, despite elevated CO2.

Model projections provide another way of assessing the potential for productivity increases globally

due to climate change. Results suggest that increases will not be the norm (see section 7.3). Hence,

overall, there is little evidence, from observations or models, of anthropogenic climate change

causing increases in food availability to the UK. One, at least partial exception, is fruit and vegetable

productivity, where there is some evidence to suggest climate-induced increases in productivity.

Increases in minimum temperatures will lead to reduced risk of frost (Parajuli et al., 2019); but also

reduced winter mortality of pests (Gruda et al., 2019). Another exception could be pasture and

forage, where higher temperatures and CO2 may lead to an increase in dry matter, thereby

improving livestock production (Martinsohn and Hansen, 2013; Holden and Brereton, 2002).

Through Northern Europe, the potential rainfed grass yield will increase (~14%) (Höglind et al.,

2013), mainly as a result of increased growing temperatures. Mauser et al. (2015) identified the

potential for cropland biomass to be used to meet future biomass demand. Whilst there is

significant potential, realising it relies upon increased cropping intensities (which in many cases

would lead to increased emissions) and spatial reallocation of crops. Furthermore, the extent to

which production is determined by mean changes in climate vs extreme events and variability is a

key factor in determining the sign of that change. Currently, extreme events dominate, as outlined in

section 7.3.

Any increases in productivity do not automatically translate into increases in food availability, which

is the result of multiple climatic and non-climatic drivers, including the balance of supply and

demand that determines where food is grown; the extent to which adaptation keeps up with climate

change; and the course of international trade, as determined by business and by international

politics (see sections 7.7 and 7.10). For example, in the case of meat and dairy 26% of all UK imports

(by value) come from Ireland, 17% from the Netherlands and, 10% from Germany, which are

therefore very important for UK unprocessed meat and dairy. If there are increases in pasture and

forage productivity in these regions then, subject to the multiple drivers of production, this may

result in greater availability of produce for UK import.

The balance of trade is determined in part by comparative advantage. If longer-term climate change

results in a comparative advantage for UK agriculture relative to other food-producing regions, then

there will be opportunities for increased exports (Hristov et al., 2020; Watkiss et al., 2019).

However, as highlighted in CCRA2 Chapter 7, these opportunities come with a risk of unsustainable

intensification of production. The issue of changing comparative advantage is particularly salient in

the context of the Net Zero target, as noted below.

In addition to increases in productivity, there is a second pathway through which climate change can

increase food production. New land may become available for food production overseas. Indeed,

evidence of the potential for agricultural expansion has been broadly corroborated since CCRA2.

Zabel et al. (2014) predicted agricultural land increases of 4.8 million km2 for 2071-2100 under a

SRES A1B scenario, due to increased area of suitable land. However, most of this land is ‘marginally



suitable’ and the estimated cropland expansion could take place in many highly biodiverse regions.

Additionally, recent evidence suggests that most of the newly gained areas are subject to high

interannual and sub-seasonal variability in water balances (King et al., 2018). Further, larger areas of

marginal land will need to be used if production is to be expanded to the newly available climatic

regions (Fodor et al., 2017). Despite these issues, there is some recent evidence that suggests that

European and North American consumers might benefit from lower food prices under cropland

expansion, whilst developing tropical regions will suffer from decreased biodiversity resulting from

the expansion (Zabel et al., 2014).

The analysis presented here so far has focussed on the beneficial effects of climate change, with the

potential knock-on effect of increased food availability via increased imports. There is also the

possibility that climate change's impact overseas may bring increased export opportunities. Where

climate affects overseas production adversely, the UK may be able to make up shortfalls if

production is maintained in the UK (see risks and opportunities for agricultural production in risk

N6). It is theoretically possible, for example, that extreme events could provide an opportunity for

increased exports in the face of a food shock overseas. However, the evidence for this is not

conclusive: three years in the period 2000-2013 were identified in IPCC AR5 Porter et al., 2014) as

having significant climate-induced negative wheat production anomalies (Australia 2002 and 2006;

and Russia 2010). The three years in which these production shocks occurred rank as the 2nd, 7th, and

6th largest UK wheat export volumes4 in the 13-year period. Thus, this simple analysis (which ignores

food quality and price competitiveness) reveals no evidence that production shocks overseas lead

always to increases in UK exports. There is stronger evidence for a converse effect: anomalously high

yields overseas can provide an opportunity for cheaper food in the UK, via global market

mechanisms5.


The UK does not have a major role in determining the extent to which other countries take

advantage of changing climates. There is robust evidence with high confidence that global food

production will decrease with increasing global mean temperature (see introduction to ID1). Supply

chain lock-in issues do exist. New fixed trade agreements resulting from EU Exit, or COVID-19

disruptions could result in lock-in to international supply chains that fail to take advantage of any

changes in food availability due to climate change.

7.3.1.4 Cross cutting risks and Inter-dependencies (ID2)

There is significant interaction of this opportunity with the status of trade between the UK and rest

of the globe. This opportunity overlaps with the risk in ID1 above.

4 https://www.statista.com/statistics/299768/wheat-uk-exports-united-kingdom/

5 https://www.worldbank.org/en/news/press-release/2015/07/01/global-food-prices-drop-to-a-five-year-low

https://www.statista.com/statistics/299768/wheat-uk-exports-united-kingdom/

https://www.worldbank.org/en/news/press-release/2015/07/01/global-food-prices-drop-to-a-five-year-low




There are also implications for the net-zero target: emissions scenarios are sensitive to assumptions

about UK food production and the current CCC analysis (CCC, 2020) assumes domestic production

stays constant (whereas it may grow, or shrink, in the future depending on demand and changing

policy and market environments post-EU-exit). Potential changes in emissions due to responses to

international climate risks and opportunities include changes in transport, via the movement of

goods transmission pathway, due to changes in imports and exports.


As mentioned, higher yields overseas could lead to cheaper food in the UK and therefore making

food increasingly accessible. It is not clear how this opportunity may benefit some groups more than

others. For example, increasing commodity crop production (sugar, oil, starchy grains) could lead to

higher consumption of cheaper highly processed foods by the economically marginalised, leading to

a greater burden of non-communicable disease. Conversely, greater availability of fruit and

vegetables may have the opposite impact.


Table 7.6 Magnitude score for opportunities for UK food availability and exports from climate






end of century




end of century

UK Low

(Medium

confidence)

Low

(Medium

confidence)

Low

(Medium

confidence)

Low

(Medium

confidence)

Low

(Medium

confidence)

Whether or not any import or export opportunities are realised depends upon whether and how

food production is translated into increases in food availability. On balance, increased productivity

forms a minority in the projections of climate change impacts. Further, there are thresholds above

which food production decreases (see section 7.3). The lack of evidence of global yield increases,

and the difficulties, outlined above, in the use of marginal land and in water management suggest

that food production opportunities will not be the norm. Hence there is medium confidence that

opportunity ID2 is of low magnitude for all climate scenarios.



7.3.2 Extent to which current adaptation will manage the opportunity (ID2)

7.3.2.1 Effects of current adaptation policy and commitments on current and future opportunities (ID2)

It is unclear what actions are currently planned on trade policy for the next five years that might act

to take advantage of any benefits from climate change on UK agricultural production. Changes to

imports and exports will no doubt occur under EU Exit and it may be that opportunities for UK food

availability and exports from climate impacts overseas are not high on the agenda. The agility of

businesses to respond to EU Exit will perhaps also be an indicator of the ability to respond to climate

impact opportunities in the future if these arise.


Taking advantage of any specific opportunities that do emerge from long-term climate change relies

on viable access to international markets. For example, with access to the right markets, the UK

might export more to the southern EU (as documented on page 27 of CCRA2), or to other parts of

the world (Hristov et al., 2020), in order to compensate for regional deficits. More evidence for

opportunities for export to the southern EU has been produced since CCRA2 (e.g., Fronzek et al.,

2019).

Statements on specific further action on this opportunity are difficult to make since the extent of

planned actions is unclear. In broad terms, actions over the next five years could usefully focus on

access to a broad range of international markets, via goods, finance, and markets transmission

pathways, in order to ensure that opportunities can be capitalised upon.

Statements on actions regarding the sourcing of food are also extremely difficult to make. Even if –

contrary to the most likely scenario indicated here – there were a detectable increase in food

availability due to climate, ongoing changes in trade agreements and policy, as discussed in section

7.9, are likely to be far more important in determining where food is sourced. Thus, the evidence

suggests that this opportunity does not need further action in the next five years.


Table 7.7 Adaptation score for opportunities for UK food availability and exports from climate


Are the opportunities going to be managed in the future?

UK Yes

(Medium confidence)




7.3.3.1 Indicative costs and benefits of additional adaption (ID2)

As reviewed in section 7.4.2, ensuring access to a broad range of international markets would

capitalise on any opportunities associated with climate impacts overseas. There is no evidence to

suggest further actions that would support such opportunities. Access to markets, which was

covered in some detail in CCRA2 Chapter 7, has the co-benefit of providing some resilience to

external shocks, be they climate-induced, or sourced elsewhere (e.g., a global health disruption such

as COVID-19). Hence there are multiple lines of reasoning that suggest benefits of access to markets.


Table 7.8 Urgency score for opportunities for UK food availability and exports from climate change

impacts overseas

Urgency Score Watching brief

Confidence Medium

The urgency score for this risk is for a watching brief (Table 7.8). The evidence reviewed above

suggests that, whist actions to increase access to markets produce clear benefits, the opportunities

associated with climate impacts overseas are not, in and of themselves, sufficient cause for such

actions.

7.3.4 Looking ahead (ID2) Global food production patterns are important for reasons well beyond any opportunities they might

afford to the UK. Numerous drivers determine the global situation that may or may not give rise to

opportunities associated with climate impacts overseas. As was noted in some detail in CCRA2

Chapter 7, these changes have the potential to improve the health of the UK population whilst also

reducing emissions. Demand for plant-based meat substitutes is growing globally (Curtain and

Grafenauer, 2019) and there is evidence also of growth in plant-based diets in high-income countries

(Medawar et al., 2019). If these trends continue then they will eventually alter the patterns of global

food production. If these changes are planned well, they will result in a reduction in emissions (IPCC,

2019).



7.4 Risks and opportunities to the UK from climate-related international human mobility (ID3) Negative climate change impacts will make some places more difficult to live in and could undermine

the development gains overseas in which the UK has invested. One potential adaptation is

displacement and migration (see framework movement of people transmission pathway). Affected

areas are most likely to be areas in the Global South exposed to frequent climate extremes with high

dependence on agriculture and weak social safety nets. Unplanned, unsupported, and precarious

climate migration presents risks to the human rights of the people on the move, as well as their

wider social and economic opportunities. Most climate-related migration in the near future will be

domestic, within affected countries or regions. Thus, the UK is unlikely to be a major migrant-

receiving country. Evidence of negative socio-economic impacts or security threats associated with

migration is weak. For example, impacts of migration on the labour market of the receiving country

or area, are negligible or net positive (Dustmann and Frattini, 2014).

Where migration to the UK does increase due to socio-economic, political, and environmental

change, climate will be one of many drivers of migration, and migration will take place along existing

routes. However, increased mobility as a result of climate change is likely. Where people are on the

move between regions overseas, there are risks to the well-being of those individuals and as such

the potential to undermine development gains overseas (as described in CCRA2; and evidence since

further supports this finding). However, there is little evidence to suggest that there will be knock-on

risks to the security of the UK, for example, through migration leading to conflict. Adaptation to this

risk involves ensuring pathways for regular migration and working to alter negative perceptions of

migration in receiving countries alongside supporting development, infrastructure, strong

institutions, and transparent decision-making in other countries. Future increases in migration

overseas as a result of climate instability present a socio-economic opportunity if migrants are

supported in integrating effectively into the host society.

The weather usually affects migration indirectly through its impact on natural-resource dependent

livelihoods such as agriculture (e.g., Kubik and Maurel, 2016), or directly through displacement from

extreme events such as floods and tropical storms (e.g., Islam and Shamsuddoha, 2017), coupled

with a lack of adaptive capacity. These are often experienced together, for example, sea-level rise is

a slow onset event that will also worsen coastal hazards - increased flooding, erosion, salinization of

agricultural land and freshwater aquifers, and eventual inundation (Hauer et al., 2020). Most

climate-related migration is internal to the affected country since crossing international borders is

financially and emotionally expensive (Kaczan and Orgill-Meyer, 2020). While there is always an

element of choice in migration, the imperative to leave tends to be stronger and more urgent in

rapid-onset events (i.e., when cyclones threaten lives, property, and key infrastructure) while the

climate becomes part of economic concerns in slow onset events (i.e., when changing precipitation

regimes lead to a decline in agricultural productivity). The duration of migration will also vary

depending on the cause of migration.

Resettlement due to widespread damage after extreme weather, or in anticipation of places

becoming uninhabitable, is another mobility response that involves whole communities moving



together usually with assistance from external institutions. Resettlement prior to the onset of the

worst climate impacts is preferable because it ensures that communities remain together and can

move in a way that preserves valued practices. Resettlement mostly leads to negative well-being

outcomes for the population, but impacts are fewer if resettlement is voluntary and affected

communities are involved in decision-making (McMichael et al., 2019).

The anthropogenic element of the environmental hazard is difficult to attribute, that is to say, how

much of increases in intensity or frequency of extreme weather is attributable to climate change.

However, the influence of climate change is likely to increase as climate change accelerates over the

next few decades. Lack of attribution does not have to act as a barrier to interventions, because

interventions in this area will have broad positive development outcomes (Schwerdtle et al., 2018).

While a relationship between environmental change and migration is well-established, the nature of

that relationship is context specific. This is due to the social, economic, cultural, and political context

that mediates the impact and response, and the multi-causal nature of migration which is always the

result of multiple drivers (Black et al., 2011). This also means that the proportion of migration driven

by environmental factors is difficult to isolate. The type of migration outcome from climate impacts

depends on the characteristics of the weather event, the socio-economic and political conditions,

and the level of assets of the household (Cattaneo et al., 2019). Environmental change can lead to an

increase in migration as people leave to find alternative income opportunities, can decrease as

people lose the capital required to fund migration, or can change its characteristics, for example,

flows may be gendered as men are generally more able to take up migration opportunities (see

Kaczan and Orgill-Meyer, 2020 for a review).

Research since CCRA2 has furthered our understanding of when migration can be considered a

successful adaptation to climate change. That is to say when it increases the well-being of those

involved. Levels of income, assets, and networks vary, altering people’s ability to adapt in situ to

climate impacts and thus their need to migrate, as well as their ability to migrate in a manner that

reduces their vulnerability. Migration that takes place under duress in conditions of stress (i.e.,

distress migration) rarely increases the well-being of the migrant or their family and tends to only

perpetuate or worsen conditions (Natarajan et al., 2019). Households with higher income have more

choice (Adams & Kay, 2019) having both higher capacity to make adaptations that allow them to stay

in location, for example, by adapting their income source, but also to access better opportunities

through migration (Riosmena et al., 2018). At the other end of the spectrum are households that,

due to insufficient capital, are unable to adapt in situ or migrate and live-in areas exposed to climate

risk and are highly vulnerable with low adaptive capacity (Suckall et al., 2017).

Thus, adaptation to climate migration involves improving policy responses on migration to support

people in their migration choices, or lack thereof (Wrathall et al., 2019) and facilitating translocal

lives, where people are active in the social, political, and economic spheres of two different places

through travel and telecommunications and facilitating diverse mobility responses that increase

resilience (Porst & Sakdapolrak, 2018).

Discussions on how to support climate-related migrants are occurring in the context of an

increasingly bordered world (McLeman, 2019). Migration is often conceptualised as a threat to

national security in media and policy discourses, but this characterisation tends to depend on often



incorrect perceptions and cultural stereotypes, for example, the perceived negative impact of

immigrant labour on employment (Wallace, 2018), an association made between terrorism in the EU

and migrants (Bove & Böhmelt, 2016), and perceived threats to a race-based national identity

(Rudolph, 2006; Fassin, 2011). Migration is rarely an economic threat as migration has been shown

to have extremely small impacts on wages and employment rates (Docquier et al., 2019). Future,

border policies, policing, and physical barriers to prevent migration tend to be symbolic, rather than

effective at preventing irregular migration (Slaven & Boswell, 2019). Should immigration to the UK

increase, and thus the movement of people transmission pathway, as a result of climate change

disruption overseas, our assessment is that the risks lie in failing to maximise on potential

opportunities, rather than in avoiding any security risk. Whether migration becomes an issue for the

UK depends on policies put in place to promote regular migration and facilitate positive public

attitudes to diversity and inclusion. This allows the Government to manage social amplification or

attenuation of risk, and issues arising from the perception of migrants as a security risk.

International travel is costly and requires certain levels of human (e.g., education, ability to navigate

border/visa requirements) and financial capital (e.g., for flights, visas, to pay smugglers). Where

international, displaced populations will move to countries with contiguous borders or countries

where there are already established migrant corridors, transport links, and low institutional barriers

(e.g., visa waivers) (Veronis et al., 2019). The evidence for climate-related international migration,

where occurring, is within the regions of sub-Saharan Africa and South Asia (Obokata et al., 2014,

Veronis et al., 2018) with climate as one contributing factor among political and economic drivers.

Thus, where international migration to the UK does occur, it is likely to be the endpoint of sequential

migration and migrants are likely to be professionals able to meet visa requirements. There are a

handful of studies since CCRA2 that have found a correlation between negative climate impacts and

low-to-high income country migration (e.g., Coniglio and Pesce, 2015) and asylum applications (for

example, for a period during the Syrian conflict (Abel et al., 2019). However, associations do not hold

outside the particular dataset and time period and so cannot be generalised (Mach et al., 2020).

There are a few studies qualitative studies exist that have discerned a climate factor in economic

decisions to migrate from low to high-income countries (McLeman et al., 2018).

7.4.1 Current and future level of risk and opportunity (ID3)

7.4.1.1 Current Risk (ID3) The equivalent risk to this one in CCRA2 was “Risks to the UK from climate-related international

human displacements”, and it assessed the risk of climate change undermining development

progress through the impact of extreme weather events overseas. Based on the improved

understanding of responses to fast and slow onset events, we find here that there is a broad range

of human mobility responses, including migration, displacement, and resettlement. These act across

continuums of both forced to voluntary, and short to long distance.

CCRA2 Chapter 7 found that displacement due to extreme weather had significant potential to affect

UK’s interests overseas by undermining development efforts, on which the UK has made significant

expenditure (Challinor et al., 2016). Further, the report concluded that extreme weather (including



wildfires) has a negative effect on the health and well-being of those exposed and those forcibly

displaced by climate-related hazards. These risk drivers continue to be important. Since CCRA2,

damage from cyclones and tropical storms globally has continued unabated, with the evidence

suggesting an increase in the intensity, frequency, and scale of loss from extreme weather events

and their interactions (AghaKouchak et al., 2020; Coronese et al., 2019) as well as the potential for

shifts in the regions that are habitable for humans (Xu et al., 2020).

Whilst the risk drivers have increased, since CCRA2 there have also been significant changes in global

border regimes, and thus the movement of people transmission pathway, that may impact this risk.

On one hand, there has been an increased focus on closed and protected border regimes where

migrants are more likely to be represented as a national security threat. This has occurred in places

like the US-Mexico border, the Lebanese-Syrian border, and the Turkish-Greek border. The EU has

strengthened the powers of Frontex, its border agency, and EU countries have made various

bilateral agreements to try to close migration routes from North Africa to Europe (Bialasiewicz,

2012). Since the previous report, the UK has implemented a series of policies to reduce the ease of

migration to the UK (Webber, 2019). For example, requiring proof of residence to take up work, rent

property, or make use of the NHS. Since the UK began its process of leaving the EU, citizens from the

EU have had to apply for residency status.

On the other hand, there is increased global collaboration on migration, and consensus on the need

to take a human-rights’ centred approach to migration, exemplified in the United Nations Global

Compact for Safe, Orderly and Regular Migration (The Global Compact). The United Nations

Framework Convention on Climate Change at its Conference of Parties (COP) in Paris in 2015

established a Displacement Task Force to “develop recommendations for integrated approaches to

avert, minimize and address displacement related to the adverse impacts of climate change”

(Decision 1/CP.21) (UNFCCC, 2016). These processes may provide a framework for international

cooperation on climate-related migrants into the future.

7.4.1.2 Future Risk (ID3) In the longer term, climate change will alter the relative habitability and attractiveness of different

places and thus change the size and direction of flows. For example, some areas of the Middle East

and South Asia are experiencing extreme temperatures that make working outside a severe health

risk (Kjellstrom et al., 2016; Pal and Eltahir, 2016). Other places may eventually become more

attractive, such as high latitudes when higher temperatures increase the agricultural potential and

alter the geographical ranges of staple crops (Xu et al., 2020). The result of these changes in climate

is likely to be some global population movement (Xu et al., 2020), but this relationship will be

mediated by social factors such as deepening inequality, a globalised economy, increased

connectivity through telecommunications and air travel; and other causes of human mobility such as

political instability and oppression, conflict and low levels of development. Climate change will act as

a threat multiplier for other processes that make places less attractive, for example, through its

interactions with armed conflict (Braithwaite et al., 2019).

The UK’s exit from the EU will shape relationships of England, Scotland, Wales, and Northern Ireland,

where there already can be a disconnect between responsibility for welfare and integration of



migrants and asylum seekers (which fall under the remit of the administrations) and UK immigration

policy (Mulvey, 2015). Further, internal mobility within the UK is relatively unresearched and has

implications for responding to any potential increase in migration in the longer term. For example,

asylum seekers are sometimes dispersed throughout the UK and minority ethnic groups (both British

and non-British born) have different mobility patterns to their UK counterparts (Darlington-Pollock

et al., 2019).

In terms of the migration patterns of those who have come to the UK, studies show the negative

impact of different policy approaches of the devolved administrations on their ability to successfully

integrate asylum seekers, for example, differences between devolved administrations housing

health and immigration policy (Mulvey, 2015). The Foresight report in 2011 highlighted the potential

benefit to all nations of supporting safe and orderly migration that maintains the dignity of the

migrant. Thus, there is an opportunity for the UK to establish procedures to ensure that any

increases in migration are beneficial to the nation. Second, there are win-win opportunities ensuring

that overseas development and humanitarian response empower local communities such that they

are not forced to migrate.

Likewise, internally to the UK, there will be new dynamics with the UK’s overseas territories, most of

which are island nations exposed to the impacts of climate change with their own set of

vulnerabilities, relating to, for example, asymmetrical governance structures (Petzold and Magnan,

2019).

7.4.1.3 Lock-in and thresholds (ID3) The UK will miss an opportunity if it is not able to maximise on the benefits that new migrants bring

to the UK. Further, if the UK does not reinvest in social mechanisms that allow newcomers to

integrate effectively into the job market and local culture there is the potential for negative

repercussions in terms of social tension. The current political climate is not amenable to investing in

consensus and community-building (Mulvey, 2015).

7.4.1.4 Cross cutting risks and Inter-dependencies (ID3) There are interacting risks with conflict, health, governance – diaspora populations, and tourists and

health. Additionally, there are interacting risks with food availability, safety, and quality, which can

cause climate migration.

7.4.1.5 Implications for Net Zero (ID3) There are limited implications for Net Zero related to this risk. 7.4.1.6 Inequalities (ID3) It is not fully clear how this risk may impact some groups more than others. Studies show that ethnic

minority groups are less mobile than their white counterparts and non-UK born minorities are more

likely to move at certain life stages, but this effect disappears once time spent in the UK is

controlled.



7.4.1.7 Magnitude Score (ID3)

Table 7.9 Magnitude score for risks and opportunities to the UK from climate-related international

human mobility





end of century




end of century

UK Low

(High

confidence)

Low

(Medium

confidence)

Low

(Medium

confidence)

Medium

(Low

confidence)

Medium

(Low

confidence)

The result of the above set of conditions is that our view is that the current risk of climate-induced

international mobility causing issues for the UK is considered low, with high confidence (Table 7.9).

Climate change will increasingly challenge overseas development gains and the welfare of

individuals in other countries. Numbers of people on the move are likely to increase in the long term

due to the destruction of property and livelihoods from extreme weather events and changes in

agricultural productivity.

The UK is unlikely to receive many migrants as a proportion of the total, in the short-to-medium

term. Those people that do arrive represent an opportunity, with the potential to meet skills

shortages, for example, care workers associated with an aging population. Whether people on the

move represents a risk to economic interests and social stability in the UK and its interests overseas

depends on whether there are opportunities for safe and orderly migration, whether predominantly

urban receiving areas in other countries are prepared (e.g., in terms of infrastructure), and effective

governance structures are in place. The UK is entering into a period of unprecedented change in its

international relations as it exits the European Union, while having also merged its foreign policy and

diplomacy and international development departments into the Foreign, Commonwealth and

Development Office.

In the long term, changes in the geographical ranges of staple crops have the potential to cause a

significant redistribution of the population with associated increases in mobility (Xu et al., 2020).

While the UK will be the destination of very few of these migrants, changing population distribution

overseas will likely have broader economic and geopolitical impacts relevant to the UK, although the

academic literature is weak in this area due to issues highlighted earlier of projecting socio-economic

change into the future. Thus, the risk to the UK in the longer term is Medium, with Low confidence.



7.4.2 Extent to which current adaptation will manage the risk and opportunity (ID3)

7.4.2.1 Effects of current adaptation policy and commitments on current and future risk (ID3)

The challenges posed by human migration to the UK are social issues to be solved through policy and

planning. Issues created by people on the move relate to integration, assimilation into the job

market, and ensuring sufficient services, infrastructure, and access to justice/legal proceedings in

destination locations. Since most migration is internal or to neighbouring countries, impacts of any

climate-related displacement are likely to be borne predominantly by the countries also

experiencing the climate change impacts from which people are moving. These countries will most

likely be low- to middle-income countries in the global South and as such are often beneficiaries of

UK Official Development Assistance, referred to as the overseas aid budget.

Climate resilient development, adaptation, and appropriate disaster management and preparedness

practices will go some way to preventing overseas development gains being undermined by

worsening climate change impacts. However, there are limits to the ability of the UK’s overseas aid

budget to reduce the exposure of vulnerable populations to climate hazards such that migration is

not required. Although an important element in overall UK Government spending, it is insignificant

compared to the number of global poor who will face an adaptation gap, with current estimates of

annual adaptation costs in developing countries of USD 70 billion, rising to 140-300 billion in 2030

(UNEP, 2018, UNEP 2021).

The UK has publicly committed to double its current ODA spend specifically intended to tackle

climate change and help people adapt to its negative effects – the UK’s International Climate Finance

(ICF) - from £5.8bn to £11.6bn between 21/22 and 25/26. Although this is not all specifically

intended to address migration issues and takes place within the overall context of reduced spend on

ODA, the ambition to spend 50 percent on climate change mitigation and 50 percent on adaptation

is welcome and will help improve peoples’ resilience.


Our view is that development that aims to stem migration by addressing the root causes of poverty

or unemployment in traditional sending countries is likely to be unsuccessful at reducing any

migration due to climate change. Development is suggested as a solution when migration is analysed

in isolation rather than contextualised in wider processes of globalisation and other North-South

relations such as labour markets and production demands that drive global migration patterns

(Castles, 2004; Anderson, 2017). Such responses miss seeing migration as a social process with its

own set of dynamics (Castles, 2004).

At present, there is no coordinated policy approach to adapt to this risk, to ensure receiving areas

benefit from new migrants and to prevent migration undermining the wellbeing of those on the

move. This would require embedding migration in broader international relations and ensuring

migration priorities in the UK follow strategic priorities relating to different UK government policy

objectives.



For the next five years however, strong adaptation is required in the UK to ensure that adaptation

governance structures are in place internationally to ensure that people displaced by climate change

overseas are able to move to seek alternative opportunities and that likely receiving areas (e.g.,

cities) are supported in planning for changes in population. Domestically, the UK can plan to take

advantage of potential opportunities associated with increased migration to the UK.


Table 7.10 Adaptation score for risks and opportunities to the UK from climate-related

international human mobility

Are the risks and opportunities going to be managed in the future?

UK Partially

(Low confidence)



Any adaptation in the next five years would most likely involve protecting the human security of

people on the move, and those in low-income receiving areas in the Global South, rather than on the

national security of the UK. Solutions lie in creating safe pathways for migration, the movement of

people transmission pathway, and helping the UK and other host countries to accommodate

newcomers through education and language courses, training and retraining in skills relevant to the

job market, planning for infrastructure and services in areas likely to receive migrants, as well as

managing public perception of migration. Migration as an adaptive response, and a proportion of

the population outside their places of origin, are constants of any society. Thus, opportunities lie in

recognising the agency of migration and the novel forms of organisation and cooperation that

emerge within migrant groups that have the potential to benefit the UK and its overseas interests

(Papadopoulos & Tsianos, 2013; Stierl, 2018).

The Foresight report in 2011 (Foresight & Government Office for Science, 2011) highlighted the

potential benefit to all nations of supporting safe and orderly migration that maintains the dignity of

the migrant. In the context of the Lifetime Skills Guarantee the UK Prime Minister has highlighted

skilled labour shortages, that could be filled with migration until filled domestically. Thus, there is an

opportunity for the UK to set up procedures to ensure that any increases in migration are beneficial

to the nation. Second, there are win-win opportunities ensuring that overseas development and

humanitarian response empowers local communities such that they are not forced to migrate but

have agency in if, when, and where they chose to move.

The Foresight follow-up report noted that different Government Departments were responding

quite differently, thus there is the opportunity to create greater cohesion between departments.

While there are several Cabinet committees dedicated to considering both domestic and



international issues, it appears that the membership of some of these committees could be more

strategically focussed to tackle the linkages between climate and migration. For example, the

overarching National Security Council chaired by the Prime Minister which inter alia considers

‘international relations and development’ included both the Home office and DFID (now FCDO). The

Climate Action Implementation Committee included DFID but not the Home Office, while the

Committee on Climate Action Strategy included neither DFID nor the Home office.

During the period immediately following the UK’s exit from the European Union there is a window of

opportunity to provide pathways for safe and orderly migration to the UK. Migration decisions and

migration flows are already mixed, and so climate migrants will come to the UK, not as a separate,

easily defined group, but as economic migrants or potentially as asylum seekers. The UK can

maximise the benefits that any new migrants bring and thus there are obvious benefits to the UK’s

investment in social mechanisms that allow newcomers to integrate effectively into the job market

and local society. The merger of DFID and the Foreign and Commonwealth Office (FCO) as FCDO, can

provide an opportunity to develop more deliberate climate and migration policies with oversight

from the most senior Cabinet Committees.

Monetised indicative costs and benefits of additional adaptation are not currently available at the

time of writing.


Table 7.11 Urgency Score for risks and opportunities to the UK from climate-related international

human mobility


Confidence Medium

The urgency score for this risk is watching brief (Table 7.11), due to our estimated low current and

future risk of climate migration directly affecting the UK and migration as an opportunity rather than

a risk to the UK. For this risk, indirect effects such as the role of social amplification remain

important and require managing public perception of migration.

However, adaptation in terms of safe pathways for migration and accommodation of migrants does

require attention. Since the publication of CCRA2, the risks posed by climate change to the well-

being of climate-vulnerable populations forced to migrate in conditions of low agency and distress

has not diminished. However, research has provided a better understanding of the complexity and

diversity of migration as a response to climate change and the role of policy in ensuring that

migration produces positive development outcomes in sending and receiving areas. At the same

time, since CCRA2 a window of opportunity has opened to make such policy interventions with the

exit of the UK from the European Union and the creation of the Foreign, Commonwealth &

Development Office (FCDO). This further allows perhaps greater management of the public

perception that migration is a significant risk to the UK.




The UK is currently repositioning itself with respect to the European Union. Although the UK has

never been part of the Schengen Area, EU Exit will have impacts on the countries from which the UK

draws to meet labour shortages. This will evolve as the UK will develop relationships with countries

outside of the EU. If UK labour shortages are met through non-EU migration, and especially,

migration from the Global South, there could be an increasingly strong climate signal in economic

decisions to migrate.

The merger of the UK’s Foreign Office with the Department for International Development into

FCDO will likely bring challenges as well as opportunities - for this risk and for other international

risks covered in this chapter. Closer collaboration between the two Departments was already

happening, especially in-country, but the merger has greatly accelerated that process. The

mechanics of merging two organisations are not straightforward, will take several years to be fully

implemented and risk diverting time and resources from the shared objectives of both. On the other

hand, the greater financial and diplomatic reach of the combined Department could greatly enhance

the impact of the UK’s development efforts. Many of the climate related challenges for the Global

South are intertwined with the policies and practices of the Global North as mentioned previously,

not just the availability of finance, and so the international influence of the FCDO will be critical to

achieving the UK’s development objectives.

Since overseas development has the potential to reduce vulnerability and increase adaptive capacity

to climate impacts and distress migration, then this UK shift in focus may have an impact on the way

in which displacement and loss from extreme weather events and climate change translates into

migration outcomes.

7.5 Risks to the UK from violent conflict overseas resulting from climate

change (ID4)

Recent literature continues debating the role of climate change as a driver of conflict. Nevertheless,

there is consensus in the recognition of climate as an amplifier of root causes for conflict, whilst also

recognising that a range of other drivers affect the causal association between climate and conflict.

These include, but are not limited to, pre-existing conflict (at local and country scales), level of

democratisation, post-colonial transformation, economic context, and population growth. Overseas

conflict can have an indirect impact on the UK through a variety of UK overseas interests, and

various transmission pathways such as governance, people (migration), refugees, and finance and

markets.



7.5.1 Current and future level of risk (ID4)

7.5.1.1 Current Risk (ID4)

Conflict – along with humanitarian assistance – is among the principal regions for the deployment of

the UK military overseas. Climate change has important implications for the military, both in terms

of the contribution to the direct issues underlying deployment (such as conflict), but also in the way

that climate change may affect the functioning of equipment or personnel (e.g., heat stress), or even

access to places where training can safely be conducted (IMCCS, 2020).

Recent literature (Levy et al., 2017; Gilmore et al., 2018; Sakaguchi et al., 2017) continues debating

the role of climate change as a driver of conflict. Nevertheless, there is consensus in the recognition

of climate as an amplifier of conflict, whilst also recognising that a range of other drivers affects the

causal association between climate and conflict (Peters et al., 2020). These include, but are not

limited to, pre-existing conflict (at local and country scales), level of democratisation, post-colonial

transformation, economic context, and population growth (Harari and Ferrara, 2018; Owain et al.,

2018; Breckner, 2019) across a range of geographies.

Abel et al. (2019) corroborate findings of both Harari and Ferrara (2018) and Breckner (2019) that

broad-scale drivers of the likelihood of conflict are pre-existing conflict, but also identify a higher

likelihood of conflict in ‘medium-democratised’ governments compared to ‘full-democratised’

governments. In addition, as noted in ID3 environmental change can lead to the temporary or

permanent displacement of people within countries, which in turn could increase the likelihood of

conflict within countries through bad policy or planning. More generally, as noted in Section 7.5,

conflict can lead to increased pressures elsewhere through processes including forced migration and

refugees (Braithwaite et al., 2019).

While interstate conflict has reduced over the last few decades “the risks associated with climate-

related disasters do not represent a scenario of some distant future. They are already a reality for

millions of people around the globe – and they are not going away,” Rosemary DiCarlo, the Under-

Secretary-General for Political and Peacebuilding Affairs addressing the UN Security Council in

January 2019 (UN News, 2019). For example, the conflict around Lake Chad has been, alongside

other factors, linked to climate change and ecological changes (UN Security Council, 2017).

Extreme weather events can also be causally linked to conflict through the mechanism of food

production shock (Headey and Fan, 2008; Headey and Fan, 2010). Food production shocks can also

drive food price shocks (see ID1) and these food price shocks can lead to riots and unrest (Lunt et al.,

2016). The main drivers for food insecurity are long-term social trends (Puma et al., 2015), however,

extreme weather events driven by climate change can be a contributor to locally and globally

significant shocks. For example, while the civil war in Syria has a number of complex interrelated

factors “water and climatic conditions have played a direct role in the deterioration of Syria’s

economic conditions” (Gleick, 2014, p.331) with a three-year drought preceding initial protests

(Kelley et al., 2015).



Food access and affordability for the poorest sections of society is a critical issue. Natalini et al.

(2017) found that when the Food and Agriculture Organisations’ global Food Price Index (FPI) went

beyond a threshold of 140, food riots are more likely to occur. They found three periods where the

FPI was above this level and that the vast majority of civil unrest events linked to food insecurity

occurred during these periods (Figure 7.2). These riots can be globally significant and include the

events that fed into the Arab Spring.

Figure 7.2 “Timeline with database for food riots. The top part of the figure highlights the periods when

the FAO FPI was above the threshold, whereas the bottom part of the figure shows countries that

experienced food riots between 2005 and 2013.” Reproduced from Natalini et al. (2017)

Breckner (2019) studied the impact of scale and found relationships between conflict and

temperature to be significant when spatially and temporally disaggregated. High-resolution analysis

of conflict and climate over Africa, found that temperature extremes (95th percentile deviation from

the monthly specific mean in a given grid cell) are strongly and significantly related to an increase in

the number of conflict outbreaks. She also found that the length of climate events was an important

consideration; two-month events were more strongly related to conflict outbreaks than one-month

events (Breckner, 2019). However, there is a complex relationship between conflict and

temperature extremes, with socioeconomic factors playing an important part.



Harari and Ferrara (2018) contributed to developing more high-resolution analysis of conflict-

migration-climate relationships, by using a 1-degree grid-scale, also over Africa, between years 1997

- 2011, applying Standardised Evapotranspiration Index (SPEI), an indicator of agricultural-drought,

for the specific growing season of crops in each grid cell. They found there was a specific SPEI-

conflict relationship at the local level, but that conflict also exhibits a ‘persistence’ across time and

space. The likelihood of a conflict was more strongly related to a pre-existing (12% points increase in

the likelihood of a conflict outbreak) or localised conflict (2.3% higher), than to localised agricultural

shock (SPEI) (1.3 % higher).

The exact causal factors at play in these studies are highly contested. A self-reported limitation of

these studies is that at a fine scale, the role of institutions is outside their system boundary, but may

be of significant importance as a broader scale driver (Harari and Ferrara, 2018; Breckner, 2019).

Mach et al. (2019) assessed the current understanding of the relationship between climate and

conflict using assessment facilitators with a group of highly experienced academics working on

climate and conflict through individual expert-elicited interviews and a 2-day deliberation. They

concluded ‘These experts agree that climate has affected organized armed conflict within countries.

However, other drivers, such as low socioeconomic development and low capabilities of the state, are

judged to be substantially more influential, and the mechanisms of climate–conflict linkages remain

a key uncertainty. Intensifying climate change is estimated to increase future risks of conflict’ Mach

et al. (2019).


In the future, these global risks, particularly associated with food and extreme weather, may become

more evident and further impact on UK interests overseas (and UK supply chains) - whether in their

impact on the need for military deployment (peacekeeping, or for humanitarian assistance), or local

governance, tourism or impact on supply chains. In a scenario of 2°C global warming by 21006,

Harari and Ferrara (2018) estimate a 7% average increase in conflict incidence over the next 35 years

(holding other variables and relationships as steady). In addition, research on the global scale since

CCRA2 has highlighted the importance of indirect associations between water and conflict, such as

water and energy, urban versus rural water demand, and economic impacts of floods, rather than

directly assessing climate-water-conflict connections. Research on direct water conflict linkages

aligns with this message of multiple contributing factors. For example, Munia et al. (2016) study on

transboundary (shared) river basins found the frequency of cooperative or conflictive events was not

directly related to increased water stress associated with upstream water use. However, Ghimire

and Ferreira (2016) show that flooding events can fuel existing conflict.

While many of the direct impacts are likely to occur within particular states and lead to direct and

localised conflict some impact could be felt across countries, through energy, water, and governance

transmission pathways. As highlighted by Smith et al. (2018a) “Water scarcity and climate-related

variations in water availability can increase tensions and conflict between countries. In these and

other instances, conflict was related to stress from climate-related events, but non-climatic factors

also had an important role.”

6 FGOALS-g2 climate model with the RCP2.6 scenario



Motivated by the fact that urban water demand will increase by 80% by 2050, Flörke et al. (2018)

simulated the effects of higher demand and climate change effects on shifts in timing and volume of

available water on 482 of the world’s largest cities. They found roughly 233 million people living in

27% of the cities considered experienced demand levels higher than surface water availability. High

potential for urban and agricultural sector conflict was identified in the 19% of cities that are reliant

on surface water transfers. With increasing urban poverty and inequality, the burden of this shortfall

is likely to fall disproportionately on the poor.

Water can also have a more indirect impact on conflict through energy although this link is currently

not strong. For example, Van Vliet et al. (2016) modelled the global effects of changes in water

resources and electricity generation using data on 24,515 hydropower and 1,427 thermoelectric

power plants, applied to climate scenarios reaching around 1.6°C and 4.3°C global warming at the

end of the century7. They projected worldwide decreases in usable generating capacity of 81-86% for

thermoelectric plants and 61-74% for hydropower plants for 2040-2069. This potential loss of

capacity could lead to power shortages. Power shortages and blackouts have in the past led to riots

and looting (Nye, 2010).

Separately, climate change, through restrictions on fuel type, hydration requirements, and changes

to battlefield environments, will also drive significant changes to military deployment and strategy

(Brosig et al., 2019).

7.5.1.3 Lock-in and Thresholds (ID4)

As highlighted by Smith et al. (2018a) “Water scarcity and climate-related variations in water

availability can increase tensions and conflict between countries. In these and other instances,

conflict was related to stress from climate-related events, but non-climatic factors also had an

important role.” When food price shocks occur, they can lead to riots and unrest. Similarly, a FAO FPI

above 140, thus providing a threshold, increased the likelihood of food riots (Natalini et al., 2019).

7.5.1.4 Cross-cutting and inter-dependencies (ID4)

Violent conflict arises from cascading risks between multiple interacting elements including rule of

law, level of democratisation, exposure to international food prices, culture, government response,

and market response. There is also strong evidence that many factors that increase the risk of civil

war and other armed conflicts, such as poverty levels and income shocks, are sensitive to climate

change and if these impacts are not managed, there would be an indirect effect on conflict from

climate change. In addition, regions in conflict and post-conflict countries have low adaptive capacity

and may themselves be highly vulnerable to future impacts of climate change.

7 The cited study used the Inter-Sectoral Impacts Model Intercomparison Project (ISIMIP) subset of 5 CMIP5 climate models. The global warming values quoted are the multi-model means for the full CMIP5 ensemble in 2081-2100 with the RCP2.6 and RCP8.5 concentration pathways. The ISIMIP subset roughly spans the full multi-model ensemble range.



7.5.1.5 Implications of Net Zero (ID4)

The implications of a transition to Net Zero for the UK’s exposure to climate change linked conflict

risk is difficult to assess. For example, the demand for rare earth metals may increase dramatically

through the transition to higher deployment of renewable technologies. If the source of these rare

earth metals is within conflict-prone geographies, then the UK’s exposure may increase. Ting and

Seaman (2013) looked at the potential risks associated with changing demand and supplies and

concluded that this may “contribute to geopolitical tensions and instability in the East Asian region”.

However, a transition to Net Zero may also lead to a lowering of risk with a move away from

dependence on more fragile oil-exporting countries.


Globally, the increased burden of the projected shortfall of surface water availability is likely to fall

disproportionately on the poor. Within the UK, it is currently unclear how different groups may be

impacted by this risk.


Table 7.12 Magnitude score for risks to the UK from violent conflict overseas resulting from climate

change





end of century




end of century

UK Low

(Medium

confidence)

Medium

(Low

confidence)

Medium

(Low

confidence)

Medium

(Low

confidence)

High

(Low

confidence)

Climate change is recognised as an amplifier of conflict, especially within fragile states. In addition,

there is increasing evidence and quantification on the exact causal pathways for conflict emerging

when climate change impacts are felt. However, it mainly acts as an indirect influence within these

conflicts and these conflicts have an indirect impact on the UK. Therefore, this currently represents a

low risk to the UK with medium confidence (Table 7.12).

In the future climate change impacts will be larger in those fragile states and there are likely to be

different risks from transitions to Net Zero as supply chains move around the world. However, as

climate change is an amplifier of conflict it will only have an impact on conflict if those conflating

factors, such as state fragility, exist. Therefore, this complex relationship between causal factors

means that this is likely to increase to medium risk for the UK overseas interests in the future under

a 2-degree pathway although with low confidence (it may be higher or lower).





The UK provided £14.6 billion of Official Development Assistance in 2018, including to regions

undergoing conflict, with Syria being the fifth-highest recipient country. The UK Government had a

commitment to spend 50% of the Department for International Development (DfID)’s budget in

fragile states every year. While a breakdown of costs of the UK’s involvement in particular conflict

areas is not available the total UK defence budget in 2019 was £38 billion (MOD, 2020). It is sensible

to assume therefore that the UK is spending well into the millions of pounds to assist in regions

affected by conflict (high magnitude, high confidence). However, we note it is not clear what the

long-term development impacts on this spend will be as a result of the merger of DfID within the UK

Foreign & Commonwealth Office to create FCDO, and an overall reduction in our international aid

commitment in 2021, although there has already been a short term and significant reduction in UK

aid-funded research.


Overseas development aid is mostly reactive in conflict situations although investment in improving

governance structures will reduce the underlying risk of conflict if investment is effective. It is

difficult to quantify the effectiveness of this adaptation.

As noted in the CCRA2 Evidence Report, there is a potential for the UK’s overseas aid budget, for

example, the Conflict, Stability and Security Fund (CSSF), to cause a shift toward more short-term

interventions (rapid response), as well as interventions more aligned with UK interests (ICAI, 2019),

which could be at the expense of upstream prevention (SaferWorld, 2014). Current policies do not

specify the optimal proportion of expenditure in long-term aid (including sustainable development

and disaster risk reduction) versus humanitarian aid and the trend away from longer-term

development outcomes to short-termism, including national interests rather than wider

development interests, appears to be growing (Gulrajani and Calleja, 2019) and continues beyond

CCRA2. There is a gap in understanding the impact on this trend in development and state fragility

expenditures in exacerbating geopolitical risks.

In addition, while the Ministry of Defence includes climate change within its strategic threats'

considerations (MOD, 2018; HM Government, 2015), there is a lack of evidence of a systematic

review of impacts of all UK investments and partnerships across government in tackling geopolitical

issues. For example, there is no systematic analysis of the UK’s approach to complying with the

Sendai Framework for Disaster Risk Reduction.

With climate change being an amplifier of conflict rather than a direct cause it is our view that this

risk is only partially managed (with low confidence) with some worrying indications that

interventions may become more short-term and less systematic.




Table 7.13 Adaptation score for risks to the UK from violent conflict overseas resulting from climate

change


UK Partially

(Low confidence)



As noted by Smith et al. (2018a), in the context of risks to US international assistance, “the impacts

of climate change, variability, and extreme events can slow or reverse social and economic progress

in developing countries, thus undermining international aid and investments made by the United

States and increasing the need for humanitarian assistance and disaster relief.” A similar observation

could be made regarding the overseas aid budget of the UK.

For mitigation of water-based conflict, more cooperative behaviour is associated with transboundary

agreements (Munia et al., 2016) when participating countries are governed by treaties with water

allocation mechanisms that allow flexibility and specificity. Therefore, there may also be

opportunities to reduce current tensions through appropriately deployed international agreements

on shared resources including access to water (where rivers run between countries) or new

opportunities in areas such as the Arctic.

The evidence for additional benefits from proactive engagement in reducing local tensions in regions

more prone to conflict through infrastructure investment and setting up local or transboundary

agreements which can underpin more cooperative behaviour between different stakeholders is

increasing (for example, Munia et al., 2016). The main cost associated with this is a more strategic

and systems approach to investing international aid aligned to climate change adaptation associated

with conflict prevention.


Table 7.14 Urgency score for risks to the UK from violent conflict overseas resulting from climate

change (ID4)


Confidence Medium



The urgency score for this risk is for more action (Table 7.14). With increasing evidence of climate

change acting as an amplifier of conflict since CCRA2, the impact of climate change increasing

around the world, and several regions experiencing prolonged conflict and rising geopolitical

tensions, the costs of inaction on adaptation is now clearer than it was in CCRA2 and therefore our

view is that more action in the next five years is justified.


The risk to the UK from international violent conflict resulting from climate change impact overseas

could increase towards the longer-term. As noted above the trend of overseas development aid

being increasingly used for shorter-term national (donor country) interest goals could see the

undermining of longer-term development goals which would reduce the likelihood of overseas

conflict.

7.6 Risks to international law and governance from climate change that

will impact the UK (ID5)

International law provides a framework to mitigate climate risks that offers positive prospects but is

highly dependent on states being willing to design ambitious climate plans and cooperate

multilaterally. Climate impacts overseas have the potential to threaten and weaken international law

and governance but quantifying their effects on UK’s interests and values is difficult. Risks to

international law and governance from climate change include human rights violations, contestation

of well-established international rules, risks of sovereign defaults in emerging economies, and new

legal challenges arising from low-carbon policies. Such risks have the potential to threaten the UK’s

economic, diplomatic and military interests and challenge its foreign policy of strengthening the

rules-based international system and promoting human rights. Risks to international law and

governance are amplified politically by a weakened multilateral system and states acting in their self-

interest in a context of resource scarcity as well as socially by popular discontents towards

globalisation. Given the systemic nature of risks to international law and governance, the UK’s

adaptation plan needs to be wide-ranging and include a long-term strategy to better engage with

the international rule of law, its obligations and courts, in order to be seen as a credible international

leader able to stabilise and influence the international system to ensure that its interests are

preserved and foster prosperity and peace.


7.6.1.1 Current risk (ID5)

The evidence from the literature on climate risks and international law is that the international legal

system is ill-adapted to respond comprehensively to the climate crisis, but no risk assessment has

been carried out regarding how this situation impacts, or will impact, the UK.



At present, current risks to the UK from international law and governance principally concern

climate mitigation measures. Indeed, the transition to a low-carbon economy poses significant

challenges for international trade and investment rules that are not necessarily aligned with climate

priorities. As a result, unresolved legal issues might frustrate the implementation of climate

mitigation measures in the UK. Major uncertainties remain regarding the legality of climate-friendly

energy subsidies (Espa and Marin Duran, 2018), low-carbon standards on imported goods, or carbon

border adjustment mechanisms under World Trade Organisation law (Green, 2005; Condon, 2009;

Veel, 2009; Espa and Marin Durán, 2018; Porterfield, 2019). This could restrain the UK’s ability to

design a zero-carbon import policy that could reduce the significant portion of its greenhouse gases

that comes from imported goods (WWF, 2020).

Similarly, balancing the rights of foreign investors with the right of states to regulate for the public

interest remains a difficult task under international investment law. The risks that international

investment treaties might make governments reluctant to adopt climate mitigation policies

('regulatory chill') are heavily debated (Schill, 2007, Tienhaara, 2018). The regime is tainted with

instability regarding what gives rise to an investor’s legitimate expectations that a regulatory

framework will remain unchanged. On the one hand, bans on fossil fuel exploration and production

can be challenged by foreign investors (Di Bella, 2018) and, on the other hand, reductions in planned

subsidies allocated to renewable energy projects have led to multiple arbitration cases against

countries such as Spain, Italy and the Czech Republic in the past years (Faccio, 2020; Noilhac, 2020;

Zannoni, 2020). Such litigation risks could affect the UK’s Net Zero strategy by impacting the design

of government incentive programmes in the renewable energy sector. UK investors abroad might

also be affected, either positively or negatively, by rapid regulatory changes in their host countries,

especially if climate and economic priorities are reviewed post-pandemic.

Direct climate impacts overseas do not currently destabilise international law and governance in

such a way as to pose risks to the UK. However, a major source of concern relates to the fact that

the multilateral system is currently under threat, which could amplify risks to the UK from

international law and governance. It is widely acknowledged that the global order is in the process of

being transformed and reshaped, as regional, non-Western, powers rise (Zakaria, 2012; Ikenberry,

2015; House of Lords Select Committee, 2018). In addition, discontent with the effects of

globalisation has led to a crisis of multilateralism, perceived to be undemocratic and technocratic

and unable to respond to today’s global challenges. A recent wave of withdrawals from international

treaties and institutions (Crawford, 2018), as well as a global backlash against human rights (OHCHR,

2018), have weakened the international legal system (Brunnée, 2018; Posner, 2017; Ulrich and

Ziemele, 2019; Pellet, 2018; Brunnée and Toope, 2017). This situation raises particular concern for

international climate governance that relies heavily on collective action, as evidenced when the US,

under the Trump administration, announced its (now reversed) withdrawal from the Paris

Agreement.

Additionally, risks to international law and governance are socially amplified by popular

contestation. The perception that the transition risk to Net Zero is economically harmful, not socially

supported, or historically unfair could strengthen popular discontent (Sovacool et al., 2019).

Conversely, the polarisation of our societies over climate action means that other segments of the

population will lament the lack of ambition of international law. For instance, in recent years,



popular contestation has grown against mega-regional agreements, such as the Comprehensive

Economic and Trade Agreement, perceived to be an enabler of the climate crisis (Riekmann, 2017),

and could become an important obstacle for the UK’s trade policy post-EU Exit.

7.6.1.2 Future risk (ID5)

In the future, direct climate impacts overseas have the potential to threaten existing international

rules and impact the UK’s national interests and/or values. It is difficult to quantify the direct effects

between a strong international legal system and the preservation and promotion of the UK’s

interests, but generally speaking, it can be considered that the UK benefits positively from a peaceful

and stable world based on the rule of law that facilitates economic prosperity and social

development.

Greater ethnic tensions, potentially driven by climate-related people movement or land degradation,

may give rise to increasing violations of human rights laws worldwide. UN Special Rapporteur Alston

noted in a 2019 report that climate change represents a significant threat to democracy and civil and

political rights, as states might respond to climate change by ‘augmenting government powers and

circumscribing some rights’ and as ‘the uncertainty and insecurity in which many populations will be

living, combined with large-scale movements of people both internally and across borders, will pose

immense and unprecedented challenges to governance’ (UN Human Rights Council, 2019). Such

violations undermine the UK’s foreign policy objective of human rights promotion and could have

direct effects on the UK by resulting in climate-related increased international mobility (see ID3) and

by impacting on the need for military deployment for peacekeeping purposes.

Moreover, climate risks could lead to contestation or re-interpretation of well-established

international treaties that are, in their current form, inadequate to respond to climate impacts. For

instance, sea-level rise could call into question well-established rules on maritime boundaries

delimitation (Caron, 2014). States could be tempted to take advantage of such uncertainty, which

could spark tensions between states in relation to boundary delimitation, access to natural

resources, and navigation rights. Such contestations will represent direct risks to the UK’s military,

diplomatic, and trade interests as a major maritime power. It could have direct impacts on British

Overseas Territories by aggravating tensions in territories that are disputed or by increasing pressure

on their rich marine biodiversity resources.

Another example of how climate risks could weaken the existing consensus on which international

treaties operate can be found in the ongoing work of the UNFCCC on ‘loss and damage’ that parties

acknowledge does not form the basis to recognize liability or compensation rights (Decision 1/CP.21,

para 51). However, if talks were to break down or result in unsatisfactory outcomes, traction might

grow for compensation to the most vulnerable countries (Bodansky, 2017). As a historical emitter,

the UK could face risks of disputes that would represent a reputational risk for the country.

In addition, evidence is emerging that climate impacts pose a systemic risk to national economies

due to the immediate and longer-term shocks of climate-related events and public spending for

reconstruction (Mrsnik et al., 2015) and could potentially increase the risk of sovereign defaults in

emerging economies (Cevik and Jalles, 2020; Mallucci, 2020). This could have significant implications



for the UK, financially because the UK is a significant investor and potentially geopolitically in case of

regional destabilisation around the failed state.

An important pathway of transmission of international climate risks and impacts to the UK is through

states acting in their narrow self-interest, which could have a destabilising effect on international

peace and international trade routes. This could, in turn, undermine the UK’s economic interests and

make its commitment to protecting the rule of law, democracy, and human rights worldwide more

difficult to implement. The CCRA2 Evidence Report Chapter 7 warned that increased tensions on

resources, exacerbated by climate change, ‘could lead to an increase of state-led enterprise,

resource protectionism and strategic bilateral agreements that secure long-term access to resources

at the expense of the global markets upon which UK businesses rely’ (Challinor et al., 2016; p.46) –

and this observation remains valid. Pressures from competition over scarce resources or climate

migrations are likely to drive political tensions internationally and lead to the further rise of inward-

looking nationalism and populism. The impacts of climate change could be far-reaching for

transboundary water resources, in particular in some of the world’s most important drainage basins,

such as the Rhine, Danube, Mekong, Nile, or Indus. Risks to international water law identified in the

CCRA2 Evidence Report on the basis that freshwater resources are likely to be scarcer remain high.

Indeed, while international water law and institutions offer reliable foundations to ensure that

international watercourses are used in a fair, equitable, and sustainable manner (Vinca et al., 2020),

climate change impacts could result in tensions between neighbouring states (Cooley and Gleick,

2011; Jafroudi, 2018). Similarly, as demand for fish stocks and minerals rises, pressure on the

Antarctic Treaty and its protocols that regulate international relations on the continent and support

scientific activities as well as environmental protection could increase (Nature, 2018; Patrick, 2019).

Risks arising from resource scarcity could also be socially amplified: for instance, as fishing stocks

migrate and diminish, international fisheries agreements, such as EU Fisheries Partnership

Agreements with developing states, might become contested and could impact both the UK’s

fisheries partnerships for food security and prices (Brandt and Kronbak, 2010; Mendenhall et al.,

2020).


Reputational risks are important in relation to this risk, and therefore a long-term perspective is

needed to mitigate them. COP 26 is an opportunity to lock in positive international collaborations

and partially mitigate future risks.

7.6 1.4 Cross cutting risks and Inter-dependencies (ID5)

This risk is closely intertwined with other risks presented here, including ID3 on international human

mobility, ID4 on violent conflict overseas, and ID6/7 on international trade routes. International law

and governance offers means of mitigating some aspects of these risks and there are therefore co-

benefits for ID5 in the management of these other risks.




The current lack of legal clarity regarding the compatibility of climate measures and trade and

investment rules could have detrimental impacts on the UK’s Net Zero strategy, in particular, if the

legality of certain policy levers, such as those seeking to address carbon leakage or aiming to attract

foreign green investors, were to be challenged. The UK’s Net Zero strategy might need to be brought

in line with any future legal clarifications or developments to ensure that the design of climate

mitigation policies measures is consistent with international obligations.


It is currently unclear how different groups may be impacted by this risk.


Table 7.15 Magnitude score for risks to international law and governance from climate change that

will impact the UK (ID5)

Country Present Day 2050s

2080s




end of century




end of century

UK Low

(Medium

confidence)

Medium

(Low

confidence)

High

(Low

confidence)

High

(Low

confidence)

High

(Low

confidence)

All in all, at present, the impacts of climate risks on international law have had limited economic or

social consequences for the UK. However, in the long-term, they are likely to grow, in particular if

political and social contestation grows and if states are unable to cooperate to develop adequate

international legal frameworks. Quantifying the economic impacts of disruptions to the international

rule of law is extremely difficult because the consequences can vary significantly in terms of nature

and magnitude and risks are transmitted in a non-linear manner across multiple impacts. A

destabilised world order, where, for instance, tensions over natural resources are high and

navigational rights disputed, could potentially cost the UK in the order of £ hundreds of millions in

damages or foregone opportunities per year. An increase in global temperatures and/or a delay in

meeting these temperature objectives is likely to increase the magnitude of the impacts because it

could further destabilise international relations; however, it is not necessary because it is also

dependent on a combination of other, non-climate related factors. There is, therefore, low

confidence in future magnitude scores. Indeed, the international legal system is very reliant on

changing political circumstances that make predicting the future level of risk difficult. The extent to

which climate risks and their transmission pathways will be attenuated depends on the willingness



of governments to cooperate internationally and the ability of existing international rules and

institutions to diffuse any possible tensions.


7.6.2.1 Effect of current adaptation policy and commitments on current and future risk (ID5)

The international legal system, as noted in the CCRA2 Evidence Report, offers significant

opportunities to address the drivers of risks arising from climate change, inter alia thanks to the Paris

Agreement and the UN Sustainable Development Goals, both adopted in 2015 and considered to

represent a transformative roadmap towards a more sustainable world for the decades to come. It

is, however, widely acknowledged that these regimes have inherent limitations because their

bottom-up approach leaves implementation to the discretion of states with little international

oversight (Bodansky, 2016). The UK has the potential as a climate leader to influence the

international climate regime and hence limit global climate risks in the first place. Indeed, the UK is

widely recognised to be a climate leader, ambitious domestically – the 2008 Climate Change Act is

largely considered to be a landmark piece of climate legislation that is used as a model worldwide

(Norton, 2018) – and internationally – it was under the UK’s Presidency that the UN Security Council

discussed for the first time the interlinkages between climate change and international peace and

security in 2007 (United Nations Security Council, 2007). The UK considers tackling climate change

and biodiversity loss to be its ‘number one international priority’ (HM Government, 2021). COP 26,

co-organised and hosted by the UK, is an opportunity to lead on the design of new international

collaborative initiatives, such as the public-private Coalition for climate-resilient investment, a COP

26 flagship initiative set up in 2019. The legacy of the COP, either positive or negative, is likely to

have a significant impact on the reputation of the UK in the environmental field in the medium-term

future. In this context, domestic delivery on environmental issues including climate change

adaptation, which has lagged in progress (CCC, 2019) will be critical to reinforce the UK’s credibility

and legitimacy as an environmental leader and to showcase the UK’s leadership.


Given the systemic nature of risks to international law and governance, the UK’s adaptation plan for

this risk needs to be wide-ranging and cannot cover only climate-specific diplomacy. Indeed, our

expert opinion is that the UK’s diplomatic action outside of the climate realm could significantly

impact its ability to attenuate risks to international law and governance from climate change. In this

context, our view is that perceptions that the UK’s influence on the international scene has

diminished in recent years need to be addressed. Its withdrawal from the European Union has been

interpreted to symbolise a wider retreat from multilateral cooperation and the UK risks becoming

isolated internationally without the same level of support from its European partners (House of

Commons Foreign Affairs Committee 2017). In addition, the UN Security Council, where the UK holds

a permanent seat, has lost its credibility as it has become paralysed in the context of disagreements

between P5 members in relation inter alia to Syria (Butchard, 2020). Conversely, the UN General

Assembly, where the UK lacks support and has suffered unexpected defeats in the past few years

(e.g., in relation to the Chagos advisory opinion and the International Court of Justice (ICJ) election,

both discussed below), is becoming more assertive (UK Government, 2018).



It is arguable that the image of the UK as an international law champion has in recent years been

eroded (e.g., Philippe Sands in The Times, 2020). The Government’s admission in September 2020, in

the context of EU Exit, that passing the Internal Market Bill would ‘break international law’ if enacted

(House of Commons, 2020) received significant media coverage worldwide. Another source of

concern has been the UK’s rejection of the conclusions of the ICJ’s advisory opinion on the Legal

Consequences of the Separation of the Chagos Archipelago from Mauritius in 1965, published in

February 2019 (followed by a UN General Assembly vote in November 2019), calling upon the UK to

‘bring an end to its administration of the Chagos Archipelago as rapidly as possible’ (International

Court of Justice, 2019). Maintaining the UK’s reputation as an upholder of international law is

important in the context of climate change to ensure that the UK remains a credible voice when

defending a rules-based international order, in the event, for instance, that states would start

disputing established law of the sea rights and duties.

The UK’s relative disengagement with the ICJ, the principal judicial organ of the United Nations,

accelerated by the fact that it unexpectedly lost its judge in the 2017 elections - a first for a

permanent member of the UN Security Council (House of Commons, 2018) - is potentially

problematic because international dispute settlement is likely to play an increasingly important role

in the context of climate change (Verheyen and Zengerling, 2016). On the one hand, inter-state

tensions between those most responsible for climate change and those most affected might

increase and the UK, as a historical emitter, needs to ensure that it is best positioned to respond

legally to such disputes; on the other hand, the UK should also preserve its rights to bring

international claims against other states in breach of their international climate commitments.


Table 7.16 Adaptation score for risk to international law and governance from climate change that

will impact the UK


UK

Partially

(Medium confidence)

The risk is only partially managed (medium confidence). The UK is a proactive leader in the field of

international climate change governance and this role is likely to be strengthened as it hosts COP 26

towards the end of 2021. However, our view is that further action will be needed to overcome any

reputational risks associated with a perceived disengagement of the country with multilateralism

and international law.





Diplomacy is the main means of adaptation in relation to this risk. Further engagement with

multilateral processes and institutions would have benefits for ensuring that the UK preserves its

interests and strengthens its image as a respected multilateral player. This could include engaging

constructively with a multiplicity of processes and initiatives in the context of climate change, such

as inter alia by supporting the work of the International Law Commission on sea-level rise in relation

to international law started in 2019, the work of the UNFCCC on loss and damage (including its Task

Force on Displacement) and the on-going modernisation of the Energy Charter Treaty. There would

also be benefits from producing a clear plan to meet the challenges posed by a shift in UK

relationships with traditional allies and changing dynamics at the UN, to coordinate its activities with

the EU, and to build new partnerships with inter alia the Commonwealth. Whilst the short-term

benefit of these adaptations is small, it rises on longer timescales, commensurate with the increase

in risk magnitude. Planning is needed now in order to enable adaptation in the future.


Table 7.17 Urgency score for risks to international law and governance from climate change that will

impact the UK


Confidence Medium

The urgency score for this risk is for more action needed (Table 7.17). This score has been given

because the evidence reviewed above suggests that while current risks have been identified as low,

they are likely to rise in the future and their successful mitigation depends on factors that require

constant engagement and long-term planning. These include building the UK’s reputation as a

supporter of a strong international order, ensuring the stability and resilience of the international

legal system, and negotiating the adoption of new international rules protecting the UK’s interests.

Evidence for the urgency of dealing with this risk has increased since CCRA2 had identified

international law and governance as an area for further investigation. The change in assessment

between CCRA2 and CCRA3 is not directly climate-related: assessment of the underlying climate risks

has not changed significantly since CCRA2, but the changes in ongoing actions that support

adaptation, as outlined above, leave a more significant adaptation gap in our view. Given the

opportunities associated with building new foundations for the UK’s engagement with the

international order post-Brexit and with strengthening international partnerships post-COP 26, the

next five years offer a window of opportunity to reduce this adaptation gap.




It is at present difficult to quantify the exact implications for the UK of the impacts of climate risks on

international law and governance because they are highly dependent on a complex combination of

factors. However, the literature is clear that international law is weakened by the climate crisis as it

struggles to respond to a challenge that questions some of its foundational concepts, such as that of

statehood or territory. Given that international peace and security is dependent upon a well-

established international legal system, risks of disillusionment and push back against the multilateral

system are concerning. It is certain that engagement with international law needs to follow a long-

term strategy in order to build the trust and credibility needed when the international legal system is

destabilised and threatens the UK’s interests and values. Such a strategy is important to build trust

and the legitimacy of ‘global Britain’.

7.7 Opportunities from climate change (including Arctic sea ice melt) for international trade routes (ID6) The opportunities from climate change to extend international trade routes are currently limited to

potential benefits from increased access to the Arctic and provision of maritime services. However,

associated risks, some military in nature, coupled with the small magnitude of opportunity, lead to a

current magnitude designation of Low (High confidence). Longer-term, as warming continues, this

rises to High (Low confidence). There is no clear need for action in the next five years on this issue,

since:

i. The opportunities relating to sea passages opening up are being closely monitored by a

range of commercial operators in maritime shipping and ancillary industries.

ii. The UK Government is also involved in International Maritime Organisation activities

related to the regulation of potential activities.

7.7.1 Current and future level opportunity (ID6) 7.7.1.1 Current Opportunity (ID6) CCRA2 identified that as a result of melting sea ice the opening of Arctic trade routes presents an

opportunity for increased trade (Challinor et al., 2016). The present analysis confirms that the UK

has some capacity to benefit from increased access to the Arctic as a consequence of climate

change. It could still benefit from increased tourism and the provision of maritime services in

addition to trade.

Northern Sea Route (NSR) traffic has continued to grow since 2016 and is increasingly year-round.

Russian officials claim that the arrival of new icebreakers will mean year-round navigation will be

possible in the 2020s (Sevastyanov and Kravchuk, 2020). The principal driver is the massive

development of Liquefied Natural Gas (LNG) projects in the Russian Arctic, originally in terms of the

delivery of construction materials and supplies, and latterly through the export of Arctic LNG to



Europe (including Thamesport in the UK) and Asia. These LNG projects have proceeded ahead of

schedule. The evacuation of coal from the Russian Arctic is also a driver of increased trade volumes

along the NSR. The Russian government is continuing to invest in developing the route (Didenko and

Cherenkov, 2018), with President Putin decreeing in 2018 that traffic should expand to 80 million

tons by 2024 (previously not envisaged before 2030). Russia is committed to developing the NSR.

However, state support potentially distorts the commercial benefits/risks, and it is unclear whether

similar growth could be envisaged without extensive investment from the Russian government.

In terms of transit shipping, China’s state-owned COSCO is leading interest. It has continued to

transit Arctic routes every year since 2013, with a record 14 transits of the NSR planned for 2019

(CHNL Information Office, 2019). COSCO has previously used the route to deliver wind turbine

equipment and parts to the UK. In 2018, the Chinese government further announced its intention to

work with Arctic partners to jointly build a ‘Polar Silk Road’ through ‘developing Arctic shipping

routes’, suggesting that there will continue to be state backing for COSCO to actively develop viable

commercial routes through the Arctic (The State Council of the People's Republic of China, 2018).

Danish-shipper Maersk sent the first-ever container ship through the NSR in 2018. The ship, capable

of carrying nearly 3,600 containers, was part of a new fleet of seven ice class 1A feeder container

ships designed to operate in the Baltic Sea. Nevertheless, it experienced many challenges, having to

deviate from its planned route and required assistance from a Russian nuclear icebreaker. In 2019,

Maersk announced that it was now working with Russia’s nuclear icebreaker operator Atomflot to

explore the possibility of offering a joint seasonal service to meet the demand for transport between

the Far East and West Russia. Meanwhile, other major ship operators (Teekay, MOL) have also

started to gain experience operating along the NSR after assisting with LNG shipments. While transit

numbers remain very low compared to Suez/Panama, the likelihood of a market emerging for

specialized and ad-hoc container shipping is increasing. Several other shippers have said they will not

use the route (Seatrade Maritime News, 2020).

In 2016, the IMO adopted the Polar Code, which subsequently came into force in 2017. The Polar

Code makes mandatory requirements relating to the operation of ships in polar waters,that include

strict regulations around ship design, construction, and equipment; operational and training

concerns; search and rescue; and the protection of the environment and ecosystems of the polar

regions (IMO, 2017). Meanwhile, the IMO is also continuing efforts- that began in 2011- towards

banning Heavy Fuel Oil in the Arctic in the 2020s. HFO is the most consumed marine fuel in the

region. Russia which has not yet agreed to the ban has signalled it might be willing to transition to

LNG-powered vessels and is already operating the first of four large capacity LNG-powered oil

carriers. Switching from HFO to lighter fuels such as LNG is likely to slow the development of Arctic

shipping so a ban in the 2020s could further delay the maritime development of the Arctic.

The passage of the Crystal Serenity through the Northwest Passage in 2016 attracted much

international interest as a tourist venture. The luxury cruise liner with over 1,000 people aboard

completed the voyage in 32 days. A second voyage was undertaken in 2017. However, Crystal cruises

have since announced they are unlikely to do so again with a large cruise ship (the company has

recently invested in a small polar-class mega-yacht). The voyages through the NWP attracted

significant criticism from environmentalists and local communities owing to the environmental risks



generated; and poor emergency response and rescue capabilities present a risk to those undertaking

the voyage (Qian et al., 2020).

7.7.1.2 Future Opportunity (ID6) The construction and launch of the RSS Sir David Attenborough is a notable success story for the UK

maritime sector. The Attenborough is arguably the most significant ship to be built in the UK for

several decades and provided an example of best practice in terms of how multiple UK-based firms

can work together to deliver a world-class build. The UK maritime sector (including the maritime

service sector in the City of London) is now well-placed to use the expertise it has developed to

advise on and lead the rest of the world on how to implement the Polar Code into new build designs.

It has also restored its own capacity to build world-leading, cutting-edge, ice-capable ships. The

success of the Sir David Attenborough signals that there is potential across the UK maritime sector

(design, construction, services) to take advantage of growing demand for ice-capable ships to ply

emerging Arctic trade routes.

Growing commercial interest in Arctic trade routes also brings with it growing interest in military

opportunities and risks. For example, The US is in the process of strengthening its commitment to

securing emerging ‘strategic corridors’ in the Arctic (Department of Defence, 2019), which are

expected to enable the flow of forces globally as access increases. Meanwhile, in 2018, the UK

Ministry of Defence announced that it would put ‘the Arctic and High North central to the security of

the United Kingdom’ through the development of a new defence strategy for the region, although

this has yet to be published (Depledge et al., 2019). The military requirement to improve situational

awareness in the region will increase demand for innovation and ultimately cheaper technological

solutions, which could create commercial opportunities for the UK. The potential for a greater

deployment into Arctic regions has implications for the equipment and training needs of the UK’s

military (IMCCS, 2020).

There is an awareness, particularly in the Scottish Highlands and Islands of the potential for port

development to serve opportunities relating to sea passages opening up. There is reference to the

North East Passage and Scotland's strategic location in this regard in Scottish Government (2014)

National Planning Framework 3 (p27 and 54). This issue may present opportunities for Northern

Ireland as well.

7.7.1.3 Lock-in and thresholds (ID6) The uncertain pace of sea routes opening – both in any given year, but more generally over longer

time periods - may result in sunken assets through the premature investment of ships designed for

arctic voyages, as well as premature investment in port development to serve Arctic shipping. The

loss of summer ice is a threshold effect that gives rise to the opportunity documented here.

7.7.1.4 Cross-cutting risks and inter-dependencies (ID6) Increased shipping from the north links partially to Risk N16: Risks to marine species and habitats

from pests, pathogens and invasive species' (Chapter 3: Berry and Brown, 2021) as more Arctic

travel may lead to risks in the UK's waters.



7.7.1.5 Implications for Net Zero (ID6) The implications for Net Zero related to this risk are unclear. 7.7.1.6 Inequalities (ID6) It is currently unclear how different groups may be impacted by this risk. 7.7.1.7 Magnitude Score (ID6)

Table 7.18 Magnitude scores for opportunities from climate change (including Arctic ice melt) on

international trade routes





end of century




end of century

UK Low

(High

confidence)

High

(Low

confidence)

High

(Low

confidence)

High

(Low

confidence)

High

(Low

confidence)

The small number of opportunities identified above, coupled with the associated risks, lead to a

current magnitude designation of Low (High confidence). Longer-term, as warming continues, this

rises to High (Low confidence). The low confidence arises from the geopolitical and social issues that

may constrain, or allow, opportunities to be realised.



The opportunities relating to sea passages opening up are being closely monitored – and where

appropriate, acted on - by a range of commercial operators in maritime shipping and ancillary

industries. The UK Government is also involved in International Maritime Organisation (IMO)

activities related to the regulation of potential activities.


Our view is that current adaptation measures are sufficient to manage this opportunity. The CCRA2

Evidence Report identified that as a result of melting sea ice, the opening of Arctic trade routes

presents an opportunity for increased trade. The present analysis confirms that the UK has some



capacity to benefit from increased access to the Arctic as a consequence of climate change and that

actions are taking place to consider this.

The UK could still also benefit from increased tourism and the provision of maritime services. As

noted above, the UK maritime sector has also demonstrated that it can design and build a world-

class, ice-capable ship (the RSS Sir David Attenborough) that meets the latest regulatory

requirements. However, as noted above, there are safety and environmental risks involved, and so

insurers and underwriters remain cautious about providing services to Arctic shipping.


Table 7.19 Adaptation score for opportunities from climate change (including Arctic ice melt) on


Are the opportunities going to be managed in the future?

UK

Yes

(High confidence)



There is some projected analysis (e.g., Bekkers et al., 2016) which indicates that opportunities from

climate change (including Arctic ice melt) on international trade routes could be large including from

the economic effects of trade that is facilitated by a reduction in transport distance between

suppliers and consumers. The effect on UK GDP was estimated to be equivalent to an annual

increase of 0.24%, although this was associated with year-round (not just summer) transport access.

There are also potential tourism opportunities that increased access to the Arctic allows, and

associated port development in locations that facilitate these trade and tourism opportunities.

While these would need to be seen against potentially very large negative impacts from an ice-free

Arctic for other reasons (e.g., loss of or damage to arctic ecosystems, potential higher global

warming levels, impacts on European weather, etc.) they do indicate potential economic benefits.

There is an issue whether these benefits will be fully realised by non-government adaptation alone,

and it is likely that higher benefits could be achieved for the UK (as compared to competitor coastal

countries) through some enabling actions from government, which would have likely low costs.




Table 7.20 Urgency score for opportunities from climate change (including Arctic ice melt) on



Confidence Medium

The urgency score for this risk is a watching brief (Table 7.20). The opportunities relating to sea

passages opening up are being closely monitored by a range of commercial operators in maritime

shipping and ancillary industries. The UK Government is also involved in International Maritime

Organisation activities related to the regulation of potential activities. There is also awareness,

particularly in the Scottish Highlands and Islands of the potential for port development to serve

these activities. This issue may present opportunities for Northern Ireland as well in terms of the

growing importance of its ports.


As the Arctic becomes increasingly ice-free, the potential for significant routing of trade – and the

opportunities for the UK – becomes more likely. However, the scale of the benefits clearly depends

on many unpredictable factors, including the possibility of deglobalisation vs further liberalisation of

trade.

7.8 Risks associated with international trade routes (ID7)

ID1 covers risks to the food supply from climate-related events overseas. Whilst the focus of that

risk is on food, where the impact of weather on production is notorious, ID7 covers all traded goods.

Climate-related disruption to non-food supply chains may occur in production facilities (e.g., floods

affecting factories or mines), but perhaps is more likely to impact supply-chain logistics, which can

be interrupted in multiple ways. COVID-19, for example, disrupted supply chains through the closure

of centralised processing facilities, the cessation of transport flows due to grounding of vehicles, lack

of labour, and delays at borders. With globalised supply chains characterised by ‘just-in-time’

delivery, high efficiency but low redundancy, they can be fragile and lack resilience to disruptions.

Given the projected (and observed) increase in disruptive events, this risk may become more potent

in future, warranting further investigation.

According to UNCTAD (2018), global trade in goods in 2017 was over $17tn, having increased by a

factor of about 1.7 over the decade. Trade in essential supplies, like food, is a small proportion of

this. According to Ercsey-Ravasz et al. (2012), in 2008 over $1tn of food was traded globally.

Teleconnections through global markets – the trade in goods, and its finance - can increase or

decrease risk. When shocks are small, stocks are large, where there is a diversity of supply

geographically, and transparency is high, trade can act to create spatial buffering and thus absorb

the shocks. However, when shocks are large, and concentrated in regions that dominate the export



markets (e.g., US dominates the maize market), and with just-in-time supply chains, the global

system becomes fragile (Puma et al., 2015), and risk can be amplified when other exporting regions

respond to production shock with restrictive export policy responses (d’Amour et al., 2016). Losses

due to disasters can spread to other sectors, causing additional indirect loss that can represent a

significant, and sometimes dominant, share of total loss (Acemoglu et al., 2012). However, the

understanding of “ripple effects” is not strong: impact cost models tend to underestimate costs of

climate extremes, and they cannot resolve all economic loss along a complex supply chain (Otto et

al., 2017).

Climate hazards can interrupt supply chains in a multitude of ways: on production (agriculture,

extractive industries, manufacturing), on transport and logistics, on labour supply, on retail and its

logistics, and on-demand. These direct impacts can interact with a range of other factors that

amplify (or buffer) impacts, as outlined in CCRA2 (Challinor et al., 2016). For example, with just-in-

time supply chains (particularly for perishable produce) political events (such as trade wars, EU Exit)

can potentially increase the magnitude of, or perception of the magnitude of, any climate-induced

shortfall, leading to an amplifying risk cascade (see also ID10).

Furthermore, impacts can be extensive in the temporal domain and lead to a whole series of knock-

on effects. For example, whilst not due to a climate impact, the 2018-2019 US-China trade

disruption arose from the US protecting its manufacturing industries. This led to China levying tariffs

on US agricultural imports, leading to significant cuts in US exports (Li et al., 2020; Inoue and Todo,

2019). This in turn led to new opportunities for agricultural expansion as other countries strove to

fill the gap. This may have played a part in incentivising Brazil’s expansion into forests (Fuchs et al.,

2019), exacerbating climate change through emissions associated with land conversion, and thus

increasing climate hazards which will impact further on supply chain risks.


7.8.1.1 Current Risk (ID7)

Risks to food trade are highlighted in ID1, and; they are primarily couched around climate-change

related production shocks and market responses. There is, as has been illustrated by COVID-19, the

potential for much wider disruption in supply chains coming into the UK from overseas, not simply

associated with the impacts of weather on production. These risks are more articulated around

supply-chain logistics and the potential for transport to be affected. Such impacts are various and

include impacts on inland logistics (e.g., extreme heat buckling railway tracks for key routes; drought

affecting river levels, e.g., in the Mississippi transport network; or storm damage to key ports of

transport routes). COVID-19 gives insight into the resilience of supply chains following major

disruption (arising from lack of labour for transport, lack of airfreight, or border closures). However,

its impacts are largely not yet in the literature on which to draw conclusions.

Trade is also not simply a matter of a country producing a product and exporting it to a country that

uses it. For many commodities, perhaps especially food and electronic/automotive consumer goods,

products are themselves manufactured from multiple supply chains before being sold. A feature of

modern economies is therefore the reliance on long, complex, multinational supply chains (Cepeda-



López et al., 2019). Increasing efficiency means supply chains are lean: with few local stocks being

held, rather the expectation of just-in-time deliveries of goods. This increasingly leads to a

systematic fragility (Puma et al., 2015) and therefore systematic risk. For example, the impacts of

the Fukushima disaster were felt globally due to the constriction of components for other products

manufactured in Japan, and the early-felt global issues arising from COVID-19’s China lockdown

included a restriction on the flow of many products originating from China (such as medical supplies

and PPE – personal protective equipment for the medical profession).

Box 7.3 Case Study Thailand Floods

Flooding in Thailand in 2011 had a severe cost to human life, infrastructure and the global supply

chain, particularly the movement of goods and market transmission pathway. The magnitude of

the flooding resulted from the co-occurrence of multiple anomalous events, and was attributed to

human induced climate change, with an increasing probability of occurrence of an event of the

same magnitude under future climate change (Promchote et al., 2016). The floods in Thailand in

2011 provide a case study example of impact chains in the electronics industry following a low

likelihood high impact flooding event internationally, identifying several vulnerabilities within the

current production and distribution system, and risks transmitted to the UK. Affected supply

chains included car manufacture (Honda Co, Toyota Motor Co), computer manufacture (Lenovo

Group Ltd, Samsung Electronics, ACER Inc), impacting availability and prices of parts e.g., hard

drives, DRAM chips, and products (Ploy Ten and Chang-Ran, 2011).

The market price of computers experienced a sharp spike in October 2011, and remained high into

2012, and sales losses were reported by a large range of producers following the period, due to

the increased price of component parts, including Garner, Sony, Sharp, Panasonic, Intel, Nvida,

and AMD. The electronics and motor vehicle economies of Japan were severely affected, for

example the transport industry production was estimated as 84.0% less in June 2012 than June

2011 before the floods, and some affected industrial estates reported up to 14% business closure

by June 2012 (Haraguchi and Lall, 2015). Some international companies reported share losses in

response to the floods, for example 5% decrease by Dell and a 12% decrease by UK company Pace

(Makan and Simon, 2011).

International supply chains are most typically routed by sea, where the costs of bulk transport are

minimised (see Figure 7.3). Work by Chatham House (Wellesley et al., 2017) illustrates that trade

routes, whose infrastructure is crucial to global functioning, get funnelled through a small number of

globally important “chokepoints”, whose interdiction could have a crucial impact on global supply.

These include many routes that are associated with areas of broad geopolitically instability (e.g., the

Straits of Hormuz, Red sea routes, including Suez), which may also be destabilised by climate impacts

on those nations (e.g., areas of conflict exacerbated by climate change – see Risks ID3, ID4, and

ID10). The world’s busiest port, Shanghai, handles over 40m TEU (‘twenty foot-equivalent units’),

and more than 25% of all China’s trade flows through the port, yet flooding – in 2020 areas of the

port were closed due to the severe floods on the Yangtze - and sea-level rise is of growing threats to

its functionality.



Figure 7.3 Transport “chokepoints”: In many locations, globally important amounts of goods pass

through specific locations, this figure highlights chokepoints in agri-food trade. A climate, or other

hazard, affecting any one of these has the potential to create a supply-side availability shock.

Figure reproduced with permission from Bailey & Wellesley (2017) Chokepoints and Vulnerabilities in

Global Food Trade. Chatham House, London

Other chokepoints are areas where there are direct climate risks to the area and its infrastructure

(e.g., hurricane risk in the US’s Gulf of Mexico ports, Hurricane Katrina in 2005 created damage of

~$100m on Mississippi’s ports, and a loss of revenue of ~70%) (The Joint Committee on Performance

Evaluation and Expenditure Review, 2006). In addition, 60% of US grain trade is funnelled down the

Mississippi to these ports, via barges, and low levels of flow (associated with drying conditions) has

the further potential to limit trade flows.

As discussed in CCRA2 the potential for a squeeze on supplies to have an amplified price effect due

to panic buying on markets, coupled with policy decisions that put national interests above market

interests. In extremis, a relatively small effect on supply may amplify into a large effect on

price/availability through these mechanisms (Challinor et al., 2016).


Our view is that recognition of the potential supply chain risks has risen in the last few years, with

planning for supply chain disruption due to EU Exit on the one hand and managing supply chains

during the COVID-19 pandemic on the other. Such events are expected to become more common

due to a growing incidence of extreme weather (Chapter 1: Slingo, 2021) globally. Whilst

recognition of these issues is becoming greater, each disruptive event has in the past been treated

as exceptional (see discussion below in ID10). There remains some under-recognition that such

events are likely to become more prevalent. Hence, there is scope for more action to build

resilience into the ‘normal functioning’ of supply chains to mitigate the impact of such events. The

extent to which the market is incentivised to do this alone is uncertain at the time of writing.



Beyond the generic impact of climate change on trade, ID6 highlights opportunities that occur with

the opening up of the Northern Sea Routes with Arctic melting. Although commercial activity

remains limited, interest in potential trade routes is producing a degree of geopolitical risk that may

be exacerbated in the future. Russia has tightened the rules it applies to users of the NSR and some

fear it is pushing for de facto control of all shipping through the NSR and adjacent Arctic waters

(Moe, 2020). Russia is also building/upgrading a network of military bases along the NSR (Boulègue,

2019). The United States has responded in turn by threatening to conduct Freedom of Navigation

Operations through Russian and Canadian Arctic waters (The Wall Street Journal, 2019). In May

2020, UK and US warships approached Russian Arctic waters for the first time since the Cold War. In

September 2020, they did so again (along with Norwegian and Danish forces), to signal their

determination to uphold freedom of navigation above the Arctic Circle (Royal Navy, 2020) in the face

of Russian attempts to tighten its legal and military control of the region. More generally, increased

military exercise activity and missile-testing have the potential to cause disruption to maritime

activity by forcing sea traffic to divert. The potential for further nuclearization of Russian naval forces

to assist with Arctic maritime operations also presents challenges (Goodman and Kertysova 2020).

Another risk is that rising great power competition will undermine trust and lead to increased

suspicion that maritime surveillance and commercial operations along Arctic trade routes are a front

for military interests, raising the potential for unintended armed conflict. Washington has already

warned that expanding Chinese commercial activity could pave the way for a permanent Chinese

security presence in the region longer-term (United States Department of State, 2019). Meanwhile,

several NATO countries including the UK are increasingly mindful of the potential for Russia to use

military assets stationed in Arctic bases to threaten maritime security and sea lines of

communication in the North Atlantic.


As per ID1, post-EU-Exit trade deals may potentially create lock-ins through the reliance on imports

from countries and trade-routes that are more prone to climate disruption than current trade (I.e.,

the significant volumes from Europe via the Channel Tunnel, replaced with imports from the North

Atlantic region and Australasia).

7.8.1.4 Cross-cutting risks and Inter-dependencies (ID7)

As per ID1, there are significant inter-dependencies in the way that trade may respond to climate

hazards and the context (geopolitical, policy, market, social) within which the hazard occurs. For

example, co-incident hazards are more likely to amplify disruptions to trade networks; or climate

hazards occurring when the trading system is under other pressures (from conflicts, or trade-wars).


Net-zero commitments around the world may have some influence on trade-volumes through

impacts to reduce emissions in transport modes such as shipping. In addition, low carbon energy

systems are likely to be less trade intensive than fossil fuels and impact on trade-volumes (coal, oil,

LPG). This reduction in trade intensity of the energy sector would likely loosen the bonds (and



tensions) that bind some countries together. In the very long-term, low-cost sustainable energy will

likely reduce one of the key sources of conflict and drivers of geopolitical tension in the world, but in

the shorter-term, the transition creates risks to manage and new threats to mitigate. In addition, the

development of cleaner technologies will both change trade-flows and also the strategic importance

of minerals (for example, oil decreases in importance and cobalt – for PV – becomes more

important).

Furthermore, a focus of net-zero planning is often to increase efficiency (therefore removing

functional redundancy) and reducing resilience. Recognising this trade-off is important for managing

this risk (and others: ID1, ID10).


As per ID1, inequalities are exacerbated by trade-related disruptions, as they are associated with

changing prices and availability, for which low-income households may be most exposed. As per

ID2, opportunities (from climate change induced changes in production and trade) may, under some

circumstances lead to lower consumer prices. Lower prices may be positive or negative for low-

income households.


Table 7.21 Magnitude score for risks associated with international trade routes





end of century




end of century

UK Medium

(Low

confidence)

Medium

(Low

confidence)

High

(Low

confidence)

Medium

(Low

confidence)

High

(Low

confidence)

The emerging evidence of impacts of climate change on supply chains, coupled with the known

ongoing increase in the underlying climate hazard and changes in the international geopolitical

environment, indicates clearly that this risk will increase with time unless there are significant

attempts to ensure resilient supply chains. However, whilst the literature is growing on supply chain

disruptions due to climate change, it is less developed than for food systems (where examples of

climate’s impacts on production are available). In addition, despite the disruptions in 2020 due to

COVID-19, supply chains largely were resilient.

However, whilst the risk is likely to grow, our qualitative assessment through expert judgement is

that through the course of this century we will have to adapt to logistical interruptions to trade, and



so we rate the magnitude of risk to be medium (in terms of tens of millions of pounds lost each year)

and likely to remain so into the future. However, in the absence of sufficient adaptation to

increasing climate impacts, this risk is likely to increase to high (hundreds of millions of pounds of

damage) on a 4-degree pathway. Nonetheless, there are plausible “black swan” scenarios where

interruptions to trade may have impacts orders of magnitude greater (see Risk ID10).



We are not aware of any specific plans or strategies to manage the specific risks associated with the

topic of resilient trade systems.

More broadly, there are actions taking place to consider the opportunities for increased exports of

goods and services (see opportunity B7 in Chapter 6: Surminski, 2021).


Both EU Exit preparedness planning, and the consequences of COVID-19 have highlighted the

strengths and weaknesses of long, just-in-time, supply chains. There are also increasingly frequent

calls by global leaders8, and attitudinal surveys of citizens, that indicate recognition that climate

change, being a risk amplifier, is likely to be implicated in a growing frequency and magnitude of

global trade shocks and calls for ‘building back better’ and more resilient systems with ‘resilience

headroom’ built in (CCC 2020), post-COVID. It remains to be seen whether this recognition

translates into action. The resilience of UK imports to supply-chain disruption from overseas has not

been a strong policy consideration. The hazards and our exposure and vulnerability to this risk are

therefore thought to be increasing.

7.8.2.3 Adaptation Scores (ID7)

Table 7.22 Adaptation score for risks associated with international trade routes


UK

Partially

(Low confidence)

The economic value of trade is enormous, which suggests it is likely that markets will autonomously

invest in resilience building as impacts increase. However, our view is that it is unlikely they will

adapt pre-emptively without intervention from policy. Hence our adaptation score is “partially” with

low confidence.

8 https://www.un.org/en/observances/earth-day/message

https://www.un.org/en/observances/earth-day/message





The resilience of trade to shocks first became an area of focus following the 2007/8 and 2010/11

food-price spikes (Challinor et al., 2016; Challinor et al., 2018), and, of course, COVID-19 has

highlighted the vulnerabilities inherent in the trade in some goods. Given that shocks are likely to

increase in the future, as climate hazards from extreme events increase, there is benefit from a focus

on building further resilience. However, resilience would typically arise from four main properties:

building in redundancy (e.g., stocks), diversity (of sourcing, or substitutability), creating modularity

or distributed rather than centralised networks, and creating greater flexibility/adaptability. All of

these properties have typically been removed to increase efficiency and the leanness of supply

chains. Thus, there is a trade-off between fragility (and lower prices) and resilience (and higher

prices). As risks increase, the trade-off tips towards resilience providing better returns on average.

Resilience as a ‘design feature’ may become a greater focus for investment during post-COVID

recovery.


Table 7.23 Urgency score for risks associated with international trade routes


Confidence Low

The urgency score for this risk is for more action needed (Table 7.23). The resilience of global supply

chains, and trade-networks, has come to the fore in the last decade. If supply shocks are likely to

increase, focussing on resilience, rather than just-in-timeness, implies potential benefits that may

outweigh the costs of increasing redundancy (Tan et al., 2019) (e.g., through decentralisation) or

diversity (Kahiluoto et al., 2020; Benton, 2020). Given the opportunities associated with developing

new trading relations post-EU exit, coupled with investment in post-COVID-19 economic

reconstruction, there is a window of opportunity in the next five years to focus on resilience-

building.


Without significantly enhanced climate ambition, climate hazards are likely to increase; and with

other drivers (e.g., increasing global inequality, less adherence to rule-based cooperation), the

resilience of trading networks is likely to be increasingly tested over the decades ahead.



7.9 Risks to the UK finance sector from climate change impact overseas

(ID8)

An important pathway of transmission of international climate risks and impacts to the UK is through

finance. This is separate from the physical impacts which climate change within the UK may have on

insurance and investments which are discussed under Risk B4 in Chapter 6, Risk (Surminski, 2021).

There may be significant financial exposure to extreme weather (including wildfires) impacts in other

countries, especially through the insurance markets and investments. London operates a global

insurance market with particular products covering both direct climate change events such as

agriculture insurance as well as indirect impacts such as business interruption. Investment risks are

clear where domestic owned assets are exposed to extreme weather events in other regions or

supply chains are disrupted. This could have a significant impact on all types of asset classes and

potentially put further stress on UK pension funds. Transition risks could also appear, and alongside

physical risks when particular assets are no longer viable, lead to stranded assets.



Climate change is likely to have a significant impact on food security (ID1), trade (ID7), the ability of

governments to continue to finance public services (Jones, 2014a), and public health across various

geographies in the world (ID9). In addition, specific extreme weather events can lead to loss of life,

damage to infrastructure, and loss of critical services. The risks from climate change may also be

increased as other global risks increase (such as inequality, debt, terrorism, ecosystems collapse

amongst others) and the potential for ‘Synchronous Failure’ (Homer-Dixon et al., 2015) is seen

(ID10). There are numerous pathways from overseas climate risk to the UK, including many indirect

and direct financial impacts. These risks may represent significant financial exposure for the UK

especially through the insurance markets, banks, and investments (CFRF, 2020) as it represents a

highly networked global system (Mandel et al., 2020).

UK insurance companies may have significant exposure to climate change impacts overseas through

physical, liability, or transition risks (Rothwell et al., 2019). London operates a global insurance

market with particular products covering both direct climate change events such as agriculture

insurance as well as indirect impacts such as business interruption. Changes in morbidity and

mortality in overseas countries where UK insurance companies operate could lead to very different

risk exposures within life products. Changes to risk exposure of assets and businesses could lead to

different general insurance risks. Lloyds (2015) developed a number of scenarios to explore the

potential materiality of extreme shocks within the food system and found a number of different

scenarios that could impact the UK insurance market.

Investment risks are clear where domestic owned assets are exposed to extreme weather events in

other regions. This could have a significant impact on all types of asset classes and potentially put

further stress on UK pension funds (Dietz et al., 2016). Indeed, given the highly complex and

networked system within the finance sector, an investment risk arising in one economic sector or



institution can cascade to other institutions. Within banking, it has been shown that “the portion of

banks’ loan portfolios exposed to these sectors is comparable to banks’ capital” (Battiston et al.,

2017).

7.9.1.2 Future risk (ID8)

Over the long-term the global exposure to the UK through the finance sector is deemed to be

significant as it is highly networked and exposed to risk overseas. For example, global coastal

flooding scenarios (Mandel et al., 2020) indicate that by 2080, with global adaptation, the UK is the

second most exposed country in the world (with a loss of 0.105% of global GDP in the UK) to

financial loss. In the case of non-adaptation, the UK is the most exposed country in the world with a

loss of the equivalent of 2.447% global GDP (global GDP in 2019 was $142 trillion so this would

represent over $3 trillion in losses in that year). However, it is noted that accurately forecasting the

impact of climate change on the finance community is difficult and there is a need for a better

dialogue between finance organisations and the climate modellers to ensure reliable information, as

well as a clear understanding of the limitation of models, is achieved (Fiedler et al., 2021).

As risk increases, if it is managed through adaptation programmes, there is also the potential for an

increase in the need for insurance and therefore an opportunity for the UK insurance market to

grow (Surminski et al.,2016). Indeed, there is an estimated 1.7 billion people in developing countries

who have no access to financial services including insurance (Panda et al., 2020). Insurance can assist

countries to recover faster from disasters as well as provide expertise in risk evaluation and

exposure (Jarzabkowski et al., 2019). This expertise, especially within re-insurance companies and

catastrophe risk modelling organisations, therefore offers growth potential for the UK. However,

data on risk exposure and climate change impacts need to be as accurate as possible in order to

avoid over or under-pricing insurance products.

There are also significant opportunities internationally for investment into adaption (and mitigation)

for UK based firms. For example, UNEP estimates future adaptation needs in developing countries

could range from US$140 billion to US$300 billion by 2030 and from US$280 billion to US$500 billion

by 2050 (UNEP, 2018).


The finance system can already be considered as locked-into a global set of processes that require a

‘revolution’ (Jones et al., 2020) within the finance sector in order to respond appropriately to

climate risk. There is also a number of climate change threshold events that could have a significant

impact on the UK’s finance sector (see for example Lloyds, 2015). In addition, given the networked

nature of the financial system (Mandel et al., 2020) any large-scale negative impacts (including

bankruptcy) within an individual organisation due to mismanaged risk exposure can cascade through

the system quite rapidly and act as a threshold event itself.



7.9.1.4 Cross-cutting and Inter-dependencies (ID8)

There are multiple interacting risks that should be considered and given the finance sector is highly

networked this would allow any climate risk exposure to readily propagate through the financial

system (Battiston et al., 2017). However, evidence is low with regards to the precise mechanisms for

interaction, climate risk exposure and impact. This risk also links to risk B4, Risks to finance,

investment and insurance including access to capital for businesses.


Evidence is low regarding Net Zero transition risks although more data are being made available

through processes including the Task Force on Climate-related Financial Disclosures (TCFD) which

should improve our understanding. The changes required to achieve Net Zero can be seen as either

a risk or an opportunity for the UK finance sector.

Transition risks could appear and, alongside physical risks when particular assets are no longer

viable, lead to stranded assets (Caldecott, 2017). A recent report (Leaton and Grant, 2017) finds that

“$2.3 trillion of upstream projects – roughly a third of business as usual projects to 2025 – are

inconsistent with global commitments to limit climate change to a maximum 2˚C and rapid advances

in clean technologies.” This represents a significant risk to UK investment companies including

pension funds, although announcements in 2020 by major UK pension funds, such as the National

Employment Savings Trust (NEST) and the Universities Superannuation Scheme (USS), will see moves

towards divestment of funds away from fossil fuels (in particular coal).

The use of economic evidence such as carbon pricing and economic value of natural capital to

include environmental externalities in government policy, financial planning and business decisions

is gaining traction (Schultz et al., 2015, Guerry et al., 2015, Azqueta and Sotelsek, 2007) at different

rates of development across the world, including in some countries a “lack of political support by key

people” (Virto, 2018). Valuing the benefits from the natural environment and the costs of the

damage from human activities in monetary terms allows for them to be accounted for along with

other costs and benefits in business and financial management decision processes. However, it is not

possible to estimate the economic value of all climate change risks, biodiversity loss, and all the

benefits from nature, and therefore this approach can sometimes be seen as "ideological” (Sullivan,

2017) Therefore, economic valuation should, at least, be reported in a transparent way showing the

coverage and the gaps, and without disregarding other metrics and approaches. This way we can

avoid treating all data as equivalent in balance sheets (Sullivan & Hannis, 2017) and avoid

unintended consequences of economic analysis and evaluation of governance responses.


It is currently unclear how different groups may be impacted by this risk.




Table 7.24 Magnitude score for risk to the UK finance sector from climate change impact overseas


2080s




end of century




end of century

UK Low

(Low

confidence)

Medium

(Medium

confidence)

Medium

(Medium

confidence)

Medium

(Medium

confidence)

High

(Medium

confidence)

Finance risk, predominantly through UK exposures in investment and insurance, is well understood

and modelled under present climate conditions where the impact of those climate events follows an

expected trajectory. Therefore, the risk to the UK is currently considered low (table 7.24). However,

there are many uncertainties on the stability and interconnectedness of the finance sector which

means this risk may be considerably underestimated and therefore this is judged as low confidence.

In the future, both transition risks and climate change risks will impact a financial market which will

by necessity be very different from today (both in terms of use of financial technology, product

innovation, further integration between markets, exposure to risks in very different markets, and the

adoption of robust risk management practices above and beyond risk disclosure). In the short term

(to 2050) an ambitious pathway will increase transition risks (medium) as the finance sector adapts

to a new economic reality. Over the longer terms (to 2080) these transition risks will reduce

however climate risks without adaption remain and therefore we see risks staying as medium under

a 2-degree stabilisation pathway. A less ambitious pathway will see increased climate risk, to high,

over the short and long term, as well as more modest increases in transition risks. There is medium

confidence in this designation, given that the future of the finance market is integrated into the

overall risk of the economy although the exact linkage between climate and the economy is

uncertain.



The UK Government is showing leadership in climate finance. Over the last two to three years there

has been a significant increase in regulatory activity to encourage physical risk analysis and

disclosure across the financial sector, which is encouraging firms to internalize climate risks,

including physical risks. For example, banks and insurers in the United Kingdom are now required to

allocate responsibility for identifying and managing climate-related risks to senior management

functions (PRA, 2019). Firms should expect that disclosure will be mandated in the near future

(Treasury, 2020).



There has been an increase over the last few years in the use of responsible investment (Jones,

2019) and measures such as Environmental, Social, Governance (ESG) metrics to manage

investments. As the use of ESG measures becomes more mainstream then indirect and non-material

impacts of climate change will become more important. For example, climate change will make

more areas water-scarce, therefore reducing the viability of some areas where currently factories

are located. Manufacturers’ use of local water resources in areas of water scarcity can cause

significant competition between factories and the local population (Karnani, 2014). In response,

supply chains could shift (due to climate change) and may need to move sourcing. These shifts can

increase the social cost of UK imports if, for example, supplies are sourced from areas with poor

water governance or poor transparency and regulation. The social impact of the UK’s imports may

therefore increase, having a negative impact on ESG measures and social acceptability more

generally. However, if these changes are well managed then the link to changes in social attitude

(BEIS, 2020) can offer an opportunity to amplify a move towards more socially inclusive and climate-

friendly business models.


These actions represent a significant attempt to manage the risks associated with climate change

overseas for the finance sector. However, disclosure is only the first step, and these current plans

are only sufficient to manage the risks if action is then taken to respond to them.


Table 7.25 Adaptation score for risk to the UK finance sector from climate change impact overseas


UK

Partially

(Low confidence)


There have been significant shifts in assessing, disclosing, and analysing climate risks and more is

expected in light of expected shifts from voluntary to mandatory action driven by regulators. While it

is clear that the extent of physical risks is currently low and expected to become significant in the

longer-term, there are clear dangers in considering physical risks ‘as under control’. There are lock-

ins especially within real-estate investment where adaptation measures require further investment.

Whilst there has been improvement in adaptation action from CCRA2, changes have mainly been

made in climate risk regulation and reporting as opposed to changing capital flows. Moreover, given

the tightening climate policy landscape, there are significant lock-in effects if there is no substantial

redirection of financial flows. Whilst banking and insurance sectors have responded effectively to



current extreme weather events, the increase in magnitude and frequency means the likelihood of

‘unhedgeable risk’ is higher – straining the insurance sector. Given that financial risks are still not

integrated within firm operating models or in financial markets as a whole, there are still significant

systematic risks (Mandel et al., 2020). Whilst companies have started adopting TCFD

recommendations, identifying climate risks is only the first step. TCFD’s most recent status update

report acknowledges that there needs to be a better understanding of how disclosing climate-

related financial information is changing corporate strategies on adaptation, and how investors are

using the disclosed information to inform their decisions (TCFD, 2017).

The UK has been seen as a leading power through the passing of the 2008 Climate Change Act, the

recent adoption of a Net Zero target, as well as institution building and coordination across

government – though less so on climate change adaptation (CCC, 2019). With the UK set to host the

26th Conference of the Parties of the UNFCCC (COP26), there is also an aspect of this risk about

showing leadership on managing the risks to finance from climate change. A critical issue to tackle at

COP26 is the existence of a global green finance gap and many in the finance sector highlight the

uncertainty over national and international climate policy as a key factor in this gap (Hafner et al.,

2020).


It is difficult to estimate the potential costs and benefits of further adaptation. However, what is

clear is that the potential risks to the financial markets in the UK from climate change are extremely

large, and because of the role of UK financial services, very large for the UK. Dietz et al. 2016, using a

Monte Carlo simulation of the DICE model, estimated the present value at risk as a result of climate

change under a business-as-usual pathway to global financial assets as $2.5 trillion (mean expected

losses, discounted in present value terms) between now and the end of the century, and still $1.7

trillion under a 2°C pathway. However, under business as usual, the 99th percentile tail risk is $24.2

trillion. A sizeable amount of global financial assets are managed by the UK financial markets. There

are existing voluntary initiatives (TCFD) that are helping to increase the disclosure of these potential

risks, but as highlighted in Chapter 6 (Surminski, 2021), there appears to be less action on

adaptation.


Table 7.26 Urgency score for risk to the UK finance sector from climate change impact overseas

Urgency Score Sustain current action

Confidence Low

The risks to UK finance from climate change overseas were previously included in the CCRA2

Evidence Report within other risk categories. However, with an increasing international reputation

for climate finance, increasing evidence that London, as a finance centre, is a key strategic risk to the

UK economy, and increasing evidence of financial risk from climate impacts around the world, it is

important to highlight this as a specific risk area for consideration going forward. This current effort,



led by the UK Government, should lead to a better understanding of the risk exposure within the

finance sector and then to a reduction in the risk through further action. Given this current effort

and the substantial increase in action since CCRA2, we recommend the urgency score for this risk is

to sustain the current action (Table 7.26). However, this is based on the assumption that the UK

Government will maintain its commitment to grow its efforts against this risk and while there

remains uncertainty around exactly how these risks manifest, we have low confidence in this being

sufficient over time.

In addition to wider financial risk, there is a case for renewed efforts on climate finance directed at

helping countries protect their vulnerable populations. This would build on the UK’s previous

commitment to spend at least £5.8 billion of International Climate Finance (ICF) between 2016/17

and 2020/21. These actions would engender the alliances between the UK and the climate-

vulnerable nations that are needed in order to ensure UK leadership and legacy in climate

negotiations. It would also improve the UK’s global standing and reduce the overall risk exposure of

the UK’s finance sector.


Longer-term increased pressure from growth in global demand for all resources, as well as growth in

the UK finance and insurance sector exposure through international expansion, would make the risk

from climate-related shocks in other countries, and consequent cascading risks, more likely and

larger. However, it is not possible to quantify these risks at present given the interconnected and

speculative nature of the precise scenarios associated with this global demand growth and UK

finance sector expansion.

7.10 Risks to UK public health from climate change impacts overseas

(ID9)

This section examines mostly the threat of vector-borne disease (VBDs) to the UK arising initially

from human infections acquired abroad and import of infected vectors or animals. There are two

factors that determine climate-induced VBD risk: emergent favourability of overseas climate and

prevalence. The risk is high where the vector has been introduced recently and become endemic.

There are a number of examples where UK visitors to parts of Western Europe now bring the risk of

exposure to diseases, that until recently were only found in the tropics thus long-haul destinations.

The UK climate is also relevant, since it may change enough to allow local transmission of these

diseases by vectors that transmit the infection human to human or to a further host from that

initially overseas infected person (see Chapter 5: Kovats and Brisley, 2021).





The risk considers the introduction of an infectious disease from outside the UK within the remit of

the impacts of climate change (the people and wellbeing transmission pathway in figure 7.1). The

emphasis is on vector-borne disease risks as these are diseases that have been shown to spread due

to climate change and climate variability (see also Chapter 5: Kovats and Brisley, 2021).

Of the existing infectious diseases with known climate drivers, the most likely to impact the UK are

those transmitted by animal vectors. (but there are always risks from novel emerging diseases, such

as COVID-19, for which there may be an increased probability of emergence due to climate change,

see Box 7.1). These vectors are normally blood-sucking arthropods, namely mosquitoes, midges, and

ticks, for human and domesticated and wild animal diseases. In some cases, birds are the possible

introducer of the pathogen (Medlock et al., 2005), but the local climatic conditions have to allow the

transmission of that pathogen by the vectors, and to date, this has been observed in the UK more for

insects than other types of vector.

7.10.1.1.1 Vector borne diseases

For a vector-borne disease to emerge then three key factors have to be in place: 1. The vector has to

be present or introduced and able to establish and thus reproduce and, in the UK context, it thus

needs to be able to overwinter outside its active period; 2. The pathogen has to be present or

introduced and have a competent vector in the same location to enable transmission; 3. The host

(human or, normally, other warm-blooded animal) has to be accessible by the vector and susceptible

to the pathogens. The pathogen can be a bacterial, virus, or in the case of malaria a protozoa.

Although malaria has been transmitted historically in the UK and was not eradicated until the early

1900s, almost all cases found today have been contracted overseas. Therefore, it is not considered

here as it can be easily treated if recognised by the patient and medical practitioner (see also

Chapter 5: Kovats and Brisley, 2021 for an assessment of the risk of local transmission within the

UK).

Climate is important for the risk magnitude because the life cycle, development, and reproduction

rate of the vector has absolute limits imposed by the thermal climate. Additionally, it often needs

rainfall or other sources of small-sized water breeding sites. Most importantly the pathogen

development in the vector is driven by temperature and has, normally, a much higher initial

threshold for development than the vector itself. So, the vector can be present, but the climate is

often not warm enough for the effective development of the pathogen within its body (Medlock and

Leach, 2015).

7.10.1.1.2 Risk to public health from climate-related emerging diseases transmitted to UK

The main risks for UK public health from climate change impact overseas are through travel and

people movement. Climate change impact overseas increases the presence of diseases in more

areas, which means more of the UK population travelling overseas may be exposed and bring these

health risks (e.g., vectors) back to the UK. This, in combination with the UK climate becoming



increasingly suitable as a host to these diseases, has enhanced the risk of emerging diseases (with

overseas origins) within the UK.

Vector competence is the ability of European and UK endemic vectors to transmit currently exotic

pathogens, particularly viruses. Mosquitoes are an example of a specific public health risk with

origins overseas. The risk exists independently of climate change, but warmer temperatures would

allow longer transmission seasons. The UK has the Anopheline mosquito species, which is capable of

transmitting malaria and has done so historically (Kuhn et al., 2003). The most competent malaria

transmitter was Anopheles atroparvus which is widespread (Snow, 1998). Blagrove et al. (2016)

found that the mosquito Ochlerotatus detritus (Aedes detritus), whose habitat is brackish water, is

competent for West Nile virus (WNV) but not for dengue virus (DENV) or chikungunya virus (CHIKV).

With a highly effective health service and effective treatment and control, malaria is unlikely to re-

establish in the UK (see Chapter 5: Kovats and Brisley, 2021).

The two mosquito species giving more immediate concern are Aedes albopictus and Culex modestus.

Aedes albopictus is not endemic in the UK but has spread around the world, often in the trade of

used tyres, from its original SE Asia home to many tropical and more temperate parts of the world.

This mosquito is a competent vector of several arboviruses that affect humans, including

chikungunya, dengue and Zika viruses. It has been discovered multiple times in Kent but is not

established. This mosquito appears to be able to adapt to non-tropical climates (Waldock et al.,

2013). Using a modelling approach for the UK, Metelmann et al. (2019) suggested that the current,

warmed climate may be sufficient to currently sustain and increase the area around the Thames

estuary for this mosquito.

Culex modestus is a competent vector of West Nile virus (WNV) and was found established in two

marshland sites of the Thames Estuary (Golding et al., 2012). It has since been found at other sites in

SE England (Public Health England, 2018) and is spreading in East Anglia (Medlock and Vaux, 2012,

Hernández‐Triana et al., 2020). It is seen as the main bridge vector between birds and humans and

other animals, e.g., horses, in the transmission of WNV. Human cases have been recorded in

continental Europe. WNV could be introduced to the UK by migrating birds and serological evidence

of WNV infection have been found in birds in the UK (Buckley et al., 2003). In 2019 there were 834

cases of WNV reported in humans in the US. Based on the rapid spreading in the US causing 2000

deaths, from New York City in 1999 to southern California in 2003, it is reported to cross about

1000km per year when competent vectors are present (Hadfield et al., 2019, CDC, 2019). These

competent vectors include Culex tarsalis and Culex pipiens (Hadfield et al., 2019). In the UK, we have

Culex pipiens pipiens but is understood to be predominantly bird biting and is unlikely to act as a

bridge vector between birds and humans according to Public Health England (2017). However, they

do identify Culex modestus as a potential bridge vector with overall low to moderate risk.

The recent discovery of ticks carrying tick borne encephalitis virus in the UK is a further indication

that exotic diseases are becoming established in the UK (Holding et al., 2020).



7.10.1.1.3 Existing vector-borne diseases illustrate risk transmission pathways to the UK

Some existing diseases – whether or not they are linked to climate change - provide examples of

how interconnected risk cascades can operate, potentially illustrating the unpreparedness of the UK

to climate-related vector-borne transmissions. One such example is African swine fever. Although

this virus can be spread through ticks of the genus Ornithodoros, these ticks are only found on the

Iberian Peninsula in Western Europe. Transmission of this highly contagious disease is animal to

animal, infected clothing or boots and in contaminated meat products (movement of goods, people,

or wellbeing transmission pathways; c.f. Fig 7.1). Outbreaks in Europe as of August 2020 are as far

west as Slovakia and Poland, and more recently Italy, in both swine production units and wild boar

populations (World Organisation for Animal Health (OIE), 2020a, b). Wild boar cases have been

reported in Belgium in summer 2019 although the numbers seem to be diminishing (Defra, 2019a).

The ongoing outbreak in SE Asia is of concern to UK authorities (Defra, 2019b), CNN reports 100

million pigs in China have been lost to the outbreak (CNN, 2019). The fear in the UK is that through

contaminated meat the virus could spread to small scale pig producers, hobby farmers or the

introduced wild boar population. Outside the tropics, the distribution may well have climatic

controls (Donaldson et al., 2016) in the United States, and in its natural infectious cycle outside

intensive pig production in Europe (Chenais et al., 2019).

7.10.1.1.4 Lessons from COVID-19 for vector-borne diseases

The disease COVID-19 and the SARS2-CoV-2 virus that causes it gives a good insight into how an

endemic, indeed pandemic, of an infectious disease, can challenge society when the human-to-

human transmission is operating. As a result, there is now a much better understanding of how an

infectious disease develops within populations not previously or recently exposed to such pandemic.

Epidemics follow a natural curve that rises, peaks, and decreases (Giordano et al., 2020). In the UK,

the reduction in peak and reduction of overall cases came through restrictions of social activity and

the lockdown. Further waves can form as long as there are still cases or there is no effective

vaccination. Health services have finite capacity and thus controlling the peak is very important.

Test and trace is essential to detecting outbreaks and contacting people who have been infected

especially if they are asymptomatic (Wells et al., 2020). We also know that other diseases and

conditions go untreated or undetected leading to an increase in non-COVID-19 deaths currently or in

the months ahead e.g., cancer (Maringe et al., 2020). We must not forget the psychological impacts,

and these may impact not just in months but over years into the future, creating indirect effects or

risk cascades.

What can we learn from COVID-19 for VBDs? The initial spread of VBD is likely to be slower than

COVID-19. However, in the case of blue tongue, it was driven by animal movements and initially not

recognised. Blue tongue is a viral disease of ruminants spread by the midge vector of the Culicoides

genus. The spread of VBDs can be accelerated if, for example, a family returned to the UK with an

exotic viral disease and has human-to-human contact with the summer holiday tourist influx (a clear

issue with COVID-19). Furthermore, overseas visiting populations spending time outside and among

local populations could be prime locations for the infection to cross over between populations. This

can be brought back to the UK along with the movement of people transmission pathway, as was the

case with COVID-19. Therefore, it is the movement of humans rather than the vector itself that will



spread the disease. Further, the geography of VBDs is changing in Europe, which means UK visitors

to the EU can be increasingly at risk and are more likely to bring VBDs to the UK.

7.10.1.1.5 Mental health issues arising from climate change impacts overseas

Climate change is a factor that is adding to mental health and wellbeing challenges (Berry et al.,

2010). Indicators of health and wellbeing, while being shown to not increase above a certain level of

GDP per capita, can be enhanced through a range of other socio-environmental factors such as

access to nature (Maller et al., 2006; Pretty et al., 2016). Societal groups, in particular young people,

have increasingly expressed despair at seeing and hearing the impacts of climate change which so

far have been more severe outside the UK in terms of human and ecological impact, through the

increasing IT & information transmission pathway, and their helplessness to change it, as is often

demonstrated and expressed through participation in climate activism. Social amplification or

attenuation, through societal response, will therefore become increasingly important. Young people

are particularly vulnerable as they have fewer resources and strategies to cope with this challenge to

their wellbeing, and patterns of mental health in children and teenagers is also an important

determinant of mental health in adult life (Carod-Artal, 2017). In a broader societal context, climate

change discourse can lead to community level division and fractionation, which can impact the

community-level mental health and wellbeing.

The impact on mental health can be measured based on the level of “feeling secure” and “quality of

life”. As evidenced in a recent review, the indirect impacts of the mere fact that climate change is

occurring on mental health “are no less serious because they can [contribute] to disorders, such as

depression, antisocial behavio[u]r, and suicide” (Clayton et al., 2017). Climate change impacts abroad

such as loss of life and biodiversity may add to this stress. A sense of wellbeing for UK citizens may

also be attached to their leisure time and, for example, an ability to travel and interact with nature

in other parts of the world (as is evident from COVID-19's impact on overseas vacations in 2020:

Flaherty and Nasir 2020). If iconic and meaningful assets, such as the coral reefs are lost, or there is

an increase in turbulence making flights less comfortable (Williams and Joshi, 2013) and there will be

some degradation of this sense of wellbeing through travel.

Box 7.4 Case study of risks from competent UK vectors

The spread of dengue from nine countries a few decades ago, to being endemic for almost half

the world’s population today, is highly relevant to ongoing climate-induced risks. Especially, since

people continue to travel and return from these areas (Hosangadi, 2019). These changes in the

distribution of dengue are probably in part driven by climate change, urbanisation and the ability

of Aedes spp. mosquitoes to thrive within polluted water of rapidly expanding urban areas mostly

in the tropics and sub-tropics give wider cause for concern.

Further areas of concern include the spread in the U.K. the spread of Culex modestus (a

competent vector of West Nile virus, WNV) from its recently-found but established marshland

sites of the Thames Estuary to a wider area; the discovery of the virus that causes tick born



encephalitis in 2019 for the first time in two places the UK; and the regular introduction and

detection of Aedes albopictus in Kent.

The autochthonous (locally acquired) cases of dengue in Spain and France reported in September

2019 due to Aedes albopictus (ECDC, 2019), the 2017 local outbreak of chikungunya virus in Italy,

2017 (Lindh et al., 2019) and Italy’s first autochthonous dengue outbreak in August, 2020

(Lazzarini et al., 2020); are real wake up calls. These outbreaks have shown how vulnerable

mainland Europe, frequently visited by UK travellers (movement of people transmission pathway)

is to the introduction of what were seen previously as tropical diseases.


The frequent reintroduction of Aedes albopictus (a species of mosquito), although probably not fully

established, with its ability to adapt to cooler climates suggests that relatively small upward shifts in

temperature along with a future run of warmer summers extending into warmer autumns may well

allow this mosquito to spread. This mosquito can transmit a number of viruses to humans including

dengue and chikungunya (Metelmann et al., 2019). Although at present a more geographically

limited threat in the UK, Aedes mosquitoes thrive in urban areas making London at increasing risk of

establishment.

As climate change impacts overseas increase, there is the potential for increased anxiety for people

about family and friends being exposed to risks overseas, for interruptions to travel, or disrupted

journeys, or events happening whilst people are on holiday (Flaherty and Nasir, 2020), or about

environmental degradation (Cunsolo & Ellis, 2018).


No clear issues with lock-in or thresholds have been identified.

7.10.1.4 Cross cutting risks and Inter-dependencies (ID9)

There are interdependencies between disease risk, trade, and the movement of people – as these

are potential routes for the introduction of diseases and vectors to the UK. This is in addition to

climate-related movement in vector ranges, and the relationship between climate and the

emergence of new diseases. Surveillance at borders – particularly after EU-Exit – is therefore of

increasing importance.


Within the UK, habitat changes, especially wetlands, need to be actively managed, so they do not

become an emerging breeding ground for newly-arrived vectors. This is also the case for the creation

of urban green and blue spaces and the development of Sustainable Drainage Systems (SuDS) in

urban and peri-urban areas with high population densities and recreational usage. There is therefore

a potential link to extensive use of SuDS as a strategy within Net Zero commitments.




COVID-19 has also illustrated how socio-economic conditions can impact disease transmission and

risk. Here, vulnerability refers to how this risk might impact the most vulnerable population within

the UK, and risks increasing inequality i.e., lower economic households having less capacity to cope,

or those already vulnerable in terms of health. A combination of these vulnerabilities leads clearly to

multidimensional vulnerability. COVID-19 and probably most infectious diseases have much higher

risk and more severe outcomes for the elderly, or people with existing health conditions, such as

immunosuppression. For vector-borne diseases that might emerge, it may show different socio-

economic patterns, especially for vectors that do not thrive in cities. Here it may affect more people

who can afford to be outside in areas where the vectors can thrive. For urban adapted vectors, it is

likely to impact the poorest, living in substandard housing, with a higher number of inhabitants per

room or building, and possibly working outside thus increasing their exposure to the vector.


Table 7.27 Magnitude score for risk to UK public health from climate change impact overseas


2080s




end of century




end of century

UK High

(Medium

confidence)

High

(Medium

confidence)

High

(Medium

confidence)

High

(Medium

confidence)

High

(Medium

confidence)

See explanation in ID1 for similar future scenario magnitude scores.

Over the last decade the world has seen emergence or re-emergence of COVID-19, SARS, Ebola, Zika.

All have led to significant interruptions resulting in high impact in terms of costs as defined in Table

2.2 in Chapter 2 (Watkiss and Betts, 2021). Similarly, whilst in any given year the risk may be low, it

increases in magnitude as time goes on. Some of these health risks had strong climate drivers e.g.,

the Zika outbreak in Brazil. The direct impact on the UK for these outbreaks has ranged from minor

to great, and where not directly impacted, the UK has often been active in providing assistance. The

magnitude of impact this risk presents means the magnitude score for the current risk and future

risk are both High (with medium confidence).





Controlling vector-borne diseases entering the UK is the focus of adaptation for this risk (for risk H8,

the assessment looks at controlling vectors and diseases once they have entered the UK). EU Exit

could make entry checks more challenging if there is a decrease in the work with and access to the

European Centres for Disease Control (ECDC). At this stage (time of writing), it is unclear if the UK

will remain part of international public health surveillance systems including the ECDC.

Border surveillance is also critical to dealing with the international dimensions of climate-related UK

public health risks. This is occurring, but again it is difficult to determine on the basis of the evidence

available how much is happening and what types of vectors or diseases are being screened for, and

if any are not that should be in the next five years. National checks and surveillance of vector species

is determined by the resources to spend on 1) tick recording schemes (TRS) and 2) surveillance by

Public Health England (PHE) of endemic and invasive mosquitoes at ports of entry (e.g., used tyres

checks). Chapter 5 (Kovats and Brisley, 2021) provides more details on this and on adaptation for

diseases emerging within the UK.


Although established monitoring systems are in place, given the uncertainties over the extent of

checks at UK entry points, there is an argument for enhanced surveillance of both exotic vectors and

pathogens at UK entry points. Further work on vector competence (to what extent vectors are

carrying and transmitting diseases when they enter the UK) is also required. Further work on

modelling the risk of emergent vector-borne disease due to climate change is needed.


Table 7.28 Adaptation score for risk to UK public health from climate change impact overseas


UK Partially

(Low confidence)



7.10.3 Benefits of further adaptation action in the next five years (ID9) 7.10.3.1 Indicative cost and benefits of additional adaptation (ID9)

Actions to promote adaptation to emerging diseases include:

● More real-time monitoring of air travel routes, transmission pathways of movement of

people and goods. ● Communicate outdoor risks if a vector-borne disease is introduced. ● Improve training and awareness of primary health care practitioners. ● Raise the levels of surveillance programmes and some random screening (for example, part

of blood donation screening for antibodies). ● Improvement of public and professional level information, transmission pathway

IT/information.

There would be benefits from increased surveillance of wildlife, people or other imports (e.g., used

tyres) coming into the UK, which comes with increased costs. However, if newly arrived infected

vectors or animals in combination with a more favourable UK climate leads to local transmission, the

cost of the impacts may be a lot more. COVID-19 has provided a good example of the scale of impact

costs and how this can cascade into other sectors. Therefore, it shows that investments in

surveillance can pay off to avoid high impact situations.

It is not clear how the UK could fully protect itself from risks from emerging diseases overseas that

have a transmission pathway to the UK. Targeted public information, advertisements in holiday

destinations about outbreaks, and more information or advertisements in in-flight magazines would

support this effort. Further actions include improving seasonal forecasts of conditions for the

establishment of vector-borne disease, especially the extension of summer-like conditions into the

autumn; improved awareness of risks at both primary and secondary health care; better monitoring

and surveillance of potential vectors in the UK, especially for virus antibodies.

Actions can also be taken that target key overseas areas, i.e., monitoring and research in areas

overseas that are likely to be prone to the emergence of new infectious diseases both vector-borne

and other contagious diseases. Ongoing collaborative research and monitoring are critical if

imported health risks are to be avoided. One key challenge for research comes from EU Exit: in the

past, the European Commission funded many of these integrated projects involving environmental

and social controls and impacts of infectious diseases. If this funding source becomes closed to the

UK, then these opportunities will need to be replaced by UK funding if we are to continue to engage

in this pool of expertise and knowledge production.


Table 7.29 Urgency score for risk to UK public health from climate change impact overseas


Confidence Medium



The urgency score for this risk is for more action (Table 7.29). This score has been given because of

the potential for significant impacts from emerging diseases if new vectors or pathogens enter the

UK and then become established. Although established monitoring systems are in place, given the

uncertainties over the extent of checks at UK entry points and the high level of potential risk, there is

an argument for enhanced surveillance of both exotic vectors and pathogens at UK entry points.


The longer-term risk from vector-borne diseases probably revolves around the spread of mosquito

vectors already identified, although the potential for an endemic species to be competent in the

spread of an exotic pathogen e.g., an arbovirus cannot be ruled out. COVID-19, although SARS2-CoV-

2 is not vector-borne, has shown how an emerging disease can disrupt the nation and lead to a

death rate on a level not seen since wartime. As detailed in this section the world has seen a

number of emerging diseases or introduction of diseases endemic elsewhere in the world, which

move country to country. Some of these have been introduced into the UK. It is certain there will

further emerging diseases, some of which could have even bigger impacts than COVID-19 and be

introduced to the UK and could also disrupt the UK economy from overseas through changing supply

chains, trade, people movement and so on. The world needs to learn and remember what is needed

for the next time, but also there is a need for much better preparedness and more pro-active

research into emergent diseases and research and training into their containment. Our view is that

the recent funding cuts and reorganisation of government departments have reduced the UK’s

capacity as a nation in this area. The UK needs to seriously consider the importance of disease (re-

)emergence as a risk to the health and economy of the UK, including potential risk cascades, and

systematic risks, and how well that work in this area is funded.

7.11 Systemic risks arising from the amplification of named risks

cascading across sectors and borders (ID10)

Whilst the risks above focus more on “sectoral risks”, there is the potential for hazards to create

cascading risks that cross sectors and geographies through contagion. COVID-19 is an example (see

Box 7.1): the emergence of the disease may have an attributable component from climate change,

but the spread of the disease, and attempts to mitigate it have created disruptions in demand, in

trade through supply-chain disruptions from changes in labour availability, through people

movement and broader economic impacts. These multidimensional impacts affecting multiple

sectors and all countries are an exemplar of “systemic risks” arising from highly inter-connected

sectors and economies.

This chapter has addressed a range of international climate risks with impacts across food

production systems, international violent conflict, human movement, trade, markets and finance,

health, and governance. The framework outlines how these risks can interact geographically and via

teleconnection, through various pathways to arrive in the UK. Therefore, the interconnectedness of

considered risks (ID 1-9) evidences a need for a more joined-up assessment of the systematic risk of



international climate change to the UK, which is more than just a sum of each individual risk. This is

ID10: Systemic risk arising from the amplification of named risks cascading across sectors and

borders.

Processes of social amplification and risk interactions or cascades are often missing from narrow or

sector-bound risk assessments that are relied on for decision-making (Challinor et al., 2018). This

issue was documented by Renn (1998) but also emerged from the synthesis of evidence conducted

per risk in this chapter. The risk assessments and evidence that we have reviewed under each risk

heading often contain sector-specific studies that miss the bigger picture and therefore may

underestimate the threat arising from the impacts of climate change. The capacity for a systemic

risk assessment is therefore still limited by siloed and disciplinary evidence bases these assessments

are founded on.

The need to be cognisant of systemic risks is growing for three reasons:

1. Systemic risks arise from a combination of local feedbacks and larger-scale events within

tightly coupled systems, and whilst they may have a “trigger” - a climate hazard, for

example, the trigger itself is not the “cause” rather the catalyst, and causation arises

from a concatenation of multiple circumstances (e.g., food price spike arises if there is

pressure on the system if there is a lack of transparency about stocks and the perception

of an unexpected event; the event itself, under other circumstances may have little

impact). Emerging literature, and the experience of COVID-19, provides a stronger body

of knowledge of systemic risks (see Challinor et al., 2016; Adger et al., 2018; Centeno et

al., 2015; Gaupp et al., 2020; IRGC, 2018; Peters et al., 2015; Vié and Morales, 2020). A

corollary of this body is there is no simple linear mapping of hazard to impact: as

detailed in multiple places above the same hazard above can have different outcomes

depending on the circumstances. It is not easy therefore to forecast specific risks, rather

recognise the potential for systemic events and build resilience in.

2. The experience of cascading risks over the last decade or so (see references above and

Table 7.30) has highlighted that the global interconnectedness of the system, the just-in-

time nature of supply chains, and more unstable global geopolitics has made the

systemic fragility greater than hitherto. In particular, the costs associated with

disruptions arising from cascading risks from supply chains can be much greater than the

direct costs of the hazard itself (Inoue et al., 2019). Estimates of the economic costs of

COVID-19 range from USD3.3-83 trillion (Centre for Risk Studies University of Cambridge

Judge Business School, 2020), of which only a small fraction is the direct healthcare-

related costs (Tan-Torres Edejer et al., 2020). In the UK context, Lilly et al. (2020)

estimates the economy-wide cost of COVID-19: the economic cost, as measured by an

increase in public borrowing, is projected at over £300bn, the increase in the budget for

healthcare (via the NHS) is ~£5bn).

3. Climate hazards, associated in particular with extreme weather are becoming more

prevalent: extremes are getting more extreme and more frequent, and with noticeable

teleconnections (e.g., the extreme Delhi freeze and Australian drought at the end of



2019 are linked to an “extremely positive” Indian Ocean dipole (Wright et al., 2020);

2019 was also a year for record wildfires in N and S America, Australia, Indonesia and

Siberia (Huffington Post, 2019)). Attribution science is also highlighting the relationship

between extremes and climate change (Carbon Brief, 2020). Hence, some hazards are

getting more frequent, more severe and perhaps more likely to co-occur.

All in all, our view is that the evidence from the wider risk literature is that the potential for systemic

risks is growing through a more inter-connected world, where risk transmission mechanisms allow

risk cascades that lead to system-wide consequences. Systemic risks are, by definition, very

significant risks and are often orders of magnitude more impactful than any direct and local risk

arising from a climate hazard within a given country. However, by the nature of this topic, there are

insufficient examples that link specific events (hazards) to specific impacts in a way to generate

broad general conclusions about patterns. Climate hazards arise with quantifiable accuracy and

uncertainty and can be projected forwards, but the vulnerability and exposure are complex

social/political/economic (or more complex ecological/social/political /economic) functions that are

probabilistically unquantifiable. Systemic risks are therefore unlikely to be amenable to standard

risk assessment approaches (Challinor et al., 2018). Rather, assessment of this area suggests that

there is significant evidence for systemic risks to be ‘sparked’, from a very wide variety of hazards

due to climate change (from low probability/high impact extremes or a combination of higher

probability/low impact events) interacting with multitudinous drivers and contexts.



Examples given for ID1-9 in this chapter - summarised in Table 7.30 - have evidenced the systemic

nature of international climate risks to the UK. These exemplify the transmission of risks across

geographies and teleconnections, sometimes through complex and non-linear cascades. Many

included examples also illustrate that social amplification of a hazard can have a greater significance

than the initial direct impact.

Examples of risks that have cascaded into creating a systemic risk include the Great-East Japan

Earthquake and Tsunami which inundated Fukushima, a disaster unconnected with climate

change. Whilst the tsunami and radioactive leak had (primarily) local effects, the wider impacts

were greater: the nuclear leak affected power generation, the wider economy, oil prices, and the

stock market, with global effects. Car and electronics manufacturers worldwide were impacted due

to the reduction in the availability of Japanese-produced parts (Scheffran, 2015). Another example

is the 2007/8 financial crisis and its cascading, contagion on the global financial network, leading to

impacts through recession, debt, and austerity which lasted over a decade. The final example is

COVID-19, the global pandemic. Global estimates of the economic cost of the ongoing pandemic

include plausible worst cases of over $80 trillion (Centre for Risk Studies University of Cambridge

Judge Business School, 2020).



Table 7.30 Examples of risk transmission mechanisms. Systemic risks arise if a hazard (climate-

induced disaster, or a hazard arising from climate change) is sufficiently large that it passes along

multiple pathways, crossing geographies, sectors and impacts economic and societal

fundamentals.

Example of risk transmission

Type

Transmission

Pathways

Reference From To

Production in Spain

affected by

weather

Salad shortage in

the UK

Geographically Movement of

Goods

BBC News, 2017a;

Guardian 2018

Failure to find

consensus in

international

climate agreement

Anxiety or loss of

wellbeing, protest

and loss of trust in

governance

systems in the UK

Teleconnection Information and IT,

Governance

Cunsolo and Ellis,

2018

Local health

impacts from an

emerging disease

(e.g., COVID-19)

Loss of finances

and business

failure in the UK

Teleconnection &

Cascade

Movement of

People,

Information and IT,

Finance

See ID9

Water scarcity in

Coca Cola

production region

in India caused by

changing weather,

and local failure of

governance

process to resolve

tension or conflict

Loss of custom and

damage to

reputation in the

UK

Teleconnection &

Cascade

IT and Information Karnani. 2014

Inclement climate

conditions during

Syrian conflict

Asylum

applications

increased,

contributing to

political tensions in

the UK


People

Abel et al. 2019

Chinese COSCO

shipping via

Arctic following ice

melt

Increase in

commercial trade

routes such as

wind turbine

equipment delivery

in the UK


Goods, Markets

See ID6

Assets exposed to

more extreme

weather events

abroad

UK investments

risks and pension

funds

Teleconnection &

Cascading

Finance Dietz et al. 2016

Due to the potential for hidden tipping points and the unpredictability of systemic risks, the learning-

from-doing model of conventional risk governance has limited applicability in the confrontation of

systemic climate risks to the UK. Instead, guidelines for dealing with systemic risk advise an iterative

and ongoing process of governance, which requires “strong leadership and the willingness to adapt



or revise processes, focus on mid- and long-term issues, and accept and resolve trade-offs" (page 17.

IRGC, 2018). Whilst this particularly applies to ID10, in a sense, most of the preceding risks have the

potential to develop into systemic risks via risk cascades, and governance adaptability is therefore, a

generic need for this chapter. To understand the potential impacts of systemic risks, assessment

methods have to identify the low probability and high consequence risks (or combinations of higher-

probability events that may create systemic shocks) as well as the more commonly studied ‘high

probability’ risks. Methods often applied to this end include using scenarios or storylines to

understand the full scope and intensity of a risk and to visualize how a risk may evolve beyond the

range of experienced previous outcomes (ibid.).

Systemic risks arise when a hazard leads to risks that cascade across sectors and lead to an overall

systemic impact. The focus of this risk is on systemic impacts arising from the transmission of risks

from overseas through the movement of goods, people, information, finance, governance issues, etc

(Fig 7.1). Managing this range of flows is typically a combination of HMG/reserved control and

devolved control. The Internal Market Act (2020), and EU Exit has changed the way goods flow into

and out of the UK and also within the UK. The availability of some goods in Northern Ireland has

been reduced in the weeks following the end of the transition period in early 2021. COVID-19 has

illustrated the complexity of the governance of systemic risk within the UK, with the different

regions being differentially exposed to, vulnerable to risks, and responding differently in their

actions to mitigate risks.


The investigation of systemic risk is an active field, and our understanding is advancing fast, as is our

collective interest to deal with it (sparked by the events of the last decade outlined above, plus

COVID-19). However, the extent to which we will manage to “build back better” to increase

systemic resilience is highly uncertain. As highlighted in multiple places above, the risk depends on

the hazards (which are increasing), exposure (the degree of embeddedness in global networks and

their fragility, which has increased in recent decades and is likely to continue to do so; coupled with

geopolitical stability, which may increase or decrease e.g., TIME, 2020), and the vulnerability (which

in part depends on supply chain functioning, but also national income and inequality: sudden

changes in price impact the poorest most; thus vulnerability may well increase in the post-COVID

era). Hence, our view is that systemic risks are likely to increase in the future.


As highlighted in ID1 above, our economy is a complex system that creates its own lock-ins (the

“wrong sort of resilience”: Oliver et al. (2018)); making adaptation to rapid changes difficult. It is

axiomatic in complex systems that change happens in ‘saltations’ or ‘punctuated equilibria’: a stable

configuration remains stable in the face of changing drivers or small-scale perturbations until it

passes a threshold, or is perturbed sufficiently, and reconfigures in a new state. COVID-19, coupled

with EU-Exit, is creating an economy-wide perturbation that has caused many local-lock-ins to be

deconstructed. This provides a timely window of opportunity to help reconfigure the system in new

ways – ‘build back better’. However, if this window closes and we reconfigure into the previous

business as usual state, the opportunities for adapting to, and therefore mitigating, the risks



discussed above become more difficult, particularly that dealing with systemic risks calls for building

resilient economies and societies.

7.11.1.4 Cross-cutting and Inter-dependencies (ID10)

This risk arises from inter-dependencies across time, space, and sectors.


The main relationships to Net Zero commitments are (a) the extent to which focus is on narrow-

sense productivity growth, through efficiency, to reduce emissions, as this may lead to reduced

resilience via reduced functional redundancy, and (b) the extent to which Net Zero leads to price

rises, which increases the vulnerability of low-wage households.


Systemic risk leads to society-wide impacts that are broadly felt, but by their nature impact most on

the most vulnerable: the elderly, infirm, and economically marginalised.


Table 7.31 Magnitude score for systematic risk arising from the amplification of named risks



2080s




end of century




end of century

UK High

(High

confidence)

High

(Medium

confidence)

High

(Medium

confidence)

High

(Medium

confidence)

High

(Medium

confidence)

By their nature, specific events and how they may cascade through socio-economic and political

systems are inherently unpredictable and unquantifiable and by definition, the risk magnitude is

“high” as a systemic risk is likely to have economy- and society-wide impacts. However, there are

potentially a very large number of hazards that could drive systemic risks across the world and in the

UK. Even if each were a low probability event, the likelihood is high that in an arbitrary time period,

something will happen - even if the something is unpredictable - that will create a systemic risk with

profound impacts, easily reaching the hundreds of millions in damages or affected millions of

people; hence a high magnitude score has been given for the current and future risk in all scenarios

COVID-19 as an example of a systemic risk is estimated to cost the UK £280bn in 2020 (BBC News,

2020).




7.11.2.1 Effects of current adaptation policy and commitments on current and future risk (ID10)

There is clearly significant policy planning across the UK Government for known high-impact, low

probability, events (e.g., disaster risk management, or pandemic preparedness). However, such

planning typically takes as its focus the ‘black swan’ – a single low probability, high-impact, event

(Willis Towers Watson 2020, Kay and King 2020). Systemic risks however can perhaps more

commonly arise from a higher-probability, lower-impact events (or multiple events together) that

interact with human systems that are already under pressure from other drivers, with the impacts

rippling out, and being socially amplified, across sectors, geographies and time. Current adaptation

largely considers risks primarily as hazards and treats domains separately and independently.


Systemic risk is rarely a focus of adaptation-planning or planning broader economy (an example is

that trade discussions do not consider the extent to which an agreement would increase UK supply

chain resilience). Leaving the EU has made it necessary to consider the impacts of severe supply

chain/border disruption (Operation Yellowhammer). The experience COVID-19 is also providing

more lessons on systemic risks and their impacts.

The take-home message from this chapter is that (a) disruptive events - climate hazards - are made

more likely by trends in emissions, driving climate change, and trends in the socio-political and

economic factors that affect the exposure and vulnerability to these hazards, and (b) systemic risks

are more likely in the future than the past, and potentially more disruptive because all elements of

the risk (hazard x exposure x vulnerability) are currently increasing, as discussed in the introduction.

Current adaptation largely considers risks primarily in terms of a focus on single hazards, and also

largely treats domains separately and independently: systemic risk is rarely a focus of adaptation

planning or planning across the broader economy.

Our view is that adaptation should therefore be enacted by integrating knowledge and consideration

of climate change’s role in systemic risks into decision-making across government sectors. This may

require recognition that systemic risks can arise from one sector and transfer across sectors, and

that adaptation planning requires ‘whole of government’ involvement, rather than being led by a

single department associated with a given sector. For example, when building new trade relations

there is a need to consider systemic resilience as well as its benefit to UK economic growth. In short,

there is a need for greater consideration of ensuring that the UK economy adapts to increasing

systemic risks arising from the transmission of goods, people, finance, and information from

overseas.




Table 7.32 Adaptation scores for systematic risk arising from the amplification of named risks



UK No

(Low confidence)

An adaptation score of ‘no’ reflects the lack of planning across government for these multi-

dimensional risks that are increasing through time due to ongoing climate change increasing the

hazards, but also a background increase in exposure and vulnerability across the country.



There is an emerging literature on transformational adaptation9 to deliver better resilience to future

climate change. While definitions vary, much of the theoretical literature emphasizes

transformational adaptation involving a system-level (systemic) approach and there is often a focus

on changes in governance as well as underlying causes of risk or vulnerability (Lonsdale et al., 2015).

However, there is very little economic evidence on the costs and benefits of transformational

adaptation, reflecting that there is very little concrete evidence on what transformational adaptation

looks like in practice (see Watkiss et al., 2020). This is an area where further investigation (of

economic evidence) is needed.


Table 7.33 Urgency score for systematic risk arising from the amplification of named risks



Confidence Medium

Due to the systemic nature of international climate risks to the UK - its unpredictability and

interconnectedness - adaptation would benefit from increasing the country’s broad resilience to

systemic disruptions rather than solely focussing on reducing the exposure of the UK to any one

specific risk event and outcome. Therefore, the main adaptation benefits will come from reducing

the fragility of our systems, and these will often create co-benefits outside of the reduction of

9 Defined in this CCRA3 Technical Report as ‘Adaptation that changes the fundamental attributes of a system in

anticipation of climate change and its effects’



climate risk. COVID-19 has brought to the fore the notion that economies must consider resilience

(OECD 2020b; UNFCCC 2020; Foreign and Commonwealth Office and Lord Ahmad of Wimbledon

2020) as well as ‘productivity’ and ‘growth’ in adapting to the future. OECD 2020a firmly recognises

the need to consider systemic risks more deeply than before.

Resilient economies are ones that can absorb shocks or recover quickly: this is often associated with

diversity and redundancy (e.g., de-centralised systems, multiple logistical routes,

stores/savings/safety nets etc). Many such resilience-building routes have, however, been removed

because resilience is less efficient (in times without risk). Given the opportunities of the next

decade, as the UK adjusts to leaving the EU and recovers from COVID-19, there is an opportunity to

‘build back better’, where part of the ‘better’ is greater resilience (OECD 2020c). Resilience can also

arise from changing behaviour. There are multiple examples where local and regional management

that engages with public behaviour is key to developing broad resilience. Examples include:

● From ID9- local surveillance of pathogens in vets and communities and developing behaviour

in those communities that reduces risks e.g., plants and water bodies for mosquitos, or an

example from behaviour and spread of COVID.

● For ID4- management of conflict risk being more effective when at regional or local level.

● For ID1 and ID2, localizing food systems may be win-win in terms of more sustainable

healthy diets but also decreasing vulnerability/exposure to impact of climate risks to food

supply, markets and trade.


Systemic risks are likely to increase in the future unless significant adaptation occurs to consider how

to build economic resilience to risks cascading from overseas. There are many tools to increase

resilience: build more functional redundancy through diversity, distributed networks,

substitutability, safety nets, as well as building more resilient societies that can absorb shocks

through behavioural change.



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Technical Report Chapter 7: International Dimensions

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