Focused Adaptation: A Strategic Approach to Climate Adaptation in Cities

McKinsey & Company and C40: Brodie Boland, Elizabeth Charchenko, Stefan Knupfer, Shivika Sahdev, Neuni Farhad, Snigdha Garg, Rachel Huxley
Created: 4/12/2022 -


Cities are on the front lines of the growing physical risks associated with climate change. Urban areas are home to dense concentrations of people and are often located in places of particular climate risk, such as on coastlines, floodplains, and islands. Moreover, the built environment associated with cities can exacerbate climate impact. Given existing emissions, some climate change is already locked in, making these risks unavoidable. To protect the lives and livelihoods of urban residents, cities must improve their resilience.

Previous research has shown the risks of inaction. Among the possible consequences: hundreds of millions of people could suffer lethal heat waves in India, floods in Vietnam’s Ho Chi Minh City could result in losses of billions of dollars, and homes in Florida could lose $30 billion to $80 billion in value. The imperative is to adapt—and to start now.

Cities are complex, characterized by a wide variety of natural features, economic endowments, social conditions, institutions, and built environments. They also face different climate risks and have varying levels of vulnerability. Some adaptation options that are effective in most cities may not be feasible in others, given soil conditions, topography, elevation, power composition, age of buildings, and other factors. This complexity means that city leaders have a dizzying array of options for adaptation, making it difficult to set priorities and choose a course of action.

This report, written by C40 Cities and McKinsey Sustainability, examines adaptations that city leaders can consider as a starting point. Our research has identified a set of 15 high-potential actions that can work for many types of cities, based on their risk-reduction potential, cost, feasibility, and stakeholder complexity.

Four of the actions build systemic resilience, meaning they strengthen cities of all profiles. The other 11 are hazard specific, meaning they target particular physical climate risks. Several of the solutions address both risk reduction and decarbonization. This list is not a definitive directory of actions that all cities should take, but we hope it is a useful guide to help leaders address the climate risks facing their cities.

The 15 high-potential actions range from infrastructure actions such as flood- and storm-resilience measures for buildings in coastal, flood-prone geographies to behavioral actions such as encouraging water conservation during droughts. Looking at these actions as a whole, leaders will notice that several themes emerge.

First, nature-based solutions—such as planting street trees, managing river catchment, using nature-based sustainable urban drainage solutions, and creating coastal nature-based barriers—are among the most attractive actions in terms of both their impact on reducing risks and their feasibility. Nature-based actions can build resilience across all five hazards addressed in this report; in three of the five hazards, nature-based actions are the most attractive options. In addition, they often have benefits beyond adaptation in areas such as decarbonization, health, and economic growth.

Second, cities should invest in actions that increase resilience systemically, in addition to adapting to specific and immediate hazards. Systemic resilience includes increasing awareness of physical climate risks, incorporating risk assessment into city processes, optimizing emergency response, and enhancing financial and insurance programs. Within each of these four categories, all cities, regardless of risk profile, should consider the following categories of action: performing risk assessments, incorporating climate risk into planning, building early-warning systems, and increasing access to affordable hazard insurance.

Finally, this report is a call to action—focused action. Climate adaptation is one of many competing priorities, and urban resources are limited. In a study of climate funds raised by developed countries for developing countries from 2013 to 2018, the Organisation for Economic Co-operation and Development (OECD) found that in 2018, only 21 percent of funding went to climate adaptation and resilience. By identifying the most effective and feasible actions, cities can focus on executing them well and build momentum to do more.

The effects of climate change are already measurable. Furthermore, decarbonization efforts are not on track to meet the global consensus goal of limiting the rise in temperature to no more than 2 degrees Celsius—let alone the more ideal goal of 1.5 degrees Celsius. This report provides critical guidance to help cities play an important role in making swifter, surer progress in adapting to climate change.

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