London scoping - ukcip

Final Report
151
7. The Potential Economic Impacts of
Climate Change in London
7.1 Introduction
London’s role in the UK and international economy ensures that any climate change impacts on
its economy are likely to have significance in terms of economic multiplier effects elsewhere -
see Box 1. This section of the report identifies and evaluates the importance of potential climate
change impacts on economic resources and economic activity in the city. We take as our
starting point in this exercise the findings of the previous sections of climate change scenarios
for London and the associated environmental and social impacts.
Furthermore, the socio-economic scenarios described in the preceding section are shown below
to be important in determining the likely severity of the economic impacts in the future.
It has been agreed with the LCCP that it is most useful to consider economic impacts in terms of
their sectoral classification. Thus, we adopt the sectoral classification suggested by the project
Steering Group to include the most likely significant sectors in determining the future economic
prosperity of London. These sectors are:
Tourism and leisure;
Insurance/financial businesses;
Manufacturing industries;
Public administration;
Creative industries;
Environmental businesses.
Consideration of these sectors will be in parallel with the cross-sectoral elements likely to be
impacted by climate change in London. Foremost amongst these are: transport; energy and
labour supply. Clearly, impacts on these (e.g. transport disruption due to flooding) will have
consequent impacts on economic activities (e.g. disruption to freight) and these linkages are
traced. A detailed analysis and evaluation of possible adaptation strategies is likely to be
undertaken in phase 2 of this project.
London’s present status as a world city rests largely on the fact that it supports a substantial
concentration of economic activities that are critical to the global economy, principally
including the financial services sector and its linkages with global trade and commerce. The
potential impacts of climate change on this status are considered - relative to other competing
world cities such as New York or Tokyo.