London scoping - ukcip

Final Report
152
Box 1 A profile of the economy of London in relation to climate change
Greater London has an estimated GDP of £168.6 billion, and accounts for 20.3% of the UK
GDP. This economic activity supports a workforce of 3.5 million, 32% of which are in business
and financial services, 19% in the public sector , 16% in retail, 7% in manufacturing, 6% hotels
and restaurants. It is estimated that London ‘imported’ from the rest of the UK £89 billion of
goods in 1998 - supporting 4.7 million jobs outside the capital.
The title of Global City derives from the fact that it is one of the three largest financial centres
in the world (alongside New York and Tokyo) and has the largest share of trading in many
financial markets, including foreign exchange of which it controls 36% of the global turnover.
The City of London has a GDP of £22 billion - equivalent to 2.6% of the UK GDP.
Manufacturing in London is responsible for 300,000 jobs (7% of the capital’s workforce) and
£11 billion output. The creative industries, including theatres/cinemas, contribute £7 billion to
the UK’s GDP, whilst the city also has the characteristics of a knowledge economy, being a
centre of academic excellence and providing research and consulting services throughout the
world.
Box 1 presents an overview of the London economy. It demonstrates that whilst the economy
of London is pivotal to the UK, and perhaps, global, economy, it is by its nature therefore
heavily inter-dependent on the national and global economies. Any impacts on London of
climate change are therefore likely to have significant wider implications. At the same time,
climate change impacts of perhaps greater magnitude elsewhere in the world are likely to be felt
in the economy of London. The purpose of this section is to provide a first assessment of the
extent of these potential impacts.
7.2 Outline of Methodology
This section is compiled from the output of two work phases within the project. These two
phases are: the Review Phase and the Consultation Phase. The Review Phase has surveyed
available literature in order to establish i) the way in which economic activities undertaken by
the private and public sectors might be expected to be impacted directly by climate change in
London, and ii) how climate change impacts in other parts of the world may impact on the
economic activities in these sectors in London.
The section is divided in the following way. First, climate change impacts associated with the
key sectors that have direct cross-sectoral roles - transport, energy and labour - are identified,
described, assessed in terms of their possible severity, and their amenability to adaptation.
Following this, the financial services, insurance, manufacturing, public administration,
tourist/creative, environmental business sectors are considered in the same way. There is then
an assessment of the possible consequences for economic development of climate change.
Comparative analysis with other large cities is undertaken where possible and global climate
change linkages are identified and assessed.