The 21st Century climate challenge

2Climate shocks: risk and vulnerability in an unequal worldFigure 2.3Climate disasters are driving up insured lossesAnnual insured losses (US$ billions)4035302520151050Source: ABI 2005b.Annual insured lossesFive-year moving average1970 1975 1980 1985 1990 1995 2000 2005to climate change, climate models predictsystemic decreases in rainfall in sub-tropicalareas—over 20 percent in some regions.The precise role of climate change in driving upthe number of people affected by climate disasteris also open to debate. Social factors have clearlycontributed. Population growth, the expansionof human settlements in hazardous areas—forexample, urban slums perched on fragile hillsidesand villages located in flood zones—andecological stress have all played a role in addingto risk exposure. However, climate hazards havealso increased. The record shows that droughts insub-Saharan Africa have become more frequentand protracted. Tropical storms have increased inintensity. Climate change may not provide a fullexplanation—but it is heavily implicated. 15Debates over attribution will continue.As shown in chapter 1, climate science doesnot provide certainties. However, uncertaintydoes not constitute a case for inaction. Theglobal insurance industry has been forced into aradical reappraisal of the implications of climaterisk for its business models (box 2.2). Acrossthe world, people are being forced to adapt toemerging climate risks in their everyday lives.For small-scale farmers, urban slum dwellersand people living in low-lying coastal areas theserisks threaten to become a powerful obstacle tohuman development.Risk and vulnerabilityClimate change scenarios provide a frameworkfor identifying structural shifts in weather systems.How those shifts are transmitted throughto human development outcomes is conditionedby the interplay of risk and vulnerability.Risk affects everyone. Individuals, familiesand communities are constantly exposedto risks that can threaten their well-being.Ill-health, unemployment, violent crime, ora sudden change in market conditions can, inprinciple, affect anyone. Climate generates adistinctive set of risks. Droughts, floods, stormsand other events have the potential to disruptpeople’s lives, leading to losses of income, assetsand opportunities. Climate risks are not equallydistributed, but they are widely disbursed.Vulnerability is different from risk. Theetymological root of the word is the Latin verb‘to wound’. Whereas risk is about exposure toexternal hazards over which people have limitedcontrol, vulnerability is a measure of capacityto manage such hazards without suffering along-term, potentially irreversible loss of wellbeing.16 The broad idea can be reduced to “somesense of insecurity, of potential harm peoplemust feel wary of—‘something bad’ can happenand ‘spell ruin’.” 17Climate change threats illustrate thedistinction between risk and vulnerability. 18People living in the Ganges Delta and lowerManhattan share the flood risks associatedwith rising sea levels. They do not share thesame vulnerabilities. The reason: the GangesDelta is marked by high levels of poverty andlow levels of infrastructural protection. Whentropical cyclones and floods strike Manila in thePhilippines, they expose the whole city to risks.However, the vulnerabilities are concentratedin the over-crowded, makeshift homes of theslums along the banks of the Pasig River, not inManila’s wealthier areas. 19The processes by which risk is convertedinto vulnerability in any country are shaped bythe underlying state of human development,78 HUMAN DEVELOPMENT REPORT 2007/2008