The CWR Survival Guides to Avoiding Atlantis

By China Water Risk 24 November, 2020

Seas are rising faster than we think – how will 20 APAC cities that generate US$5.7trn of GDP be affected?

Urban real estate equivalent to 59 Singapores will be underwater without serious adaptation measures if we continue with business-as-usual according to the CWR APACCT 20 Index; and that’s just for 20 cities
SLR as high as 3m is plausible by 2100 - this will paralyse trade-reliant APAC economies; these 20 cities drive ~25% of global sea & air cargo volumes but 20 ports & 12 airports will be underwater at 3m
Not all govts facing high threat levels are taking action so all vulnerable assets must be revalued as rising seas turn cities from “freehold to leasehold”, else banks may fail. CWR’s survival guide shows how to avoid Atlantis

Hong Kong, 23rd November 2020 – CWR releases a series of “survival guides” to avoid Atlantis in its Coastal Capital Threat Series, which benchmarks risks for 20 coastal capitals and economic hubs in APAC from Tokyo to Sydney. According to CWR, urban real estate equivalent to 59 Singapores will be underwater without serious adaptation measures if we continue with business-as-usual. And that’s just for 20 coastal cities.

Seas are rising faster than we think so CWR has curated a “survival guide” series of five reports to help avoid this dire future. The five reports include an overview of the latest science on rising seas; a ground-breaking CWR APACCT 20 Index to benchmark risks; physical threats levels of 20 APAC cities; what governments are or are not doing to protect from existential threats; analyses of sovereign and clustered financial risks from GDP and trade to bank loans; as well as next steps and to-do lists for multiple stakeholders to waterproof APAC.

Running out of time to protect APAC cities

We think we have more time to avoid Atlantis, but we don’t. We will likely hit 1.5°C of warming by 2030. Reaching this 70 years earlier than the intended Paris Agreement target date of 2100 means we will feel the impact of rising seas sooner. As it is, we are already 1.1°C warmer than the pre-industrial period.

“Bangkok & Jakarta could be permanently submerged by 1.94m & 2.37m respectively by 2050…

Instead of 1m, ice experts now say that sea level rise as high as 3m is plausible by 2100. Unfortunately, as many cities are sinking and face typhoons across APAC, coastal threats will be felt sooner. According to CWR, ASEAN cities like Bangkok and Jakarta could be permanently submerged by 1.94m and 2.37m respectively by 2050.

Elsewhere in typhoon prone North Asia, both Hong Kong and Tokyo could see storm tides of 5.5m+ today if typhoons arrive at high tide.

storm tides plus rising seas could reach 10m+ by 2100 for Hong Kong”

Costs from storms are set to balloon – just seven typhoons between 2017 and 2019 cost APAC US$60bn, yet CWR estimates that storm tides plus rising seas could reach 10m+ by 2100 in their worst-case scenarios for Hong Kong.

According to CWR’s reports, a person standing in front of the AIA, Hong Kong Club, HSBC, Mandarin Oriental or Standard Chartered buildings in the city’s Central financial district will be hit by waves as high as 5.69m.

We’re not prepared: APAC impacts are severe & clustered

“If we are not prepared, APAC’s coastal capitals will become the new Atlantis. Impacts are severe as they are clustered – around 3m of SLR will paralyse trade-reliant APAC economies and wipe out millions of homes and jobs”, warned Debra Tan, the Head of CWR. “Just 20 coastal cities in our CWR APACCT 20 Index drive around a quarter of global sea and air cargo volumes; yet at 1.5°C we’d lock-in the loss of 20 ports and 12 airports that serve these cities. This clearly puts the recently inked RCEP trade deal at risk” she adds.

Managing coastal threats is integral to avoiding Atlantis. As part of its survival guide, CWR worked with the financial sector to develop the CWR APACCT 20 Index for 20 coastal capitals and economic hubs. Over 100 finance professionals from chairs/directors of bank boards to credit/equity research analysts plus financial industry associations, asset owners and financial regulators helped build this inaugural index which not only benchmarks physical coastal threats but also government adaptation action to protect cities as it can reduce risks.

“At 4°C 100mn people will lose their homes, urban real estate equivalent to 59 Singapores will be underwater…

…plus all 23 ports and 23 out of 25 airports will be permanently submerged…for just 20 coastal cities”


The risk snapshot CWR provides is sobering. CWR’s index shows that rising seas will cause 28 million people to lose their homes, urban real estate equivalent to 22 Singapores will be underwater. And this is under the best-case scenario of 1.5°C, which we will lock-in in 10 years’ time.

Inaction means our current climate path of 3°C-5°C will send us headlong into a dire future – swathes of APAC will be underwater – the 4°C CWR APACCT 20 Index shows that over 100mn people will lose their homes, urban real estate equivalent to 59 Singapores will be underwater plus all 23 ports and 23 out of 25 airports will be permanently submerged without serious adaptation measures. And that’s just for 20 coastal cities.

“These sea level rise impacts were supposed to hit us a few hundred years in the future but now we may feel the locked-in impacts of 1.5°C as early as 2100, and for 4°C by 2200.” said Tan. Latest research released this year indicates that Greenland and Antarctica are losing ice 6x faster than they were in the 1990s plus our oceans have warmed at an alarming rate, equivalent to dropping 5 Hiroshima bombs per second into the ocean for the last 25 years. Both accelerate rising seas. Given this grim future, “APAC must move to implement no-regret adaptation for locked-in impacts at 1.5°C plus commit and fast-track carbon neutrality to avoid 4°C” urged Tan.

No-sense strategies: Governments not taking action despite high exposure warrant sovereign re-rating

“CWR’s index rankings reveal unexpected behaviour – not all governments are taking action to protect their cities despite high exposure to coastal threats”

Yet, CWR’s index rankings reveal unexpected behaviour – not all governments are taking action to protect their cities despite high exposure to coastal threats. At the bottom, at No.20, is Taipei in the 1.5°C CWR index; and Macao in the 4°C CWR index. Surprisingly, other cities with lacklustre adaptation despite high vulnerability are Hong Kong and Tokyo.

At the top, Singapore leads the pack: No.1 in both 1.5°C and 4°C CWR APACCT 20 Index rankings – it’s spending over SGD100bn on adaptation including raising critical infrastructure by 5m. Shanghai, Shenzhen and Guangzhou, are all vulnerable but their adaptation efforts including reinforcing and building sea walls see their rankings materially improve. Jakarta’s extreme plans of moving its administrative capital plus building sea walls and polders see it to the Top 5.

CWR’s analysis also reveals that not all cities from the same country are taking the same amount of action despite significant GDP at risk. If this continues, the region will be in for a hard landing. As Dharisha Mirando, lead author of the series stated “The high concentration of financial risks is concerning. In APAC, people, assets and GDP are clustered in coastal capitals and key cities – the 20 APAC cities in our index generate US$5.7trn of GDP per annum, this is greater than the combined GDP of Germany and Canada.”

“Our analysis has led us to put Japan, Hong Kong, Macao and Taiwan on our watchlist”

-Dharisha Mirando

Mirando further cautioned that These cities drive their national/territorial GDP – around 20% plus more for Tokyo, Seoul, Sydney, Auckland, Bangkok, Manila and Taipei to 100% for Hong Kong, Singapore and Macao. Such levels have implications for sovereign credit risk. Our analysis has led us to put Japan, Hong Kong, Macao and Taiwan on our watchlist. These governments should step up action to protect their cities, especially since they can afford to.”

Highly concentrated risks could trigger financial collapse

Risks expand beyond GDP and trade. CWR’s reports reveal bank loan books, markets and pension funds are also clustered and exposed to coastal threats. Central banks and financial regulators are taking action to address climate risks and credit rating agencies have also started to warn of coastal threat implications for sovereigns. But chronic risk assessments and inclusion of coastal threats in valuations have yet to manifest. This missing chunk of chronic risks results in an incomplete APAC risk snapshot that perpetuates a vicious cycle – capital continues to be deployed to vulnerable locations while ongoing investments in carbon intensive industries further exacerbates vulnerability.

“Sooner or later, we must bite the bullet and discount terminal values… This is finance 101; not natural capital accounting”


-Debra Tan

Banks are acting with recent carbon neutrality pledges but CWR says they are not acting fast enough. “The longer we ignore chronic tail risks, the worse it becomes. Sooner or later, we must bite the bullet and discount terminal values – the permanent overhang from rising seas effectively turns the valuations of all vulnerable assets from “freehold” into “leasehold”. This is finance 101; not natural capital accounting. Don’t just prioritise carbon transition risks – banks must start to assess and spread physical coastal threats plus ensure capital adequacy said ex-banker Tan.

Governments & central banks must act to waterproof APAC

Indeed, the statistics in CWR’s reports are compelling as they are shocking; a much needed urgent wake up call to action. With so much at stake, CWR hopes that all stakeholders use their 3-step survival guide – Step 1: Get on top of existential threats; Step 2: Assess exposure; and Step 3: Take action to waterproof APAC with tailored to-do lists for different stakeholders.  Sounds simple right?  As Tan summarised It’s time for finance and governments to make sensible plans to ensure that APAC is ready and can survive capital threats and systemic shocks ahead. Together we must waterproof APAC to avoid Atlantis. The alternative is unthinkable”.

Recommended next steps:

  1. Read “Waterproofing APAC to Avoid Atlantis” for an overview of what you need to know about the changing risk landscape, how to assess threat exposure and next steps;
  2. Use the CWR APACCT 20 Index to gauge relative coastal risks by seeing index rankings of 20 APAC cities for various scenarios; See who the 100+ finance experts were that inputted into the development of the index and what they had to say in “Avoiding Atlantis: CWR APACCT 20 Index”;
  3. Assess absolute risk exposure to each of the 20 APAC cities using the “CWR APACCT 20 Index City Factsheets”;
  4. Use our How-to-Guides in “Changing Risk Landscapes: Coastal Threats To Central Banks” to conduct in-depth analysis of SLR, subsidence and storm risks for hotspots;
  5. Assess what governments are doing to protect cities in hotspots compared to what’s at risk in terms of GDP “Sovereigns at Risk: APAC Capital Threats”;
  6. Understand actions by financial regulators as they will act to avoid the lethal cocktail of 1) no-sense climate strategies; 2) over-valuation of all assets in vulnerable cities; and 3) concentrated financial risk, which can trigger financial collapse;
  7. Supplement the analysis with other recommended tools – the CWR APACCT 20 Index was created to plug a gap in the existing toolbox, but this does not mean the other tools are not useful; and
  8. Follow our to-do list for all stakeholders as well as the more specific next steps for central banks & financial regulators, asset owners & asset managers, banks, and governments.
See infographics & quick stats pack




CWR Coastal Capital Threat Series

  • Surviving Rising Seas – 20 APAC Cities: Who’s ahead & Who’s Behind? – The homes of 28mn to 100mn+ residents could be submerged in just 20 APAC cities. Which cities are more prepared? We walk you through the Top 5 Most Proactive & the Bottom 5 Laggards in our CWR APACCT 20 Index
  • CWR APACCT 20 Index – Finance Sector Input On Methodology – Coastal threat assessment can be complex & daunting, so we did the heavy lifting by creating the index. But we did not do this alone – 100+ finance experts helped. See who they were & how feedback shaped the index
  • Sovereigns At Risk: Lots Of Capital In Vulnerable Spots – Clustered nature of rising coastal threats plus lax govt action put APAC sovereigns at risk. CWR’s analysis of GDP, trade, markets & bank loans reveal intense concentration of risks. As no-sense strategies pervade, see who’s in CWR’s watchlist
  • Existential Coastal Threats: 8 Things You Must Know – Rapid SLR will happen sooner than we think, yet we are still driving investments to vulnerable locations. CWR’s Debra Tan shares 8 things you need to know about the existential threat from SLR – from glaciers in the mountains to ice sheets in our poles, permafrost + more

Further Reading

  • Future SLR Projections & Biggest Worries – In this follow up interview, HKU’s Dr. Nicole Khan shares her biggest concerns on how future SLR projections are rising higher & faster than thought & shares the best approach for building realistic scenarios
  • It Happened – Central Banks And Water Risks – Half a dozen new reports by the NGFS means that CWR has achieved a key milestone in embedding water risks in finance. Debra Tan and Dharisha Mirando expand on these game-changing moves by the central banks. The credit evolution has started
  • Capital Threats Remain Post COVID – There is no vaccine for climate & water risks, yet some in the financial sector are still burying their heads. CWR’s Dharisho Mirando reminds us how our capital is at risk & steps we can take to reduce them while going green
  • Asia, Why On Earth Would We Leave Our Future To G7? – With G7’s absent leadership & inability to plan for pandemics, CWR’s Debra Tan calls for Asia to step-up & lead the global fight against our climate crises. Tycoons, think about it – what’s the point of building empires that will kill your grandchildren?
  • Thirsty And Underwater: Rising Risks In Greater Bay Area – How will water & climate risks, including rising sea levels & droughts, threaten the already water-stressed Greater Bay Area (GBA)? CWR’s Tan & Mirando explain in their latest CLSA report and highlight companies’ failure in climate risk disclosures
  • No-Sense Climate Strategies: From DSD To HSBC – Hong Kong’s shortsighted & unrealistic climate plans will leave key assets & infrastructure exposed that mean the government, companies, investors and the public are even more exposed. China Water Risk’s Dharisha Mirando & Debra Tan expand
  • Are Asia’s Savings Exposed To Water & Climate Risks? – Asian asset owners have portfolios skewed towards domestic markets that will bear the brunt of climate change. Find out about these risks and what to do as our Dharisha Mirando shares key takeaways from the new report China Water Risk co-authored with Manulife Asset Management & the Asia Investor Group on Climate Change


China Water Risk
Author: China Water Risk
We believe regardless of whether we care for the environment that water risks affect us all – as investors, businesses and individuals. Water risks are fundamental to future decision making and growth patterns in global economies. Water scarcity has emerged as a critical sustainability issue for China's economy and since water powers the economy, we aim to highlight these risks inherent in each sector. In addition, we write about current trends in the global water industry, analyze changes occurring both regionally and globally, as well as providing explanations on the new technologies that are revolutionizing this industry.
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