The urban heat island effect has cost Melbourne $300 million.

10 July 2014 — A new report by CDP, C40 and AECOM has revealed that the economic threat of climate change faced by cities and businesses within them is spurring local government action.

Protecting our capital: how climate adaptation in cities creates a resilient place for business is based on responses by 207 cities across the globe to the CDP’s annual survey, with most revealing that climate change presented a physical threat to businesses in their areas, and to their close to 400-million-strong population.

Damage to property and capital assets, transport and infrastructure destruction, and citizen wellbeing were among the top risks reported, with cited impacts including drought, intense rainfall, storms, floods, heat waves and sea level rise.

The City of Melbourne said heat related deaths in those over 65 were expected to double by 2020, rising from the current average of 289 deaths a year to over 580 by 2020 and over 980 by 2050.

The urban heat island effect was flagged by Melbourne as a significant contributor to CBD temperatures, costing the city around $300 million.

The City of Sydney, meanwhile, reported it was looking at the costs and benefits of solutions to reduce the urban heat island effect, such as with its collaboration with sustainability expert Michael Mobbs on cool roads.

Infrastructure and support services firm AECOM undertook the report analysis for CDP, and also provided expert insight into financing resilient infrastructure. Green and social infrastructure were flagged as keys to building long-lasting urban resilience, with investment needed from both the public and private sectors.

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AECOM associate director – sustainability Ben Smith said extreme temperatures were putting strain on essential infrastructure like electricity and transport networks in cities like Melbourne and Sydney, the only two Australian cities that participated in the survey.

“Both the City of Melbourne and the City of Sydney are facilitating action on climate change because they recognise that future climate impacts on businesses will depend on measures taken by business, councils and state governments working in collaboration to manage these risks”, Mr Smith said.

Larissa Bulla, head of CDP’s cities program said local governments were “storming ahead” to protect business and residents climate change impacts. Further collaboration with business, however, was needed to increase city resilience.

“Through the provision of information, policies and incentives, cities can help equip businesses to manage these risks and embrace the opportunities,” Ms Bulla said.

Key findings:

  • 76 per cent of cities reported that climate change could impact business
  • 75 per cent of the most severe physical risks from climate change that businesses disclose are also recognised by the relevant city
  • cities’ actions on climate change have reduced 129 of the 194 risks reported by businesses

Read the full report.