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Inescapably intertwined: the reality of globalization and borderless climate risks

Living in an era of growing interconnectedness, it is time to admit: climate adaptation isn't only a matter of national policy. Climate change does not respect national borders and adaptation efforts are unlikely to succeed if done in geographic isolation. The Transnational Climate Impacts Index (TCI Index) examines country exposure to climate change from an international perspective.

Date published
17 June 2018

Our lives are defined by globalization and hyper-connectivity. We have never been more interdependent. The economic crisis of 2008, which started as a financial bubble in real estate in the US before crippling much of the global economy, is one example of this. The global decline in bee populations linked to commonly used agricultural chemicals – and the corresponding threat to food production – is another. There are many more.

Climate change acutely demonstrates this connectivity –  it clearly shows that actions in one place have consequences elsewhere. Carbon intensive industrial development, mostly in affluent economies, has disrupted the balance of greenhouse gases in the atmosphere, causing arctic ice melt and global sea level rise, which threatens to inundate countries like Samoa and the Seychelles. The countries that will suffer the biggest impacts of climate change are often those that have benefited least from a carbon intensive lifestyle.

What’s more, because of global interdependence, actions we undertake to manage the effects of climate change could have repercussions in other places. In other words, climate adaptation is unlikely to be successful if pursued in geographic isolation. Adaptation for some may generate risk for others, and failure to adapt in one place will also create or magnify risk for other people, places and markets.

To date, however, climate adaptation policy has been considered a local issue, and countries currently know very little about how they might be exposed to climate impacts from abroad. That is why a team at the Stockholm Environment Institute developed the global Transnational Climate Impacts Index (TCI Index).

The index provides a framework for examining exposure to climate change impacts from an international perspective.

Unlike traditional vulnerability-focused indices, the TCI Index opens up a number of questions about how national adaptation planning can account for global interdependence and cross-border risk.

Conceptual compass

Countries are connected in many ways. The TCI team at SEI identify four climate risk pathways, each of which describes cross-border flows that might be disrupted by climate change impacts:

  • Trade – changing prices, availability and quality of goods and services via international supply chains and global markets;
  • Biophysical – transboundary ecosystems, such as international river basins, oceans and atmosphere. Here impacts on one part of the ecosystem can affect all the countries that are sharing it;
  • People – changes in the pattern of migration and tourism flows;
  • Finance – the effects of climate change impacts on the flow of capital, including private and public investments and remittances.

Some climate impacts will spill over across borders to affect neighbouring countries. The TCI framework calls this the “transboundary dimension” of climate risk. Others will propagate via more complex international networks, such as investments and markets, over greater distances: this is the “teleconnected dimension”.

The TCI Index combines nine different indicators of exposure at the country level, comparing 192 countries. The nine indicators are shown in this table:

Pathway Indicator
Biophysical Transboundary water dependency ratio
Finance Bilateral climate-weighted foreign direct investment
Remittance flows
People Openness to asylum
Migration from climate vulnerable countries
Trade Trade openness
Cereal import dependency
Embedded water risk
Global context KOF Globalization Index

The SEI team have applied the index on a global scale. The results show that many countries that do not rate as “particularly vulnerable” to direct climate change impacts are highly exposed to transnational risks, such as the Benelux countries, Germany, and the Scandinavian states.

Since globalisation is a key factor in transnational climate risks, less-developed economies may score lower on some TCI indicators. However, several factors can lead to higher TCI scores, as evidenced by several developing and emerging countries that are small (e.g. Gambia, Fiji), landlocked (e.g. Tajikistan, Swaziland, Armenia), and highly trade-dependent (e.g. Malaysia and Thailand). The four highest-scoring countries are in the Middle East: Jordan, Lebanon, Kuwait and United Arab Emirates.

Automatic bank machine

In this visual story we zoom in to a country-level results for a sample of four countries: a small island developing state – Fiji; a regional hub in East Africa – Kenya; a small, high income, globalised country – Sweden; and a lower income country in West Africa – Senegal.

These diagrams present the indicator scores for individual countries. In the inner circles, results are shown for each of the nine indicators, relative to the rest of the world. A fully coloured “wedge” indicates that a country is in the top 10% of all countries worldwide for exposure on that particular indicator; a single bar suggests it is in the bottom 10% in terms of exposure.

The coloured ring on the outside of the diagram shows the relative importance of the different climate risk pathways from the country’s own perspective: for example, the more orange in the outer ring, the more important trade-related risks are for that country.

It’s all connected

TCI risk evaluations provide countries with a starting point for designing strategies to predict and prevent risks that are posed by climate change outside of their national borders. Using the TCI Index, countries can identify priority areas for detailed analysis at the country level and begin to identify countries they should partner with as well as types of risks they need to consider in future adaptation strategies.

But beyond self-centered motivation, the TCI Index analysis shows that all actors need to work together to build climate resilience in global systems, including trade networks and financial markets.

The Paris Agreement under the United Nations Framework Convention on Climate Change provides new opportunities to recognise and negotiate solutions that embrace the global nature of adaptation, but there is also much to do in other international frameworks, and by national governments , investors, banks and multinational companies too.

In this sense, climate change represents an opportunity to recognise our interdependence in every sense of the word. In an era characterised by globalisation, our fates are inescapably intertwined. It’s time to embrace this reality.

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