Ports at the forefront of climate impacts

We quantify the present-day climate risks to port globally from multiple natural hazards and operational disruptions. Results show that climate risks are mounting, totalling 7.6 USD billion per year, and can put large trade flows at-risk of being disrupted.
Published in Earth & Environment
Ports at the forefront of climate impacts
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It is needless to say that ports are important for the economy; they handle the vast majority of globe trade, are important hubs for industry and transport, and are large providers of employment. However, by their very nature, ports are located in hazard-prone areas along the coast and close to rivers. This makes them exposed to natural hazards and climate extremes, the occurrence of which are expected to become more frequent because of climate change.

Hazard impacts could not only cause physical damages to port infrastructure, but also disrupt port operations, which can have far-reaching consequences. For instance, Hurricane Katrina (2005) shut down three ports in the United States that handle almost half of the country’s agricultural exports. Similarly, the 2011 Tohuku earthquake and tsunami damaged maritime assets worth 12 USD billion, and led to a large trade bottlenecks at Japanese ports, which particularly hit the exports of vehicle manufacturing. As such, quantifying the likelihood of hazardous events happening and the potential economic implications associated with them is essential to prepare port authorities and other maritime actors for such impactful events.

Despite the importance of ports for the economy, the climate risks faced by ports has not yet been quantified on a global scale. In our recent study, published in Communications Earth and Environment (https://www.nature.com/articles/s43247-022-00656-7), we do exactly this. We constructed a new geospatial database of port infrastructure assets (covering terminals, warehouses, industry, breakwaters, roads, railways and electricity transmission) for 1340 of the most important ports globally. We combined this with the most detailed information on natural hazards we could get access to, including earthquakes, cyclones and pluvial (i.e. rain), fluvial (i.e. river) and coastal flooding. Moreover, we collected localised information on (non-cyclonic) wind speeds, waves, temperature and overtopping, which we call marine extremes. While natural hazards can cause physical damages to port infrastructure, resulting in both reconstruction costs and operational downtime due to reconstruction, marine extremes can cause operational downtime without physical damages. The physical damages and revenue losses to logistics operations (terminal operators, carriers, shippers) as a result of downtime combined is what we call the climate-related risk to ports (though technically speaking earthquakes are geophysical hazards). 

We find that marine extremes can cause operational disruptions to around 40% of ports globally, while 50% of ports globally are exposed to four of five natural hazards (out of the five considered). Taken together, 86% of ports are exposed to more than three hazard types (natural hazards and marine extremes), with fluvial and pluvial flooding the most prevalent ones. This indicates that ports have to take multiple hazards into consideration for the design and operations of infrastructure. For instance, the foundations of quay walls need careful consideration when exposed to earthquakes, the orientation and design of breakwaters when exposed to extreme waves and surges, and the drainage system when exposed to fluvial and pluvial flooding.

The climate risk totals 7.6 USD billion per year, most of which attributed to tropical cyclones and fluvial flooding. This number is over half as large as a previous estimate of the climate risk of road and rail infrastructure on a global scale, illustrating that although ports only encompass relatively small areas, the high value and density of assets can contribute to the climate risk on a national and global scale.

 

Figure 1. The climate risk to ports globally. (a) Port-level results with the size of the marker showing the magnitude of risk and the colour indicating the dominant hazard type. (b) The top 50 most at-risk ports, including the uncertainty in the climate risk estimates (error bar). 

The largest climate risks in absolute terms are faced by large ports in Asia, ports in the Gulf of Mexico, and ports in Western Europe given the large areas of valuable infrastructure exposed. In relative terms (that is per square meter of port area), however, the highest risks are faced by ports in middle income countries. Despite the absolute risk being particularly large in high-income countries, ports in high-income countries have the financial resources to take protective measures (e.g. higher flood protection standards, elevated terminals) to reduce risk in relative terms, compared to middle income countries.

While the reconstruction costs of terminals, cranes and warehouses are the leading contributor to climate risk, damages to the critical infrastructure (roads, rail, electricity) in the port vicinity is still an important contributor to global climate risk (20%). On a port-level, it is the leading risk contributor for 12% of ports, in particular in the United States and Western Europe, mainly due to flooding of road and railway assets. As such, flood risk management of critical infrastructure assets in the port’s vicinity should therefore be an integral part of risk management, requiring collaboration between the different entities responsible for maintaining the infrastructure.

When combining the risk of operational downtime with a dataset of port throughput, we further quantified the amount of trade that is at-risk every year of being disrupted. In total, this amounts to 67 USD billion per year, almost ten times larger than the climate risk. While the absolute trade risk is prevalent in large ports in cyclone-prone regions, which experience frequent shut downs, the relative trade risk (relative to the value of trade) is high in ports serving small island developing states (SIDS), which are disproportionately reliant on maritime trade.

 

Figure 2. The trade risk of ports globally. (a) Port-level results of the trade-at risk. (b) The relative trade risk for SIDS economies versus the rest of the world (ROW). (c) The relative trade risk across income groups, (d) The top 40 countries with the highest relative trade risk. 

This fact, combined with the findings of the absolute and relative climate risks, poses a twin problem. On the one hand, large ports in upper middle and high-income countries need to make sizeable investments to manage their risk in light of increasing climate change, which could become prohibitively expensive. On the other hand, infrastructure upgrades are needed to protect small ports in low-income countries and SIDS from hazard impacts and frequent disruptions, which can have systemic impacts to economies they serve. At these ports, the impacts of climate change on economic activity can be reduced by improvements to infrastructure to make them more disaster-resilient and ensure year-round operations. Luckily many initiatives are ongoing to upgrade outdated and inefficient port infrastructure at many of these ports.

Altogether, our insights show that ports are at the forefront of climate impacts. Although not quantified in this study, climate change and the need for new port infrastructure given growing demand for trade will likely increase the climate risk in the near future. As such, adaptation of ports is urgently needed, and quantified risk analysis as presented in our paper can help in prioritising investments and help make the business case to accelerate adaptation finance.  

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