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The Climate Change Spending Gap

A study finds huge disparities in how global megacities are investing in order to adapt.

French student Alienor Saguez rides a Velib bike-sharing program in Paris. (AP Photo/Francois Mori)

Governments around the world spent $323 billion last year to adapt to climate change, and a large share of that went to battening down metropolises. But cities in wealthy countries spent exponentially more than those in the developing world, a new study published in Nature Climate Change finds. Wealth, more than human life, seems to be driving the adaptation economy.

Researchers at the University College of London and the British data research firm kMatrix Ltd. analyzed the amount that 10 megacities (defined as cities populated by more than three million people, or with a GDP ranking in the world’s top 25 cities, or both) spent on adaptation and resilience measures from 2014 to 2015. Measures included (but weren’t limited to) boosting professional and health services, new technology for risk modeling, stronger infrastructure, beefed-up drainage systems, and improved coastal defenses.

There were significant differences in how developing and wealthy cities spent their money, which the chart below lays out. The authors explain:

The greater spend on agriculture and forestry, the natural environment, and in some cases health demonstrates the very different profile of needs in developing-country cities compared with established global financial centres, where professional services, built environment, energy, and water dominate.

Adaptation spending by sector. (Nature Climate Change)

More striking, however, is not what the cities paid for, but how much they spent. In absolute terms, and relative to their population size and GDP, the range is just stunning.

New York City was the highest spender overall, putting down about $2.3 billion, or $270 per person, for its climate response. Paris and London both spent between $1.3 and $1.4 billion total. Per capita, that worked out to $563 per person in Paris (the highest in the study) and $167 per person in London.

On the lowest end of the scale was the Ethiopian capital of Addis Ababa, which spent $15 million total, less than $7 per capita. Lagos and Jakarta were the second- and third-lowest spenders, respectively, putting down $74 million and $208 million total, or $8 and $22 per capita. To put it in other terms: New York City spent roughly 34 times as much as Lagos did.

Most cities in developed countries spent about .22 percent of their GDPs on adaptation measures, with the exception of Beijing, which spent .33 percent. Cities in developing countries spent roughly just .15 percent of their GDP.

Total spending (top) and per capita spending (bottom).
(Nature Climate Change)

These numbers aren’t reassuring. Many developing countries are already highly vulnerable to climate change’s risks. The number of highly vulnerable people will only continue to increase, as the some of the greatest population growth over the next several decades will be in China, India, Ethiopia, and Indonesia.

Perhaps even more concerning, the striking disparities in per capita spending between wealthy and poor cities suggests that, so far, the world’s climate adaptation response has been about protecting physical capital, rather than human lives.

“You might expect that cities like New York are spending a lot more on climate change adaptation,” Lucien Georgeson, the paper’s lead author and UCL PhD candidate, told Carbon Brief. “But the fact that they’re spending more as a percentage of their GDP and much more per capita shows you that adaptation spending now is not necessarily always to protect people that are at risk. It might be to protect the infrastructure and the insurance risks.”

Perhaps that’s not a surprising revelation, but it is a reminder to policymakers and international organizations to focus on where people, not properties, are most exposed to risk. Funding adaptation measures for developing countries was a major focus at the UN climate talks in Paris last November, and it will continue to be an urgent question as the dangerous effects of climate change appear in the poorest corners of the world.

About the Author

  • Laura Bliss
    Laura Bliss is a staff writer at CityLab. She writes about the environment, infrastructure, and cartography, among other topics.