A decade ago, three of the world’s great wheat-growing regions were struck, in the same year, by separate weather disasters. Russia endured a heatwave that affected over a third of its cultivable land. Harvest rains reduced Canada’s wheat quality to that of animal feed. In Western Australia, intense drought shrank wheat production. Normally, regions buffer each other. But this time, multiple failures led to export bans. Prices spiked.

Hunger, a disaster in itself, can have knock-on effects such as political unrest and migration. It would therefore be useful to know whether, as climate changes, extreme weather will increasingly affect multiple places at once.

Physical risks

The economies of South and Southeast Asia are most vulnerable to the physical risks associated with climate change. At the same time, these are also the countries that stand to gain the most if the world succeeds in containing temperature increases. Many developed economies in the Northern Hemisphere are less vulnerable because they are less exposed to adverse developments in weather patterns associated with climate change and have better resources to cope. Nevertheless, supply chains and global trade are at risk.

Transition risks

Climate change also poses transition risks, and again Asia may be the most affected. Transition risks can manifest themselves, for example, in large changes in asset values and higher business costs as the world transitions to a low-carbon economy, and can have significant financial and economic impacts.