Sunk costs: Airports taking action against rising seas, storms as climate changes
SINGAPORE: Global airport operators, faced with rising sea levels and more powerful storms as the climate changes, are starting to invest in measures including higher runways, seawalls and better drainage systems to future-proof immovable assets.
In early September, a seawall at Japan’s Kansai International Airport built on a reclaimed island near Osaka, was breached during Typhoon Jebi.
The runway was flooded and it took 17 days to fully restore airport operations, at a high cost to the region’s economy as well as the dozens of airlines that cancelled flights.
Major airports in Hong Kong, mainland China and North Carolina were also closed due to tropical storms last month.
Such incidents highlight the disaster risks to investors and insurers exposed to a sector with an estimated US$262 billion of projects under construction globally, according to Fitch Solutions.
“There is a kind of one-way direction with regards to the frequency and severity of climate change-related events,” said Fitch Solutions Head of Infrastructure Richard Marshall.
“If people aren’t taking that seriously, that is a risk.”
Fifteen of the 50 most heavily trafficked airports globally are at an elevation of less than 30 feet above sea level, making them particularly vulnerable to a changing climate, including rising sea levels and associated higher storm surges.
“You see it at individual airports that are already seeing sea rise and are already dealing with water on their runway,” Airports Council International (ACI) Director General Angela Gittens said, citing examples in island nations including Vanuatu and the Maldives.
“But even in some of these mature economies they are having more storms, they are having to do more pumping. My old airport in Miami is in that scenario.”
A draft copy of an ACI policy paper reviewed by Reuters and due to be released this week warns of the rising risks to facilities from climate change.
It encourages member airports to conduct risk assessments, develop mitigation measures and take it into account in future master plans.
The paper cites examples of forward- thinking airports that have taken climate change into account in planning, such as the US$ 12 billion Istanbul Grand Airport on the Black Sea, set to become one of the world’s largest airports when it opens next month.
Debt investors in particular have high exposure to airports, most of which are owned by governments or pension funds. Ratings agency Moody’s alone has US$174 billion of airport bonds under coverage.