G7 economies increasingly exposed to climate risks through globalised supply chain

The report argues that G7 economies face significant economic risks due to the interconnectedness of global supply chains, where climate-driven disruptions in production hubs—particularly in Africa, Asia, and Latin America—transmit shocks to industrialised nations. It cites examples such as the 2011 Thailand floods and recent flooding in Durban, South Africa, to illustrate how extreme weather causes global price spikes and production delays. Specific analyses for the US, Germany, UK, and Japan reveal vulnerabilities in sectors ranging from ICT and automotive manufacturing to food security. The document concludes that because labour cost differentials continue to drive the offshoring of production, G7 nations must cooperate globally and fulfill adaptation funding commitments to secure their own supply chains.

• Global supply chains transmit climate risks across borders, meaning extreme weather at production sites causes disruptions far beyond the source. The 2011 Thailand floods, for instance, caused USD 40 billion in local damages and led to a 2.5% reduction in global industrial production, with hard disk drive prices increasing by 80%-190%.
• Coastal infrastructure is highly vulnerable to sea level rise, with approximately 90% of global freight moving by ship. Adapting the world's 2,738 coastal ports to these risks could cost between USD 22 billion and USD 768 billion by 2050.
• The United States faces specific supply chain vulnerabilities: nearly one-third of its largest airports have runways at risk from storm surges, and the ICT sector is exposed to trans-border risk due to its reliance on Chinese manufacturing concentrated in high-flood risk eastern river basins.
• Germany's economic risks from climate change largely stem from regions outside the EU. Projections for 2050 suggest a GDP decrease between 0.01% and 0.35% annually and welfare losses between 0.11% and 0.36% annually, with heat stress in Southeast Asia alone potentially triggering GDP losses of 0.41% to 0.46%.
• The UK's food security is threatened by its reliance on imports from over 160 countries, with 18% of fruit and vegetables coming from highly or moderately vulnerable nations like India, South Africa, and Brazil. This vulnerability could lead to food price increases of 20% by 2050.
• Japan is vulnerable to climate risks in Southeast Asia for its electronics and automotive sectors, and to US climate risks regarding agricultural imports, specifically feed for meat production.

APA

Team, Z. (2022). G7 economies increasingly exposed to climate risks through globalised supply chain. Zero Carbon Analytics. https://zerocarbon-analytics.org/finance/g7-economies-increasingly-exposed-to-climate-risks-through-globalised-supply-chain/

Chicago

Team, ZCA. G7 economies increasingly exposed to climate risks through globalised supply chain. Zero Carbon Analytics, 2022. https://zerocarbon-analytics.org/finance/g7-economies-increasingly-exposed-to-climate-risks-through-globalised-supply-chain/.

Wikipedia

{{cite report |last1=Team |first1=ZCA |title=G7 economies increasingly exposed to climate risks through globalised supply chain |publisher=Zero Carbon Analytics |date=16 June 2022 |url=https://zerocarbon-analytics.org/finance/g7-economies-increasingly-exposed-to-climate-risks-through-globalised-supply-chain/ |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{team2022economies, author = {Team, ZCA}, title = {{G7 economies increasingly exposed to climate risks through globalised supply chain}}, institution = {Zero Carbon Analytics}, year = {2022}, month = jun, url = {https://zerocarbon-analytics.org/finance/g7-economies-increasingly-exposed-to-climate-risks-through-globalised-supply-chain/}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }