Sunk Costs: Airports Taking Action Against Rising Seas, Storms as Climate Changes

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 canceled 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 $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.

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