Several States in Mexico at Risk from Climate Change: XDI

In its first-ever comparison of physical climate risk to the built environment, the Cross Dependency Initiative (XDI) ranked Guanajuato as the Mexican state at most risk of infrastructural damage from extreme weather events and climate change. 

XDI presented the second edition of its Benchmark Series: the 2023 Gross Domestic Climate Risk. The report ranked the physical climate risk to the built environment in over 2,600 states and provinces around the world. The study aims to measure damage to the built environment from extreme weather and climate change events, including from floods, forest fires and sea level rise with modeled projections. The report provides a deeper understanding of how climate change might affect long-term projections for numerous cities by estimating a Damage Ratio, a measure that provides a comparable assessment of extreme weather and climate risk.

XDI describes Damage Ratio as “an expression of the Annual Average Loss from extreme weather damage to a property as a fraction of the replacement cost of that property.” The calculation is derived from a ratio to estimate physical risk and is unaffected by exchange rates, inflation and other variables. The estimates do not account for increases in building stock over time, according to 2023 XDI Gross Domestic Climate Risk.

The firms’ estimated Aggregated Damage Ratio, which measures the amount of damage to the built environment in a particular province, ranked Guanajuato as the state most at risk in Mexico of extreme weather events. Out of the 2,600 studied regions, Guanajuato ranked in 142nd place in Aggregated Damage Ratio, followed by the State of Mexico in 185th place and Chiapas in 188th place. On the other hand, Colima was the Mexican state deemed to be at less risk, ranking in 1,514th place. Next came Baja California Sur in 1,211th place. 

The study also calculated Average Damage Ratio to evaluate the widespread damage in states and provinces with fewer properties, where the proportion of damage is higher. In this case, Campeche, Durango and Quintana Roo proved weakest out of Mexico’s 32 entities. While Tlaxcala and Colima had better results. 

XDI also presented a rank based on the increase in Damage Ratio from 1990 to 2050, where Guanajuato appeared in 69th place globally, making it the most exposed entity in Mexico. Michoacan, Aguascalientes and San Luis Potosi followed in the list. 

The Gross Domestic Climate Risk considers the potential risks caused by riverine and surface flooding, coastal inundation, extreme heat, forest fires, soil subsidence (in drought), extreme wind (synoptic and tropical cyclones) and freeze thaw. However, it does not include the social, environmental and economic effects of climate change, which include water shortages, impacts on agricultural production, biodiversity or human wellbeing. The study does not present growth of building stock nor human population density either, explained XDI. 

“We are releasing this analysis in response to demand from investors for data on sub-sovereign and regional risk. This is the first time there has been a physical climate risk analysis focused exclusively on the built environment, comparing every state, province and territory in the world. Since extensive built infrastructure generally overlaps with high levels of economic activity and capital value it is imperative that the physical risk of climate change is appropriately understood and priced,” says Rohan Hamden, CEO, XDI, via a press release.