Book Demo

Reshaping Paris: Climate Perils of the Grand Project

Nestled beneath the shadow of the majestic Eiffel Tower, Paris's zinc-top roofed buildings stand as a testament to its rich urban landscape. However, even this iconic city is not immune to the escalating climate risks threatening our planet.

Paris risks transforming into a sweltering furnace, with forecasts projecting temperatures as high as 50°C by 2050, posing severe risks to the population.

Shockingly, the French capital currently holds the highest temperature-related mortality rates across all age groups, with those over 85 years old experiencing 1.6 times the excess mortality.

To combat this growing, climate-driven crisis, Paris has embarked on a visionary Climate Action Plan to achieve carbon neutrality by 2050 and effectively address the increasing threats of flooding, heatwaves, and droughts.

Ahead of the highly anticipated 2024 Olympics, the city has taken significant steps such as planting over 25,000 trees from November 2022 to April 2023, including 800 new trees lining the streets.

Additionally, authorities have initiated the renovation of social housing, targeting reduced energy consumption in winter and lowered temperatures in summer through the Eco-rénovons Paris+ scheme.

Although these initiatives are only fragments of a larger puzzle, they are crucial in realising the comprehensive Climate Action Plan.

The Grand Vision

As the reality of climate risks looms large, Paris must embrace adaptation as a fundamental imperative.

Anticipating and mitigating the effects of climate change requires strategically reallocating space within the city, embracing nature reserves and water bodies, and integrating green infrastructure on rooftops, streets, and squares to provide shade and combat rising temperatures.

By 2030, an operational action plan will be implemented to reduce GHG emissions by 50%, reduce consumption by 35%, and reach a 45% share of renewable energy in the city.

Finally, the goal for 2050 is to build a carbon-neutral city, 100% reliant on renewable energy. The city needs to invest in green spaces and innovative urban planning initiatives.

Paris Mayor, Anna Hidalgo, has already set ambitious goals to transform the city's 35 km-long périphérique (ring road) from a "grey belt" to a "green belt" by planting a staggering total of 70,000 trees.

In addition, retrofitting existing buildings and replacing heat-absorbing zinc roofing with more heat-friendly materials are essential to combat rising temperatures.

Paris has garnered well-deserved accolades for its Climate Action Plan, which aims to achieve carbon neutrality by 2050.

Vincent Viguié, a climate change economics researcher at the Centre for International Research on Environment and Development (CIRED), commends the city's efforts placing it "among the most active in the world on this subject, both in terms of reducing greenhouse gas emissions and adapting to the present and future impacts of climate change".

However, Paris must take a comprehensive and interconnected approach to address climate change effectively. Dr Vivian Dépoues, a Climate Change Adaptation Project Leader at the Institute for Climate Economics, emphasises Paris officials need to work on a "more profound transformation of the city".

Risks of Failure: A Sombre Seine

Renowned as the flood of the century, the 1910 Great Flood of Paris reached 8 metres that inflicted $1.5 billion in damages that could happen again. Such inundation would jeopardise historical landmarks and threaten the lives and livelihoods of residents and businesses.

The Seine, one of the most iconic rivers in the world, stretches 481 miles from Burgundy through Paris towards the mouth of the river in Normandy. Rising sea levels from climate change threaten the infrastructure of Paris situated along the banks of the Seine River.

Climate X Spectra - Granular flood Map of Paris (RCP 8.5 - 2050 - undefended) with projection of financial losses for one asset.
Figure 1: Climate X Spectra - Granular flood Map of Paris (RCP 8.5 - 2050 - undefended) with projection of financial losses for one asset.

A major flood in the Ile-de-France is one of the country’s most feared natural hazards.

Despite investments in protection, increasing urban development and the interdependence of critical infrastructures such as energy, communications, transport, and water along the River Seine have substantially accelerated vulnerability.

Furthermore, it could inflict broader economic challenges on the entirety of France. The Ile-de-France region represents roughly one-third of the economic activity of the nation, which could have direct and indirect impacts on almost 5 million people.

Impact of a Major Flood on Critical Networks in Paris
Figure 2: Impact of a Major Flood on Critical Networks in Paris.

According to the different flood scenarios, a major flood of the Seine and its tributaries could generate direct damage costing up to $30 billion.

Modelling of the potential impacts of a major flood in Paris found that the infrastructure sector would suffer 30% to 55% of the direct flood damages. In comparison, 35% to 85% of business losses were caused by disruption to the transportation and electricity supply and not by the flood itself.

More detail, 1.5 million people could experience power cuts, drinking water would be disrupted, and transport infrastructure could be greatly disrupted across the city.

For industries like insurance, floods could inflict $20 billion in losses. The ‘catastrophe naturelle’ (CAT-NAT) compensation scheme aims to encourage better prevention efforts by individuals, corporations, and local authorities.

Initiated in 2008, the reform project aligns with greater climate risks across France. This includes a potential 15% rise in compensation for homeowners with drought-damaged properties. The government plans this change as part of recognizing the 'natural disaster' status.

Thus, losses for insurance companies have the potential to rise dramatically while putting pressure on the government to support this compensation scheme.

It is critical to enhancing flood protection measures to prevent such a climate catastrophe and protect industries across the cities and France.

This includes implementing risk reduction measures by upgrading flood protection infrastructure, such as the la Bassée water storage pilot project. Enhancing emergency management capacities is also a priority.

Additionally, improving the resilience of urban areas to flooding will be achieved by leveraging opportunities from the Grand Paris projects. Finally, reinforcing the economic resilience of the Ile-de-France involves partnerships with the private sector and network operators.

It is crucial to protect industries from the risk of flooding. “The Seine,” says Emmanuel Grégoire , deputy mayor of Paris in charge of urban planning, “is the reason why Paris was born.”

In terms of responses to recent floodings, such as in 2018 when it levelled out at the height of 5.8 metres and again in 2021, all emergency response actors proved to be ready.

However, some actors observe that the May-June 2016 flood, which had lesser effects than were projected for a major flood in the metropolitan area, led to stalling the momentum.

Maintaining awareness of this major risk and its memory when it does not manifest itself will require long-term investment and support through animation mechanisms with different audiences, including businesses and decision-makers.

The authorities are currently undergoing a clean-up of the River Seine. A €1.4 billion project to be completed at the beginning of 2024 will enable Parisians to cool off in the river for the first time as they are legally allowed to swim in it for the first time in a century since 1923 it was banned.

The planned solution is centred on building the giant underground rainwater storage tank in southeastern Paris, which lies behind the cordoned-off construction site near the Austerlitz train station.

For now, city officials are not deterred. They believe their plan will only build on the progress made in recent years to upgrade waste treatment—and make the Seine swimmable nearly all the time.

But beyond the vision for the 2024 Olympics of a swimmable river is what the city officials and industries around the river need to look ahead for the climate risks of future flooding.

Risks of Failure: The City of Heat

France’s capital Paris is already starting to rethink its urban design thanks to the adaptation component in the city’s climate plan, as the sweltering heat is already a reality in Paris.

The city's existing temperature record of 42.6°C in the shade, set in 2019, is a testament to the rising scorching conditions.

On average, Paris tends to be 2 to 3°C warmer than the surrounding rural areas. However, during heatwaves, this temperature difference can surge by as much as 10°C. A concerning report suggests that in 2030 Paris could face an average of 34 heatwave days per year, more than doubling the 14 recorded in 2008.

Like Sevilla in the south of Spain, which currently face temperatures of 44°C on average during heatwaves, Paris is reinforcing the network of 1,200 fountains and developing nearly 1,000 green spaces, air-conditioned buildings and bathing place.

But to deal with such heat, the city needs systemic changes to infrastructure amongst the city's winding boulevards and charming zinc-top roofs that are large problems for the city's future.

The abundance of concrete and asphalt surfaces and a lack of green spaces exacerbate the city's temperature rise. During heatwaves, the concrete jungle absorbs and radiates heat, creating "heat islands" that intensify the urban heat stress experienced by residents.

Vulnerable populations, such as the elderly and those with pre-existing health conditions, are particularly at risk. Addressing this issue requires implementing sustainable urban planning, increasing green spaces, and promoting energy-efficient building designs.

Expectations are particularly high for France to address the issue of adaptation head-on in its upcoming strategy after environment minister Christophe Béchu called for modelling “a +4°C warming scenario in France”, adding this step was “essential” to avoid maladaptation.

Residential buildings, shopping centres, and some offices face significant impacts. The ‘urban heat island effect’ intensifies the challenge for residential properties, increasing energy costs, air pollution, and health risks, especially for vulnerable populations like seniors.

For instance, central Paris experiences temperatures 8°C higher than in greener suburbs. Effective mitigation measures are crucial in addressing these issues.

In the context of Paris, climate-related risks are exacerbated by its urban infrastructure. Additionally, the city faces a significant housing problem, similar to other major European capitals.

To tackle this, Grand Paris has constructed almost 115,000 apartments for public housing in the capital, rising from 13% to 25%. Government initiatives led by the ANRU (Agence Nationale pour la Rénovation Urbaine) tend to favour demolition and new construction instead of utilising existing stock.

While affordable housing remains a goal for the current Mayor of Paris, Anne Hidalgo, the urgency lies in accelerating the city's adaptation to global warming and achieving carbon neutrality by 2050 as the birthplace of the Paris Agreement.

Construction companies must build with climate change in mind if new construction is favoured. Otherwise, changes to the existing housing stock are needed to adapt to the climate crisis of Paris.

This coincides with increasing pressure to meet more demanding Energy Performance Certificates (EPCs) across France, with a need to access granular data to tackle and understand the transition risks while meeting net-zero targets to present opportunities for generating new sources of value.

Industry players, including real estate companies and banks, must invest in building mitigation measures. “Banks are key to providing the private sector funding needed for refurbishment investments that will allow for the real estate sector to achieve carbon neutrality,” stated by Imène Ben Rejeb-Mzah, Head of Climate Analytics and Alignment Data Analytics at BNP Paribas.

A New City

Thierry Laquitaine, the director of SRI at AEW, a global real estate management company, makes it clear: “We estimate that one euro spent today saves four euros later on”.

Tackling the climate risks of real estate head-on will be cost-effective in the long run.

This is the case for all real estate industry players, whether banks, insurance or real estate companies across France, whether in urban cities of Bordeaux or rural towns of Bayeux, protect citizens and companies from climate change.

While local authorities focus on the upcoming 2024 Olympics games to ensure that Paris can host world events and at the same time remain “the most beautiful city in the world”, it is crucial authorities and industries look more deeply at protecting their assets in time to safeguard Paris from climate risk and pave the way for the climate resilience for the rest of France before it gets too hot.

Assessing Climate Risks with Spectra

Climate X is the world’s only fully integrated climate risk platform translating physical risk into P&L impacts for banks, including Asset Valuation and Corporate Site level Business Disruption Revenue Impacts.

Our platform, Spectra, delivers asset-level financial losses and risk data such as probability and severity of extreme weather events for over 1.5bn properties worldwide, across various warming scenarios. 

Already trusted by G-SIBs, leading global asset managers and consulting groups - our award-winning platform enables you to integrate climate-related risks into investment strategies, risk management frameworks and business decision-making processes, turning future risks into opportunities.

Sources

Related Articles

Sign up to our newsletter

Get industry updates straight into your inbox.

Climate X