A growing and increasingly quantitative literature shows that human settlements are affected by climate change in one of three major ways:

1. The economic sectors that support the settlement are affected because of changes in resource productivity or changes in market demand for the goods and services produced there. [4.5]
   
2. Some aspects of physical infrastructure (including energy transmission and distribution systems), buildings, urban services (including transportation systems), and specific industries (such as agroindustry, tourism, and construction) may be directly affected. [4.5]
   
3. Populations may be directly affected through extreme weather, changes in health status, or migration. The problems are somewhat different in the largest (<1 million) and mid- to small-sized population centers. [4.5]
   

The most widespread direct risk to human settlements from climate change is flooding and landslides, driven by projected increases in rainfall intensity and, in coastal areas, sea-level rise. Riverine and coastal settlements are particularly at risk (high confidence⁶), but urban flooding could be a problem anywhere that storm drains, water supply, and waste management systems have inadequate capacity. In such areas, squatter and other informal urban settlements with high population density, poor shelter, little or no access to resources such as safe water and public health services, and low adaptive capacity are highly vulnerable. Human settlements currently experience other significant environmental problems which could be exacerbated under higher temperature/increased precipitation regimes, including water and energy resources and infrastructure, waste treatment, and transportation [4.5]

Rapid urbanization in low-lying coastal areas of both the developing and developed world is greatly increasing population densities and the value of human-made assets exposed to coastal climatic extremes such as tropical cyclones. Model-based projections of the mean annual number of people who would be flooded by coastal storm surges increase several fold (by 75 to 200 million people depending on adaptive responses) for mid-range scenarios of a 40-cm sea-level rise by the 2080s relative to scenarios with no sea-level rise. Potential damages to infrastructure in coastal areas from sea-level rise have been projected to be tens of billions US$ for individual countries—for example, Egypt, Poland, and Vietnam. [4.5]

Settlements with little economic diversification and where a high percentage of incomes derive from climate-sensitive primary resource industries (agriculture, forestry, and fisheries) are more vulnerable than more diversified settlements (high confidence⁶). In developed areas of the Arctic, and where the permafrost is ice-rich, special attention will be required to mitigate the detrimental impacts of thawing, such as severe damage to buildings and transport infrastructure (very high confidence⁶). Industrial, transportation, and commercial infrastructure is generally vulnerable to the same hazards as settlement infrastructure. Energy demand is expected to increase for space cooling and decrease for space heating, but the net effect is scenario- and location-dependent. Some energy production and distribution systems may experience adverse impacts that would reduce supplies or system reliability while other energy systems may benefit. [4.5 and 5.7]

Possible adaptation options involve the planning of settlements and their infrastructure, placement of industrial facilities, and making similar long-lived decisions in a manner to reduce the adverse effects of events that are of low (but increasing) probability and high (and perhaps rising) consequences. [4.5]

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