In a 45-page report on climate change, Civic Exchange also warned sudden storm surges and rising sea levels could destroy roads and flood the runway at Hong Kong International Airport. Alexandra Tracy, lead author of the Civic Exchange report, said the subway system is vulnerable to flooding, while power outages will mean commuters will be trapped.

"Another issue is that when you have more groundwater, the hydraulic pressure will increase on tunnel walls. We don't know what kind of consequences this will bring yet."

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Flooding is already affecting mass- transit systems in other cities such as New York city, where heavy rains forced three subway lines to close for an hour in July.

Closer to home, torrential rain in September forced the KCR to suspend its East Rail train services for 40 minutes during rush hour.

In addition to building protective barriers around MTR entrances, the think-tank also urged the government to consider constructing an extensive dyke system to protect the entire Pearl River Delta region.

According to the report, the sea level along the coast of Guangdong is expected to rise 30 centimeters over the next 25 years, threatening much of the region's manufacturing area.

In the long term, the government should introduce incentive schemes to encourage investment in less vulnerable areas of the region, the report stated.

Civic Exchange chief Christine Loh Kung-wai also said frequent storms could lead to lower revenues and higher costs for local businesses. Increased taxation and higher insurance premiums are almost "certain," she said.

"Climate change is a worldwide issue. There is no escape, the Hong Kong administration won't be able to avoid this. I suspect in the next one to two years, the international investment community is going to start asking questions about plans for adaptation."

New development projects along the waterfront and low-lying areas - Sheung Wan, Mong Kok and parts of the New Territories - could face difficulty finding an insurer at all, Tracy said.

"I suspect at some point in time some things will just not be insurable, like properties along the waterfront."

In a response Thursday night, an MTR spokeswoman said in the event of flooding, station staff are instructed to seal off select entrances and exits with floodboards.

Floodgates can also be activated on either end of the Cross-Harbour Tunnel, but trains suspended inside the tunnel would be evacuated before the tunnel is closed.

MTR also said it cooperates with both electricity companies so that in the event one experiences a power outage, the operator can switch to the other.

However, when asked what MTR would do in the event of a city-wide power outage, the spokeswoman admitted the operator had yet to come up with a solution, but said such a situation was highly "unlikely."