Climate Adaptation and Investing in Resilient Infrastructure

The new report from the World Bank and the Global Facility for Disaster Reduction and Recovery, “Lifelines: The Resilient Infrastructure Opportunity,” lays out the framework for understanding infrastructure resilience or the ability of infrastructure systems to function and meet users’ needs during and after natural shocks. It also makes an economic case for building more resilient infrastructure.”

The study says that resilient infrastructure is about people, households and communities where it serves as a lifeline to better health, education and livelihood. Damages to infrastructures from natural disasters and calamities mean that people can’t go to work or send children to school, undermine economic development and hinder access to crucial services like hospitals and relief shelters during emergencies. To prevent this from happening would require robust and resilient infrastructures.

Resilient infrastructures are those that can withstand hazards and extreme weather events, such as strong floods, water pipes that can endure earthquakes, and sturdy electric poles that can withstand powerful hurricanes.

The study focuses on four essential infrastructure systems: power, water and sanitation, transport, and telecommunications. It “lays out the framework for understanding the ability of infrastructure systems to function and meet users’ needs during and after natural shocks.”

In developing countries, disruptions to infrastructure systems are an everyday occurrence and very costly due to the rapidly increasing population and the changing climate, which causes more frequent and intense natural hazards. Thus, adaptation and investment in resilience are urgent and a top priority.

Disruptions to infrastructure are estimated at $390 billion a year, costing households and firms in low—and middle-income countries, not counting the indirect costs to households, businesses, and communities. The study also finds that the lack of resilient infrastructure causes more harm to people and firms than previously thought.

The good news is that there are many examples worldwide of how money is invested in resilient structures.  The study finds that investing only 3 per cent into building resilience will result in a net benefit of $4.2 trillion, a $4-dollar benefit for each dollar spent in resilience over the lifetime of new infrastructure.

The report illuminates this $4.2 trillion opportunity, stating that this will not be spending more but spending better.

The report gathers information from several case studies, a modelling exercise, and global empirical analysis and cites some examples of how infrastructure disruptions affect countries, particularly poor ones.

Some of the highlights from the study show that:

• Poorer countries are hit hardest by inadequate infrastructure
• Reliable access than access to electricity has a positive effect on income and social outcomes, especially in Bangladesh, India, and Pakistan
• The power networks in Bangladesh are more vulnerable to the wind compared to the United States
• Floods in Kampala severely restrict people’s access to healthcare facilities
• Africa and South Asia bear the highest losses from unreliable infrastructure
• In Tanzania, investment priorities for its transport network will depend on its supply chains.
• Firms in low – and middle-income countries incur high utilization rate losses due to infrastructure disruptions.
• In Africa and in low- and middle-income countries, power outages are causing large sales losses.

The findings offer a good case for building resilient infrastructures as key to a stable economy, economic growth, and overall well-being of its service users.

Investing in resilient infrastructure is less costly than its alternative of not doing anything. As the study reveals, it does yield many benefits, such as fewer disruptions that undermine the economy and prevent other indirect costs and harm to its service users.

The study has come up with five recommendations to address obstacles to resilient infrastructure:

1. Get the basics right. Underperforming infrastructure systems are caused by poor management and governance, so improving performance requires both increased investments and improved governance quality. For resilient infrastructure to happen, countries must get the basics right.
2. Build institutions for resilience. Governments need to implement the whole-of-government approach in recognition of their role in ensuring the resilience of critical infrastructure, identifying critical infrastructure, defining acceptable and intolerable risk levels, and ensuring equitable access to resilient infrastructure.
3. Include resilience in regulations and incentives. Public and private decision-makers usually have few incentives to avoid disruptions and tend to go for cheaper costs when investing in resilience, so to counter this, governments should include financial incentives to align the interests of infrastructure providers with those of the public.
4. Improve decision-making. In addition to giving providers incentives to build resilient infrastructures, they also need access to data, tools, and skills to improve their decision-making.
5. Provide financing. This is linked to the obstacle linked to affordability and financing constraints. Often, making infrastructure more resilient only increases the cost of design, construction, and maintenance while reducing repair costs. The challenge here is financing and how to transform annual revenues or budgets to be used at each stage of the infrastructure life cycle.

Access the entire paper by clicking the link in the “Source” section.