Climate Adaptation and the Value of Investing in Resilient Infrastructure

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Climate Adaptation and the Value of 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, children to school, undermines economic development and hinders 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 could withstand hazards and extreme weather events such as strong floods, water pipes that can endure earthquakes, sturdy electric poles that withstands powerful hurricanes.

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

In developing countries, disruptions to infrastructure systems are an everyday occurrence and very costly due to rapidly increasing population, and the changing climate causing more frequent and intense natural hazards making adaptation and investment in resilience 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 its households, businesses, and communities.  The study also finds that the lack of resilient infrastructures causes more harm to people and firm than previously thought.

The good news is that there are many examples around the world on 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 sheds light on this $4.2 trillion opportunity saying that this will not be spending more but spending better.

Gathering from several cases studies, modelling exercise, and global empirical analysis the report 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 alone 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 health care facilities
  • Africa and South Asia bear the highest losses from unreliable infrastructure
  • In Tanzania, investment priorities for their transport network will depend on its supply chains.
  • Firms in low – and middle-income countries are incurring 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. And as the study reveals it does yield many benefits, such as fewer disruptions that undermine the economy and prevents 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 to improve performance takes both increased investments and improved quality of governance. So, for resilient infrastructure to happen, countries need to get the basics for infrastructure management right.
  2. Build institutions for resilience. Governments need to implement the whole-of-government approach in recognition of its role in ensuring the resilience of critical infrastructure; identify critical infrastructure and define acceptable and intolerable risk levels and ensure equitable access to resilient infrastructure.
  3. Include resilience in regulations and incentives. Public and private decision-makers usually 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 with the obstacle linked to affordability and financing constraints. More often making infrastructure more resilient only increases the cost of design, construction and maintenance while reducing repair costs. The challenge here is in 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 on the link:

To use the paper/resource mentioned in this blog post, please use the following citation:

Hallegatte, Stephane; Rentschler, Jun; Rozenberg, Julie. 2019. Lifelines : The Resilient Infrastructure Opportunity. Sustainable Infrastructure;. Washington, DC: World Bank. © World Bank. https://openknowledge.worldbank.org/handle/10986/31805 License: CC BY 3.0 IGO.

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