Infrastructure for a Climate-Resilient Future

Executive summary

Global average temperatures set a record in 2023, rising to around 1.4 °C above the preindustrial average. Behind this rise lies the growing frequency and severity of extreme events such as heatwaves and floods, as well as gradual onset changes such as droughts and inundation by rising seas. Some future climate impacts are now inevitable, but the consequences of those impacts are not. Enhanced efforts to prepare for the impacts of climate change are a vital complement to mitigation efforts.

Infrastructure and climate resilience are closely linked. First, climate change poses direct and indirect risks to infrastructure assets and service provision, such as when roads melt, reservoirs run dry and tunnels flood. Impacts in one area can lead to downstream economic and social impacts as disruptions ripple through infrastructure networks. Second, infrastructure can exacerbate climate-related risks. Sparks from electrical transmission lines, for example, can ignite wildfires, and heavy rains can set off catastrophic dam failures. Third, climate change will create new demands for infrastructure, such as reinforcement of flood defences.

Given these challenges, there is an urgent need to make climate resilience standard practice for infrastructure. Choices made today about infrastructure provision will have impacts for decades to come; it is vital to build resilience rather than lock in vulnerability. In practice, this means that infrastructure should be planned, designed, built and operated in ways that anticipate, prepare for and adapt to a changing climate. This complements efforts to ensure that infrastructure contributes to the transition to net zero. Climate resilience should be considered from the outset for new assets. Ageing infrastructure may need to be replaced or adapted to meet today’s needs. Existing assets may need to be retrofitted or operated differently to account for climate change impacts over the course of the asset’s life.

There is a compelling economic argument for investing in climate-resilient infrastructure. Well-targeted and timely investments can help protect lives and livelihoods, improve service reliability, reduce maintenance, extend asset lifetimes and generate co-benefits. Every dollar invested in climate-resilient infrastructure yields about four dollars of benefits.

Unlocking this potential requires a whole-of-government approach to embed climate resilience across the infrastructure life cycle. This includes assessing and understanding current and future risks to infrastructure assets and operations under climate change. Those risks must then be integrated into infrastructure planning and decision making. A clear business case is needed for investing in climate resilience. Climate resilience investments require adequate financing through diverse channels that establish incentives for greater financing.

This report draws on contributions from across policy areas to analyse the status of climate-resilient infrastructure, identify areas of emerging good practice and provide insights to help governments harness the potential of building infrastructure for a resilient future.

Policy insights

Systematically integrate climate change into infrastructure planning to ensure the resilience of infrastructure systems and manage interdependencies

• Climate resilience should be mainstreamed into planning to ensure that infrastructure can withstand future climate-related risks. At the same time, stakeholders should be involved in decisions that will affect the placement and impact of infrastructure as well as land use. Methodologies to select projects should deliver high levels of resilience and technical tools to operate and maintain for resilience over the life cycle.

• Key considerations for strengthening planning include the following:

  • Strengthen co-ordination among the actors that deliver and operate infrastructure, identify interdependencies among infrastructure systems and develop ways to share information about vulnerabilities to climate risks among infrastructure operators and stakeholders.

  • Use planning, policy and fiscal settings to signal future investment in resilient infrastructure and set out requirements for actors that deliver and operate infrastructure to meet resilience standards.

  • Use data and new techniques during the maintenance and operations phase to ensure service levels continue to be met in the face of increasing climate-related risks.

Mainstream climate resilience into infrastructure financing and investments to make climate-resilience the norm for all investments and unlock capital for adaptation

• Finance flows for climate-resilient infrastructure are insufficient to address the growing impacts of climate change. Market failures, policy misalignments and lack of risk awareness are preventing public and private investment decisions to account for the benefits of increased climate resilience.

• Key elements of such an approach include:

  • Use reporting and disclosure regimes to ensure that climate resilience is part of the financing considerations as a norm.

  • Ensure project preparation facilities can include the provision of technical support and guidance or financial support to plan for climate-resilience.

  • Mobilise private financing and investment by encouraging physical risk disclosure, addressing regulatory barriers, ensuring effective risk sharing and, where appropriate, the strategic use of public support including blended finance to incentivise financing for climate resilience.

  • Explore the full range of potential funding sources for climate resilient infrastructure to cover upfront costs, as well as ensuring adequate maintenance. Innovative financing approaches, such as land value capture, can provide a useful complement to traditional funding streams such as taxes and user charges.

Unlock the potential of Nature-based Solutions (NbS) for providing cost-effective and flexible infrastructure services, as well as social and environmental co-benefits

• NbS can substitute, complement or safeguard conventional climate risk reduction solutions. However, unleashing the potential of NbS will require integration across the policy, regulatory, finance and institutional frameworks that enable infrastructure development, and incorporation in technical training programmes for designers and operators of infrastructure.

• Strengthening use of NbS includes the following actions:

  • Examine technical norms, standards and regulations to ensure a level playing field for the use of NbS compared to conventional infrastructure.

  • Build capacity for NbS through development of knowledge tools such as databases of good practices, networking and capacity building platforms.

  • Adjust valuation approaches so the benefits of NbS are considered in policy and project appraisal, design and selection processes.

Address the unique challenges and opportunities faced by developing countries

• For developing countries, the imperative of climate-resilient infrastructure goes hand in hand with the need to close the infrastructure gap. Addressing social equity and inclusion is paramount when planning climate-resilient infrastructure in developing countries, where inadequate infrastructure can disproportionately affect vulnerable and marginalised communities.

• International co-operation can help address the specific needs of developing countries through the following actions:

  • Share knowledge and provide technical assistance in private and public sector capacities, including through co-operation and co-ordination mechanisms; update legal frameworks and development of climate adaptation and resilience capacities, especially through enhanced tools and institutional strengthening.

  • Share know-how in research, development and deployment of adapted measures for climate-resilient infrastructure.

  • Increase investment and financing; enhance mobilisation of multilateral development banks and development finance institutions beyond direct financing and in areas such as project preparation, screening and due diligence to financing and signalling.

Take an integrated approach to create more climate-resilient regions and cities

• Climate-resilient infrastructure can help communities adapt to climate change as part of long-term regional and urban development. Regional and local governments will play an essential role in building climate-resilient infrastructure. Subnational governments were responsible for 69% of climate-significant public investment in OECD countries. They have the mandate to plan, deliver, fund and maintain much of the climate-resilient infrastructure required. They also have responsibilities for setting local framework conditions for climate resilience investment.

• The following approaches can help national, regional and local governments to support the delivery of climate-resilient infrastructure for regions and cities:

  • Adopt a place-based approach to tailor resilience actions to support systemic and integrated policy action at a local level together with communities.

  • Harness multi-level governance to help align climate resilience actions across levels of government through enhancing co-ordination and reinforcing local government capacity.

  • Support subnational government finances to help identify appropriate local revenue streams for resilience, to better mobilise funding to where it is most needed and to unlock climate finance at a local level.