Infrastructure for a Climate-Resilient Future

Infrastructure is key to a well-functioning society and economy, enabling the circulation of people, goods, services and information. However, climate-related disasters can lead to widespread infrastructure failure and damage, which disproportionately impacts developing countries. Governments, at all levels, should systematically factor climate resilience into infrastructure planning and decision-making, including by prioritising sustainable projects, to help reduce societal and economic vulnerability and avoid long-term costs.

> There are significant economic losses due to climate-related damage to infrastructure

> Developing countries face the biggest challenges in building climate-resilient infrastructure

> More and better quality investments are needed for sustainable infrastructure

> Regional and local governments are on the frontline of building climate resilience

> What can governments do?

There are significant economic losses due to climate-related damage to infrastructure

With record global temperatures around 1.4 degrees Celsius above pre-industrial averages in 2023, the world is experiencing more severe heatwaves and floods, more frequent droughts, longer wildfire seasons and rising sea levels.

Between the 1970s and the 2010s, the number of recorded climate-related extreme events increased significantly, while recorded economic losses from such disasters increased sevenfold from USD 198 billion to USD 1.6 trillion. Infrastructure assets make up an important share of this economic damage.

Developing countries face the biggest challenges in building climate-resilient infrastructure

Developing countries are particularly vulnerable to extreme weather events, as they are to all natural disasters, especially the Least Developed Countries (LDCs) and Small Island Developing States (SIDS). High financing costs and other challenges also hinder their ability to build quality infrastructure and achieve their development goals.

More and better quality investments are needed for sustainable infrastructure

Finance flows for climate-resilient infrastructure are insufficient to address the growing impacts of climate change. To meet climate and development objectives by 2030, an annual investment of USD 6.9 trillion in sustainable infrastructure is needed globally. Investing in climate-resilient infrastructure systems is cost effective, can save lives and support continued economic growth, reducing vulnerability to current and future climate shocks.

Regional and local governments are on the frontline of building climate resilience

Regional and local governments are important investors in climate-resilient infrastructure. Subnational governments were responsible for 69% of climate-significant public investment in OECD and EU countries in 2019. To plan, deliver and maintain local climate-resilient infrastructure, many subnational governments will need to adopt new funding approaches and better mobilise climate finance.

What can governments do?

1. Integrate climate risks into infrastructure planning and project selection

Co-ordinate with actors that deliver and operate infrastructure, identify the interdependencies among infrastructure systems and develop ways to share information on vulnerabilities to climate risks among infrastructure operators and stakeholders.

2. Mainstream climate resilience into infrastructure financing and investments

Using reporting and disclosure regimes, mobilising private financing and investment, and exploring the full range of potential funding sources can help governments to incentivise financing and ensure that climate resilience is taken into consideration.

3. Unlock the potential of nature-based Solutions

Harnessing nature-based solutions can provide cost-effective ways to protect infrastructure assets and services, while at the same time contributing positively to conserving ecosystem functions and improving human health. Governments should foster these solutions across the policy, regulatory, finance and institutional frameworks that enable infrastructure development.

4. Address the unique challenges and opportunities faced by developing countries

Strengthen international partnerships based on knowledge sharing and technical assistance, research and development of technologies and tailored business solutions, increasing investment and financing, and enhancing the mobilisation of multilateral development banks and development finance institutions.

5. Integrate climate-resilience approaches across all levels of government

National, regional and local governments should adopt a place-based approach to help embed local characteristics in policies for building climate resilience and harness multi-level governance to help align climate resilience actions across levels of government. Governments should also reinforce local government capacity, including finances to ensure regions and cities can mobilise sustainable funding and financing for local climate resilience actions.

Infrastructure for a Climate-Resilient Future

iLibrary doi: 10.1787/a74a45b0-en

This report discusses ways of enhancing government capacities to prevent, react and rebuild, thereby minimising the impact of natural disasters on infrastructure assets and operations. It identifies data, collaboration and technologies as drivers of resilience, and highlights financial resources, technical skills and regulatory frameworks as key enablers. The report presents seven actionable principles to ensure infrastructure resilience, drawing from global good practices and in-depth analysis of infrastructure projects in Colombia, Ghana, India, Indonesia, Japan, Mozambique and the United States.

Read the report

> Press release

> OECD INFRASTRUCTURE FORUM

> Compendium of Good Practices on Quality Infrastructure 2024