Global infra faces losses worth $300 bn due to climate change: Report

The report said the annual investment required to fund the infrastructure deficit, achieve the sustainable development goals, and strengthen resilience by 2050 is about to $9.2 trillion

The global annual average loss (AAL) in key infrastructure sectors due to disasters and climate change is currently estimated to be between $301 billion and $330 billion, according to a report by the Coalition for Disaster Resilient Infrastructure (CDRI).

If health and education infrastructure, along with building stock, are included, the range escalates to $732 billion to $845 billion. This accounts for nearly one-seventh of the global Gross Domestic Product (GDP) growth in the financial year 2021-2022 (FY22). Almost half of this contingent liability is held by low- and middle-income countries, the report added.

According to the CDRI report, the annual investment required to address the infrastructure deficit, achieve the Sustainable Development Goals, and bolster resilience by 2050 amounts to around $9.2 trillion. Of this sum, between $2.84 trillion and $2.90 trillion needs to be invested in low- and middle-income countries.

 

CDRI is an international collaboration involving countries, organisations, and stakeholders, focused on enhancing the resilience of infrastructure systems against disasters. Prime Minister Narendra Modi inaugurated the initiative at the United Nations Climate Action Summit in September 2019.

Also Read: Global infra faces losses of $300 bn amid worsening climate impacts: CDRI

Low- and middle-income countries face a multifaceted array of challenges linked to their infrastructure. These range from inadequate infrastructure hampering socio-economic growth to poor quality of existing assets due to governance deficits. Additional challenges include vulnerability to natural calamities and the presence of outmoded infrastructure that hasn't adapted to either climate change or technological advancements.

Approximately 30 per cent of the average annual loss to infrastructure is attributed to hazards like earthquakes and tsunamis. The remaining 70 per cent is due to climate-related events such as cyclones, floods, and storms. This risk is not uniformly spread across sectors; around 80 per cent of the risk is concentrated in power, transport, and telecommunications.

About 67 per cent of the global value of infrastructure assets is located in high-income countries. However, low- and middle-income countries bear the highest relative risk to their infrastructure. Climate change is expected to disproportionately affect countries with significant infrastructure deficits, poor governance, low fiscal capacity, and scant private investment.

The CDRI report indicates that countries most susceptible to increased risk due to climate change are primarily in Sub-Saharan Africa and the Middle East.

High-income countries and middle-income countries with large economies, such as India, Mexico, and China, face a high risk of significant infrastructure loss due to natural disasters. However, given the size of their capital stock, this does not imperil their recovery capacity.

Contrastingly, countries like the Philippines, Bangladesh, Vietnam, Myanmar, Peru, Honduras, and Ecuador face a high risk of significant infrastructure loss, which constitutes a sizable portion of their economies. Such losses can severely challenge their resilience, according to the report.

(With inputs from agencies)