A once-in-a-generation opportunity: How green infrastructure saves lives and livelihoods

Last month, Cyclone Tauktae washed out roads, disrupting COVID-19 vaccinations and power supplies to 100 coronavirus hospitals in the Indian state of Gujarat. Across the globe in the United States, hundreds were evacuated when flood barriers were breached in Baton Rouge, Louisiana, as more rain fell on nearby Lake Charles in one day than during both hurricanes in 2020.

The increasing frequency of storms, flooding, mudslides, and fires around the world demonstrates that we need to adapt our infrastructure investments to make them more resilient to climate change today.  At the same time, we must ensure that they contribute to climate change action for the future.

On May 20th, President Biden signed an executive order to improve disclosure of climate-related financial risk in the United States. This demonstrates clear recognition that achieving net-zero greenhouse gas emissions not only improves our world for future generations but has immediate implications—as climate change increasingly leads to cascading shocks to our environment, our economies, and our societies.

Building more resilient infrastructure is critical to our response.

But building infrastructure involves a myriad of actors, sectors, and levels of government, making coherence a challenge. Here, strong governance mechanisms can help us to better consider future consequences (and costs) of exposure to climate-related shocks and the impact of infrastructure development on the sources of climate change.  The 2020 OECD Recommendation on the Governance of Infrastructure holds some lessons for how governments can ensure that infrastructure is both resilient and sustainable:
 

1. Think global, act local. Many governments still lack the means to link actions to climate commitments such as COP21. According to the 2020 OECD Infrastructure Governance Survey (expected release September 2021 on the OECD website), 74 percent of OECD countries have aligned long-term infrastructure plans with environmental and climate action plans. Such alignment makes it easier to set priorities clearly, transparently, and comprehensively, and to strike a balance among green and resilience objectives, value for money, and fiscal sustainability.
    
2. Don’t forget maintenance! Once built, infrastructure needs to be properly maintained throughout its lifespan. Our data also shows that 83 percent of OECD countries include maintenance costs and 57 percent include adaptation and retrofitting costs when assessing the affordability of new infrastructure projects.
    
3. Scaling up technology-enabled infrastructure (InfraTech). Innovative approaches—from big data for predictive maintenance to permeable pavements that reduce flood risk—have the potential to make infrastructure more sustainable and resilient . But to achieve real impact, governments must change their working methods and improve their digital maturity. For example, 18 percent of OECD countries still share data between public agencies on an ad hoc basis, and fragmented ICT purchasing decisions hamper whole-of-government solutions.
    
4. Consider the multiple benefits of green infrastructure. A rigorous project appraisal and selection process are crucial for good infrastructure governance , and there is increasing global consensus that it should take into account social, environmental, and climate-related impacts. While carbon emissions are the main measure of infrastructure’s impact on climate change, looking at resilience benefits—as well as others such as biodiversity, job creation, and social benefits to users—can help strengthen the case for going green, for example through nature-based solutions.
    
5. Governments cannot do it alone. The OECD Policy Toolkit on Governance for Critical Infrastructure Resilience provides a comprehensive policy framework for strengthening resilience and overcoming related governance challenges. The toolkit takes a systemic all-hazards approach, based on partnerships between governments and operators, and aims to inspire policy reforms that improve the continuity of essential services. Biden’s executive order demonstrates how governments can nudge markets by requiring contractors to disclose their carbon footprints or by favoring green bids in public procurement.
    
6. The public and private sectors need to speak the same language: A common framework for greenhouse gas emissions disclosure and other environmental impact measures will help governments prioritize the use of limited infrastructure funding and attract private investment.  Biden’s executive order, for example, instructs the government to better consider climate-related financial risk and to integrate it into underwriting standards, loan terms and conditions, and asset management and servicing procedures.

We must act now. The COVID-19 recovery packages now being passed are a once-in-a-generation opportunity to strengthen infrastructure resilience and to set our economies on track for a green recovery.  The European Union will invest €603 billion by 2026 through its Recovery and Resilience Facility, but we need infrastructure governance to help investments achieve the objectives of the European Green Deal. In the United States, momentum is strong for huge physical capital and R&D investment over the next 10 years. Over 70 percent of recovery packages passed in OECD countries also include significant infrastructure investment. Outside of the OECD, filling the infrastructure gap provides an equally important opportunity to make the right investment decisions.

The OECD and the World Bank are cooperating tightly under the Italian G20 Presidency to support strategies for improving the resilience and maintenance of infrastructure. In addition to G20 reports that we will produce, the forthcoming OECD Implementation Handbook for Quality Infrastructure Investment will provide governments with policy options, evidence, and good practice examples on how to design an effective governance framework for implementing quality infrastructure in a post-COVID-19 context.


Disclaimer: The content of this blog does not necessarily reflect the views of the World Bank Group, its Board of Executive Directors, staff or the governments it represents. The World Bank Group does not guarantee the accuracy of the data, findings, or analysis in this post.

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