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climate change adaptation

Addressing the risks from climate change in performance-based contracts

Chris Bennett's picture


Output and performance based road contracts (OPRC) is a contracting modality that is increasingly being used to help manage roads. Unlike traditional contracts, where the owners define what is to be done, and oftentimes how to do it, OPRC contracts define the outcome that the owners want to achieve, and the contractor is responsible to meet those outcomes. Performance is measured against a series of key performance indicators (KPIs) or service levels.
 
Critical to the success of any OPRC contract is the assignment of risk between parties. Climate change has major implications for OPRC contracts because it affects the risk exposure of both parties. With funding from the Public Private Infrastructure Advisory Facility (PPIAF), a new analysis considered how to incorporate climate change risks into OPRC contracts.
 
What’s Happening Right Now?
 
Without clear expectations around climate risk, neither the asset owner nor the companies bidding for performance contracts will adequately address the risks. Bidders cannot be held accountable for risks that are not specifically cited or linked with performance criteria.
 
At present, climate change risks are generally carried by the asset owner through the Force Majeure provisions of the contract, and treated as ‘unforeseen’ events, with repair costs reimbursed to the contractor. This impacts the overall cost of the OPRC, and where extreme weather events are becoming common-place, reduces the efficacy of OPRC as a contracting modality. The most pressing issues challenging stakeholders during each phase of development are summarized in this chart.

Thank goodness, we had an extra bridge in stock!

Malaika Becoulet's picture
Credit: Joshua Stevens/NASA Earth Observatory
On October 4, 2016, category 4 Hurricane Matthew struck the southern part of Haiti. Strong winds and rain triggered heavy flooding and landslides that resulted in 500 fatalities, along with widespread infrastructure damage and economic loss. The hurricane caused the collapse of the Ladigue Bridge, a vital asset connecting the southern peninsula of Haiti to the capital city and the rest of the country. The collapse left 1.4 million people completely isolated, making it extremely hard to deliver the aid and humanitarian assistance they needed. Overall damage and losses were equivalent to 32% of GDP, with transport accounting for almost a fifth of the total.
 
Haiti is among the countries that are most vulnerable to natural disasters including hurricanes, floods, and earthquakes—the result of a combination of factors that include high exposure to natural hazards, vulnerable infrastructure, environmental degradation, institutional fragility, and a lack of adequate investment in resilience. In Haiti, 80% of people and goods are transported by road. First aid and humanitarian resources, often concentrated in Port-au-Prince, need to transit through congested and sometimes inaccessible roads to reach affected areas. In that context, strengthening and building resilient infrastructure is key.
 
Since 2008, the World Bank has supported the reconstruction of 15 major bridges and stabilized 300 kilometers of roads to enhance the resilience of Haiti’s transport network. One of the most significant innovations that came out of this effort was the adoption of standardized emergency bridges that can be assembled within 2- 3 months from pre-designed and interchangeable components.

Maximizing finance for safe and resilient roads

Daniel Pulido's picture


Around the world, roads remain the dominant mode of transport and are among the most heavily-used types of infrastructure, accounting for about 80% of the distance travelled for individuals and 50% for goods.

Despite this intensive use, the funding available for road maintenance has been inadequate, leaving roads in many countries unsafe and unfit for purpose.

To make matters worse, roads are also very vulnerable to climate and disaster risk: when El Niño hit Peru in 2017, the related flooding damaged about 18% of the Peruvian road network in just one month.

It is no surprise then that roads are the sector that will require the most financing. In fact, the G20 estimates that roads account for more than half of the $15 trillion investment gap in infrastructure through 2040.

Africa is paving the way to a climate-resilient future

Tara Shirvani's picture


Since the presentation of the World Bank’s first Africa Climate Business Plan at the COP 21 in Paris in 2015 and the Transport Chapter in Marrakech in 2016, a lot of progress has been made on integrating climate adaptation and mitigation into our transport projects.

The World Bank initially committed about $3.2 billion toward mainstreaming climate action into transport programs in Sub-Saharan Africa in the form of infrastructure investments and technical assistance. Following the Paris Agreement, and building on African countries’ Nationally Determined Contributions (NDCs), the size of this portfolio grew to $5 billion for 2016 to 2020.  In 2017, the institution added another $1.9 billion to that amount, bringing the total to $6.9 billion in projects with climate co-benefits— more than twice the size of the original portfolio. These investments will help improve the resilience of transport infrastructure to climate change and improve the carbon footprint of transport systems.
 
Climate change has already started to affect African countries’ efforts to provide better transport services to their citizens.  African transport systems are vulnerable to multiple types of climate impact: sea level rise and storm surge, higher frequency and intensity of extreme wind and storm events, increased precipitation intensity, extreme heat and fire hazard, overall warming, and change in average precipitation patterns. The increased frequency and intensity of extreme climate event challenges the year-round availability of critical transport services: roads are damaged more often or are more costly to maintain; expensive infrastructure assets such as ports, railways or airports can be damaged by storms and storm surges, resulting in a short  life cycle and capacity than they were originally designed for. Critical infrastructure such as bridges continue to be built based on data and disaster risk patterns from decades ago, ignoring the current trend of increased climate risk. For Sub-Saharan Africa alone, it is estimated that climate change will threaten to increase road maintenance costs by 270% if no action is taken.

Resilient transport investments: a climate imperative for Small Island Developing Countries

Franz Drees-Gross's picture
This blog post was co-authored by Franz Drees-Gross, Director, Transport and ICT Global Practice, and Ede Ijjasz-Vasquez, Senior Director, Social, Urban, Rural and Resilience Global Practice.



Transport in its many forms – from tuk-tuks in Thailand to futuristic self-driving electric cars – is ubiquitous in the lives of everyone on the planet. For that reason, it is often taken for granted – unless we are caught in congestion, or more dramatically, if the water truck fails to arrive at a drought-stricken community in Africa.

It is easy to forget that transport is a crucial part of the global economy. Overall, countries invest between $1.4 to $2.1 trillion per year in transport infrastructure to meet the world’s demand for mobility and connectivity. Efficient transport systems move goods and services, connect people to economic opportunities, and enable access to essential services like healthcare and education. Transport is a fundamental enabler to achieving almost all the Sustainable Development Goals (SDGs), and is crucial to meet the objectives under the Paris agreement of limiting global warming to less than 2°C by 2100, and make best efforts to limit warming to 1.5°C.

But all of this depends on well-functioning transport systems. With the effects of climate change, in many countries this assumption is becoming less of a given. The impact of extreme natural events on transport—itself a major contributor to greenhouse gas emissions—often serve as an abrupt reminder of how central it is, both for urgent response needs such as evacuating people and getting emergency services where they are needed, but also for longer term economic recovery, often impaired by destroyed infrastructure and lost livelihoods. A country that loses its transport infrastructure cannot respond effectively to climate change impacts.

Resilience in urban transport: what have we learned from Super Storm Sandy and the New York City Subway?

Ramiro Alberto Ríos's picture
Photo: Stefan Georgi/Flickr
Back in 2012, a storm surge triggered by Super Storm Sandy caused extensive damage across the New York City (NYC)-New Jersey (NJ) Metropolitan Area, and wreaked havoc on the city’s urban rail system.

As reported by the Metropolitan Transportation Authority (MTA), the subway suffered at least $5 billion worth of damage to stations, tunnels and electrical/signaling systems. The Port Authority Trans-Hudson network (PATH) connecting NYC to NJ was also severely affected, with losses valued at approximately $871 million, including 85 rail cars damaged.

In the face of adversity, various public institutions in charge of urban rail operations are leading the way to repair damaged infrastructure (“fix”), protect assets from future similar disasters (“fortify”), restore services to millions of commuters and rethink the standards for future investments.

NYC and NJ believe that disasters will only become more frequent and intense. Their experience provides some valuable lessons for cities around the world on how to respond to disasters and prepare urban rail systems to cope with a changing climate.

In the Pacific, climate change means trying to expect the unexpected

Chris Bennett's picture

I was reflecting on the saying that “ignorance is bliss” as our plane was landing in Tuvalu, a small island nation in the South Pacific. We had been advised that portions of the recent runway resealing was failing in a number of locations, but it was the video below—showing the runway ‘floating’ under the weight of someone walking on it—that was particularly disconcerting.  Runways are supposed to be solid!

Tuvalu has regularly been called the ‘canary in the coal mine’ when it comes to climate change. The country is comprised of three reef islands and six coral atolls.  With the maximum elevation of 3-4 m, and sea level rise of some 5 mm/year, it is already at a risk of a range of climate change challenges. Now we have a new one: runway failure from beneath caused by what appears to be a combination of very high (‘king’) tides and increased rainfall.

What El Niño has taught us about infrastructure resilience

Irene Portabales González's picture
Also available in: Español
Photo: Ministerio de Defensa del Perú/Flickr
The rains in northern Peru have been 10 times stronger than usual this year, leading to floods, landslides and a declaration of a state of emergency in 10 regions in the country. Together with the human and economic toll, these downpours have inflicted tremendous damage to transport infrastructure with added and serious consequences on people’s lives.

These heavy rains are blamed on El Niño, a natural phenomenon characterized by an unusual warming of the sea surface temperature in the central and eastern equatorial Pacific Ocean. This phenomenon occurs every two to seven years, and lasts about 18 months at a time. El Niño significantly disrupts precipitation and wind patterns, giving rise to extreme weather events around the planet.

In Peru, this translates into rising temperatures along the north coast and intense rainfall, typically shortly before Christmas. That’s also when “huaicos” appear. “Huaico,” a word that comes from the Quechua language (wayq’u), refers to the enormous masses of mud and rocks carried by torrential rains from the Andes into rivers, causing them to overflow. These mudslides result from a combination of several natural factors including heavy rains, steep slopes, scarce vegetation, to name a few. But human factors also come into play and exacerbate their impact. That includes, in particular, the construction of human settlements in flood-prone basins or the absence of a comprehensive approach to disaster risk management.

This year’s floods are said to be comparable to those caused by El Niño in 1997-1998, one of the largest natural disasters in recent history, which claimed the lives of 374 people and caused US$1.2 billion worth of damages (data provided by the Peruvian National Institute of Civil Defense).

Climate and disaster risk in transport: No data? No problem!

Frederico Pedroso's picture
Development professionals often complain about the absence of good-quality data in disaster-prone areas, which limits their ability to inform projects through quantitative models and detailed analysis.
 
Technological progress, however, is quickly creating new ways for governments and development agencies to overcome data scarcity. In Belize, the World Bank has partnered with the government to develop an innovative approach and inform climate-resilient road investments through the combination of creativity, on-the-ground experience, and strategic data collection.
 
Underdeveloped infrastructure, particularly in the transport sector, is a key constraint to disaster risk mitigation and economic growth in Belize. The road network is particularly vulnerable due to the lack of redundancy and exposure to natural hazards (mostly flooding). In the absence of alternative routes, any weather-related road closure can cut access and severely disrupt economic and social movement.
 
In 2012, the government made climate resilience one of their key policy priorities, and enlisted the World Bank’s help in developing a program to reduce climate vulnerability, with a specific focus on the road network. The institution answered the call and assembled a team of experts that brought a wide range of expertise, along with experience from other climate resilience interventions throughout the Caribbean. The program was supported by Africa, Caribbean and Pacific (ACP) European Union funds, managed by the Global Facility for Disaster Reduction and Recovery (GFDRR).
 
Our strategy to address data scarcity in Belize involves three successive, closely related steps.

Preparing transport for an uncertain climate future: I don’t have a crystal ball, but I have a computer

Julie Rozenberg's picture
Photo: Alex Wynter/Flickr
In 2015, severe floods washed away a series of bridges in Mozambique’s Nampula province, leaving several small villages completely isolated. Breslau, a local engineer and one of our counterparts, knew that rebuilding those bridges would take months. Breslau took his motorbike and drove the length of the river to look for other roads, trails, or paths to help the villagers avoid months of isolation. He eventually found an old earth path that was quickly cleaned up and restored… After a few days, the villagers had an alternative to the destroyed bridge, reconnecting them to the rest of the network and the country.

What happened in the Nampula province perfectly illustrates how a single weather event can quickly paralyze transport connections, bringing communities and economies to a screeching halt. There are many more examples of this phenomenon, which affects both developing and developed countries. On March 30th, a section of the I-85 interstate collapsed in Atlanta, causing schools to close and forcing many people to work from home. In Peru, food prices increase in Lima when the carretera central is disrupted by landslides because agricultural products can’t be brought to market.

How can we help countries improve the resilience of their transport networks in a context of scarce resources and rising climate uncertainty?

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