Changes to the climate system in the oceans, ice sheets, and sea levels are mainly irreversible for up to a thousand years due to past and present emissions.
The IPCC Sixth Assessment Report warned that warming would continue until at least 2050 under all emissions scenarios.
This means that extreme events – heatwaves, heavy rainfall, droughts, tropical cyclones, and sea level rise, will become more frequent and severe.
The Infrastructure Investor article, “Flying blind: the threat to infra from ignoring physical climate risk“, discusses the impacts of climate change on infrastructure across the globe, the need to understand the physical climate risks (PCR), embed resilience from the start to ensure that infrastructure assets continue to provide the expected level of service, which will require a standard approach to appraising infrastructure assets against climate risk.
The article notes that climate change is already happening across the globe. The U.S. alone has experienced more than 250 weather and climate disasters in the last 20 years, costing more than USD 1.6 trillion. More than 3 billion people live in regions most vulnerable to climate change, which makes a good case for building climate-resilient infrastructure.
The Global Infrastructure Hub projects that US$15 trillion is needed in infrastructure investment by 2040, while 75% of the infrastructure required by 2050 is yet to be built, particularly in developing countries.
These figures present a massive opportunity for infrastructure planning incorporating resilience to withstand climate change impacts.
To meet the future challenges in infrastructure, the Coalition for Climate Resilient Investment (CCRI) launched a “market-first methodology” in July this year.
The Physical Risk Assessment Methodology (PCRAM) “pulls together best practices from asset management, engineering, finance and climate resilience sectors, providing infrastructure asset developers, investors and regulators with a robust step-by-step process that quantifies the impact of PCRs on asset performance.”
“The PCRAM will allow asset managers and owners to make informed decisions from asset design and throughout the whole life cycle of the project on how to best adapt new and existing infrastructure assets to reduce the material impacts of extreme weather events”.
According to the article, infrastructure projects have faced serious design, delivery, and operation challenges, and climate change adds more risks.
It mentions that there has also been a lack of a comprehensive understanding of the physical climate risk on assets and its effects on the asset’s performance, which should be incorporated at the project’s onset. Doing so can reduce costs later, especially when infrastructure needs improvements to adapt to climate change impacts.
The methodology has already been tested in real-world infrastructure, including a wind farm in East Asia, and a hydropower plant in Africa, with each case delivering a “resilience dividend”.
The methodology will provide asset management professionals and owners with the tools to optimise cost throughout an asset’s life while embedding climate resilience.
The cost-benefit analysis demonstrates significant medium to long-term gains in investing in resilience versus not doing it, posing a convincing business case for investing in resilience and accessing the finance to protect vulnerable communities from climate change impacts.