With the effects of climate change growing, a gap in our response strategy has become increasingly obvious – infrastructure. As climate-induced disasters become more frequent and severe, we need to be certain that the infrastructure binding our society together is both robust and reliable. Pair that with increasing urbanization (did you know that 70% of all humanity will be living in cities by 2050?) and the urgency rises further. But what is the current state of our infrastructure, and why should we increase investments?
Decades-old infrastructure and rising climate disasters: A $1.9 trillion problem
Our current infrastructure – roadways, bridges, water systems, power grids, etc. – is largely a product of the mid-20th century. Now these structures, once designed for a different climate, face changing weather conditions. According to the National Resources Defense Council, the annual cost of climate-related disasters could reach $1.9 trillion by the end of the century (or 1.8% of U.S. GDP) for just hurricane damage, real estate loss, energy and water costs. Much of this cost will be incurred due to inadequate infrastructure, or for rebuilding in the aftermath of severe weather events.
Building for resilience: The economic benefits of investing in infrastructure
Despite these rising costs, investment in our infrastructure hasn’t kept pace. The American Society of Civil Engineers’ 2021 Infrastructure Report Card gave the U.S. infrastructure a ‘C-‘ grade, indicating a dire need for improvement. Notably, this investment isn’t just about managing climate risks – it’s also a solid economic strategy. Infrastructure investment has both short and long term benefits. In the near term, it heightens demand with strong fiscal multiplier effects (up to $3.70 for every dollar invested). In the long run, it reinforces economic growth and increases competition. A true win-win situation.
Climate adaptation will provide $7.1 trillion in net benefits
As the world warms, our infrastructure needs to adapt. The Global Commission on Adaptation estimates that investing $1.8 trillion in climate adaptation globally from 2020 to 2030 could generate $7.1 trillion in total net benefits. The bulk of these investments would be directed towards resilient infrastructure – helping us weather the storms, literal and figurative, of the future.
30 million jobs thanks to renewable energy infrastructure
But our focus on infrastructure shouldn’t be confined to adaptation alone. Infrastructure also offers a great opportunity to transition to a green economy. Renewable energy capacity in the U.S. surpassed coal for the first time in 2019, signaling a shift towards green energy infrastructure. Further investments could catalyze this transition, reducing our carbon footprint while creating jobs. According to the International Renewable Energy Agency, transitioning to renewable energy could provide 30 million jobs worldwide by 2030, up from 11.5 million in 2020.
It’s not jus physical infrastructure – $5.2 trillion predicted for digitalization
As we revamp our physical infrastructure, it’s equally important to look towards digital counterparts – the technologies that run and optimize our physical systems. The Fourth Industrial Revolution is rapidly integrating digital technologies into our infrastructure, transforming how we plan, build, and operate our cities. Things like curbing urban congestion through intelligent transportation systems or managing energy use via smart buildings will become increasingly important. By 2030, this market is expected to reach $5.2 trillion globally.
A future filled with green infrastructure investments
As we move forward, the need for infrastructure investment is non-negotiable. Investing in climate-resilient, green infrastructure could be the key to a sustainable future – aiding climate adaptation, driving economic growth, and accelerating the transition to a low-carbon economy. With the right investments, we can turn our infrastructure from a climate risk to a climate solution. The challenge may be large, but so are the opportunities.
