While the talk around climate change has been in the spotlight for the last three decades, the IPCC’s Sixth Assessment Report released in August 2021 has alerted the policymakers with its revelations.
Top 10 Disaster-induced Economic Losses (2020) | UNDRR
The Report specifies that not only have carbon di-oxide concentrations in the atmosphere increased, the rate of increase has also risen. Most recent projections send signals on the global temperature reaching or possibly exceeding an average of 1.5°C of warming, in the next twenty years.
While climate change around the world has ostensibly been driven by carbon emissions with far reaching implications, the material damage it is likely to cause are projected to grow even further. In this regard, developing climate-resilient infrastructure (CRI) can be a viable alternative for India to minimize its economic losses. Given the imminence of unprecedented climate change, CRI should be a cornerstone of India’s ambitious US$ 1.4 trillion National Infrastructure Pipeline. Making infrastructure resilient, not only minimizes the cost of repairs but also helps mitigate the likely damage that natural disasters may cause.
Benefits of CRI
A recent report by the World Bank and the Global Facility for Disaster Reduction and Recovery (GFDRR) found that investing in resilient infrastructure pays for itself four times over. In particular, the net benefit on average of investing in more resilient infrastructure in low and middle-income countries would be US$ 4.2 trillion with US$ 4 in benefit for each US$ 1 invested. Additionally, the economic spillovers from making infrastructure climate resilient are overarching. For instance, lesser disruptions in power supply have direct implications on income and employment.
The CRI also increases the asset’s life, which in turn reduces the repairs and maintenance cost. The risk of damage to transport assets and roadways in landslide prone areas like the Northern and North-Eastern States of India can also be reduced significantly by increasing the redundancy of road networks and investing in making the roads landslide resistant.
Approach to Building CRI in India
India has spearheaded the formation of the Coalition for Disaster Resilient Infrastructure (CDRI) initiative, which is an international collaboration to pool best practices and resources from around the world to reshape the infrastructure. Given the recent numbers on climate change and frequent disasters, it is suggested that a similar plan of action may have to be drawn at the national and sub-national level. To enable that, India’s engagements with the CDRI may help setting technical benchmarks for domestic engineering and construction firms. Additionally, India’s state owned DFIs could consider channelizing investments and acquiring equity stakes in funds like the Climate Finance Partnership SCSp (CFP).
Further, the financing of the CRI could be addressed through the newly introduced National Bank for Financing Infrastructure and Development (NaBFID) as one of the principal DFI for infrastructure financing. Within the framework of NaBFID, a designated portfolio could be created for disbursement of credit to climate-resilient infrastructure and preference may be given to borrowers requiring financing for CRI-based projects. From the lending perspective, norms-based screening such as the exclusionary screening of loans, could be used in identification of non-resilient infrastructure financing.
Another approach could be using the Smart Cities Mission for CRI development in India. Aside from providing a roadmap, through its multi-dimensional design, the Smart City Mission, provides multiple entry points for stakeholders to collaborate in the development of climate-resilient infrastructure in India. Given that the premise of the Mission rests on application of smart solutions to infrastructure, adoption of a revised framework for selection of smart cities may be helpful. Greater weightage could be assigned to development and retrofitting plans focused on resilient infrastructure, natural drainage systems and urban ecosystems. CRI designs could be introduced as pilot projects across disaster prone areas of states such as West Bengal, Odisha, Uttarakhand, Himachal Pradesh, among others, and upon qualification be extended to other cities.
CRI is the Future
New infrastructure will have to be prioritized and designed and at the same time, existing infrastructure will have to retrofitted, to brace the likely material damage engendered by climate change. To enable this, multi stakeholder arrangements may be required across different stages ranging from threat assessment of monuments to development and upgradation of the National Disaster Management Information System (NDMIS).
The narrative of any strategy that combines the objectives of infrastructure expansion and optimizing decarbonization, apart from promoting development, should be focused on constantly improving the ability of such infrastructure to withstand adverse climate changes and minimizing climate-related disruptions.
(Mayank Khurana and Aditi Varma are economists, India EXIM Bank)
