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POLICY PERSPECTIVES
Climate-resilient
Infrastructure
POLICY PERSPECTIVES
OECD ENVIRONMENT POLICY PAPER NO. 14

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© OECD 2018
ISSN 2309-7841
Authorised for publication by Rodolfo LACY, Director, OECD Environment Directorate
POLICY PERSPECTIVES
This Policy Paper was drafted by Michael Mullan, with substantive contributions from Lisa
Danielson, Berenice Lasfargues, Naeeda Crishna Morgado and Edward Perry. The work was
overseen by Simon Buckle (Head of Climate, Biodiversity and Water division) and Anthony
Cox (Deputy Director, Environment). It is based on the OECD Environment Working Paper,
“Climate‑Resilient Infrastructure: Getting the Policies Right”, by Lola Vallejo and Michael Mullan.
The document has benefitted from the feedback of: Liwayway Adkins, Charles Baubion,
Rodney Boyd, Teresa Deubelli, Jane Ellis, Julianne Jansen, Xavier Leflaive and Leigh Wolfrom
(OECD); Craig Davies (EBRD); Maya Hennerkes (IADB); Stéphane Hallegatte (World Bank).
Valuable guidance, information and advice were provided by the Argentine G20 Presidency:
Soledad Aguilar, National Director of Climate Change (Argentina), Lucas Di Pietro Paolo, National
Adaptation Coordinator (Argentina), Sofía del Castillo and Mariana Trinidad Corvaro (Argentine
G20 CSWG team).
Contents
Executive Summary 2
1. Defining climate-resilient infrastructure 4
2. Planning and designing climate-resilient infrastructure 6
3. Strengthening the enabling environment for climate-resilient infrastructure 14
4. Mobilising investment in climate-resilient infrastructure 24
5. Coverage of infrastructure in national climate risk assessments in OECD and G20 countries 34
6. Useful tools and reports 36
7. References 37

2 . CLIMATE-RESILIENT INFRASTRUCTURE
Executive Summary
Infrastructure networks will be affected by the physical (e.g. raising the height of bridges to account for sea-
impacts of climate variability and change, but will also level rise or using natural infrastructure such as
play an essential role in building resilience to those protecting or enhancing natural drainage systems).
impacts. Extreme events illustrate the extent of this
●● Flexible, adaptive approaches to infrastructure
potential exposure. For example, OECD modelling of
can be used to reduce the costs of building climate
the potential impacts of a major flood in Paris found
resilience given uncertainty about the future.
that 30% to 55% of the direct flood damages would
Climate model projections are a significant source of
be suffered by the infrastructure sector, while 35% to
uncertainty, particularly on a regional or local scale,
85% of business losses were caused by disruption to
but other factors (such as socioeconomic changes)
the transportation and electricity supply and not by
are also relevant for climate resilience. Decisions
the flood itself. Ensuring that infrastructure is climate
about infrastructure should consider relevant
resilient will help to reduce direct losses and reduce the
uncertainties to ensure resilience across a range of
indirect costs of disruption.
potential future scenarios.
New infrastructure assets should be prioritised,
planned, designed, built and operated to account for
Strengthening the enabling environment
the climate changes that may occur over their lifetimes. for the development of climate-resilient
Existing infrastructure may need to be retrofitted, or infrastructure
managed differently, given climate change. Lastly, ●● Decision makers need to have access to high quality
additional infrastructure, such as sea walls, will need information, consistent data and capacity to use
to be constructed to address the physical impacts of this information to inform planning. Uncertainties
climate change. This additional infrastructure can should be clearly communicated and valued, and
include traditional infrastructure, such as hard defences there should be access to the tools needed to
and other engineered solutions, as well as natural support decision-making under uncertainty. The use
infrastructure, such as wetlands and other nature-based of platforms and online tools can provide accessible,
solutions. credible and transparent information on past and
A wide range of actors, both in the public and private future climate behaviour. Access to information
sectors, are taking action to strengthen climate- should be complemented with the development
resilience. This report highlights emerging good of technical and institutional capacity to manage
practices and remaining challenges across OECD and climate-related risks.
G20 countries. It provides non-prescriptive guidance to ●● Tools for mainstreaming adaptation in critical policy
countries as they seek to enhance resilience in line with areas and encouraging investments in resilient
their national circumstances and priorities. infrastructure include:
Designing climate-resilient infrastructure −− spatial planning frameworks to redirect

development away from high-risk areas;
●● Climate-resilient infrastructure has the potential to
improve the reliability of service provision, increase −− infrastructure project and policy appraisals,
asset life and protect asset returns. Building climate including Strategic Environmental Assessment
resilience can involve a package of management and Environmental Impact Assessment; and
measures (such as changing maintenance schedules
−− regulatory and economic standards (such as
and including adaptive management to account for
building codes).
uncertainty in the future) and structural measures
POLICY PERSPECTIVES
EXECUTIVE SUMMARY . 3
●● Climate risk disclosure can help raise awareness faced by the port of Cartegena, Colombia motivated
of and encourage efforts to reduce climate-related investment to manage climate risks. Support for
risks to infrastructure, but needs to be tailored to project preparation can help to address capacity
national circumstances. The risks from climate constraints relating to climate resilience. Blended
change are diverse, vary by national circumstances finance can be used to improve the risk-return
and there are multiple possible metrics for profile of investments where appropriate.
measuring progress in addressing those risks.
Mobilising public and private investment for

climate-resilient infrastructure
●● Climate impacts are projected to lead to increases in
investment required for infrastructure, particularly
water storage, flood defences, and water supply
and sanitation in some regions. The use of tools
for decision-making under uncertainty can reduce
the need for costly retrofitting while reducing
upfront costs. Nature-based, flexible or innovative
approaches to climate-resilient infrastructure
may even be cheaper than traditional approaches.
Global studies find that the benefits of investing in
resilience outweigh the costs with high benefit-cost
ratios, for example of investment in flood defences
for coastal cities.
●● Developing and communicating infrastructure

plans can help investors to identify investment
opportunities. Developing these plans provides
an opportunity for decision makers to take a
strategic view of how climate change will affect
infrastructure needs in the coming decades
and design sequenced packages of investment
(“pathways”) that address interconnections and
increase resilience in a way that cannot be achieved
by looking at projects in isolation.
●● Public policies that promote resilience include

public procurement processes that consider
climate resilience when comparing competing
bids, by accounting for costs over the asset lifetime
under alternative scenarios. The increasingly
severe impacts of climate change expected later
in the design life of the project are unlikely to be
considered by the project developer at the design
stage unless there is a government requirement
to do so. The choice of discount rate will affect
the weight placed on potential future impacts
relative to those in the near-term. For Public Private
Partnership (PPP) contracts, it is important to clarify
the allocation of responsibilities regarding climate-
related risks planning, management and response.
●● Public finance can be used to mobilise private

finance for climate-resilient infrastructure. For
example, publicly funded analysis of the risks
1 Defining climate-resilient infrastructure
The defining characteristic of climate-resilient as a whole. Considering climate impacts for individual
infrastructure is that it is planned, designed, built and assets, such as a bridge or a railway line, is necessary
operated in a way that anticipates, prepares for, and adapts but not sufficient to ensure that the system functions
to changing climate conditions. It can also withstand, reliably despite a changing climate. For this reason,
respond to, and recover rapidly from disruptions caused by efforts to ensure resilience at the project level should be
these climate conditions. Ensuring climate resilience is a embedded within a strategic approach to infrastructure
continual process throughout the life of the asset. Efforts network planning that accounts for the direct and
to achieve climate resilience can be mutually reinforcing indirect effects of climate change and climate
with efforts to increase resilience to natural hazards. variability.
Climate-resilient infrastructure reduces, but may not This definition of climate resilience focuses on the
fully eliminate, the risk of climate-related disruptions. process used and outcomes achieved to assess whether
The extent to which climate change translates into climate change impacts have been considered and, if
risks for infrastructure depends upon the interaction necessary, managed. Given the context-specific nature
of changing climate hazards with exposure (the of climate adaptation, the measures used to achieve
location of assets) and vulnerability (“the propensity this will vary widely. In some cases, no structural
or predisposition to be adversely affected”) (Agard changes will be needed to achieve this: the climate-
& Schipper, 2014). Climate risks to infrastructure resilient fibre optic cable may be identical to the one
can be reduced by locating assets in areas that are that would have otherwise been installed. However,
less exposed to climate hazards (e.g. avoiding new where changes are required, they can be grouped into
construction in flood plains), and by making the two categories (EUFIWACC, 2016):
assets better able to cope with climate impacts when
●● Structural adaptation measures: e.g., changing the
they materialise. The development of infrastructure
composition of road surfaces so that they do not
should also consider the impacts on risk elsewhere:
deform in high temperatures, building seawalls or
for example, the potential contribution to flood risk
using permeable paving surfaces to reduce run-off
resulting from increases in paved surfaces.
during heavy rainfalls. Ecosystem-based approaches
Risk management requires making trade-offs between risk using natural infrastructure to design adaptation
minimization and cost, where it becomes more expensive measures are also key alternatives to be considered
and increasingly technically challenging to prepare for alongside structural adaptation measures.
events that are very unlikely to occur. Resilience means
●● Management (or non-structural) adaptation
that the risks have been considered and managed to
measures: e.g., changing the timing of
achieve an acceptable level of performance given the
maintenance to account for changing patterns
available information, and that capacities to withstand
of energy demand and supply, investment in
and recover from shocks are in place (OECD, 2014a).
early warning systems or purchasing insurance
The costs of protection need to be weighed against the
to address financial consequences of climate
consequences of damage or disruption. In the case of
variability. These measures can also include
protective infrastructure (such as flood defences) this
enhanced monitoring of existing assets to reduce
will be the assets protected by the defences. For other
the risk of failure as climate conditions change.
infrastructure, it will be the costs resulting from damage
Adaptive management approaches also include
or disruption to the asset (e.g. business interruption from
provisions to include flexibility from the outset
loss of electricity supply).
to monitor and adjust to changing circumstances
The climate resilience of individual infrastructure over the assets lifetime.
assets should be viewed in the context of the system
POLICY PERSPECTIVES
2 Planning and designing climate-

resilient infrastructure
This report examines how core infrastructure sectors can be made resilient to climate change. It
focuses on the following sectors: transportation, energy, telecommunications and water. Many of these
recommendations are relevant for both rural and urban areas, as well as for other types of infrastructure
sectors, such as health or education.
This section outlines the challenges and opportunities from making infrastructure resilient to climate
change. Measures to overcome those challenges are discussed in section 3 (strengthening the enabling
environment) and section 4 (mobilising investment).
Key messages
●● Infrastructure can have an essential role in and including adaptive management to account for
strategies to manage the risks and minimise the uncertainty in the future) and structural measures
negative impacts of climate change. The physical (e.g. raising the height of bridges to account for
impacts of climate change – such as increasing sea‑level rise).
temperatures, shifting patterns of precipitation,
●● Ecosystem-based approaches, including natural
increased intensity or recurrence of extreme
infrastructure, can provide an effective complement
weather events and rising sea levels - will affect
or substitute for traditional built (or “grey”)
all types of infrastructure. Infrastructure should
infrastructure. For example, watershed restoration
be designed, built and operated in a way that
can protect sources of drinking water and reduce
anticipates, prepares for, and adapts to these
the need for subsequent treatment. These
changing climate conditions. As countries
approaches can be cheaper than relying solely upon
communicate their long-term low greenhouse gas
“grey” infrastructure, as well as yielding co-benefits.
emissions development strategies and implement
their emission reduction goals, greater clarity ●● Flexible, adaptive approaches to infrastructure
about future emissions trajectories and potential can be used to reduce the costs of building climate
adaptation needs is likely to be achieved. resilience given uncertainty about the future.
Climate model projections may be a significant
●● Ensuring that infrastructure is resilient to climate
source of uncertainty, but other factors (such as
change can support the achievement of the Paris
socioeconomic changes) are also salient achieving
Agreement, including through increasing the ability
climate resilience. Decisions about infrastructure
to adapt to climate change and ensuring that
should consider relevant uncertainties to ensure
financial flows are consistent with low-emissions
resilience across a range of potential future
and climate-resilient development. Climate-resilient
scenarios.
infrastructure can also support the efforts to
achieve a number of the Sustainable Development The role of resilient infrastructure in a
Goals and the Sendai Framework for Disaster Risk changing climate
Reduction.
The Paris Agreement has the goal of holding temperature
●● Climate-resilient infrastructure has the potential to increases “well below 2°C above pre-industrial levels
improve the reliability of service provision, increase and pursuing efforts to limit the temperature increase
asset life and protect asset returns. Building climate to 1.5°C above pre-industrial levels”. Analysis of existing
resilience can involve a package of management NDCs suggest that collective ambition needs to be
measures (such as changing maintenance schedules increased if that goal is to be met (Vandyck, Keramidas,
POLICY PERSPECTIVES
PLANNING AND DESIGNING CLIMATE-RESILIENT INFRASTRUCTURE . 7
Saveyn, Kitous, & Vrontisi, 2016). Limiting temperature decisions provide opportunities to increase efficiency and
increases to well below 2°C would reduce the risk of reduce emissions.
encountering “severe, pervasive and irreversible” changes,
Extreme weather events vividly illustrate how the
but people and ecosystems would still have to adapt to
provision of infrastructure services could be vulnerable
potentially serious negative impacts (IPCC, 2014).
to the effects of climate change. For example, the
Infrastructure should be consistent with low-GHG 2011 flooding in eastern China caused major damage
transitions, but also resilient to the impacts of changing to 28 rail links, 21,961 roads, and 49 airports, as well
climate. The long-lived nature of infrastructure as cutting power to millions of households (Xi, 2016).
assets means that decisions made now will lock-in In 2015, the water level in São Paulo’s main reservoir
vulnerability if they fail to consider these impacts. The fell to 4% of capacity, leading to rationing of drinking
scale of investment decisions being made is significant: water and social unrest (Vigna, 2015). In Europe,
(OECD, 2017b) estimated that USD 6.3 trillion per year climate change is projected to increase damage to
will need to be invested in infrastructure globally infrastructure from extreme weather events ten-fold
between 2016 and 2030 to keep pace with development. by the end of the century, in the absence of adaptation
This estimate does not include expenditure driven by (Forzieri, et al., 2018). In addition to extremes, trend
adaptation or mitigation. The majority of investment changes will also have significant impacts for
needs will arise from the expansion of urban areas infrastructure. Under a dry climate scenario, the value
within low- and middle-income countries. The location, of hydropower generation in Africa could be reduced
design and management of those assets all need to by USD 83 billion leading to higher costs for consumers
be considered to ensure they are adapted to climate (Cervigni R. , Liden, Neumann, & Strzepek, 2016).
variability and change.
Ensuring that infrastructure is resilient to climate
The challenges of building climate-resilient change can support the achievement of the goals of
infrastructure vary by country. The primary challenge in the Paris Agreement, including through increasing the
developing countries and emerging economies is to build ability to adapt to climate change. Climate-resilient
new infrastructure for the expansion of urban areas infrastructure can also support efforts to achieve a
and the development of new cities, to provide access to number of the Sustainable Development Goals and the
energy and safe drinking water for all, and to connect implementation of the Sendai Framework for Disaster
people through transport links and telecoms. Countries Risk Reduction. The importance of resilience is also
also have the challenge of building infrastructure to emphasised by relevant OECD guidance in this area,
manage the risk of natural disasters. Industrialised including the OECD Recommendation on the Governance of
countries predominantly face the challenge of replacing Critical Risks (OECD, 2014b), and the OECD Framework on
and upgrading existing infrastructure and networks, the Governance of Infrastructure (OECD, 2017a).
particularly as technological advances and policy
BOX 1 GENDER AND CLIMATE-RESILIENT INFRASTRUCTURE
There is an important gender dimension to climate-resilient infrastructure. Vulnerability to climate change

is influenced by a range of socio-economic factors including gender, poverty and social status. Men and
women may have differing needs for infrastructure services: for example, access to piped water can support
female empowerment in societies where women are typically responsible for collecting water. Women and
men will also be affected differently by the impacts of climate change, including disruption to infrastructure.
Ensuring that infrastructure is resilient to climate change is a means to achieving more resilient societies,
rather than an end in itself. As such, the process of ensuring that infrastructure is resilient to climate
change should account for gender issues. To achieve this, it will be important to ensure women’s
meaningful participation in decision-making, and that their needs and perspectives are systematically
taken into account.
Source: (OECD, 2016; World Bank, 2010b).
Impacts of climate change on infrastructure insights about how the climate will respond to rising
concentrations of greenhouse gases in the atmosphere
Climate change will affect infrastructure provision and
at a global level. However, some key aspects of
operation, with the severity of these effects depending
the climate system that affect regional and local
on the overall emissions pathway and decisions resulting
projections are not yet sufficiently well understood
in increased exposure of assets and mal-adaptation.
and modelled (Bony et al., 2015). The most suitable
Projections from the IPCC find that the following
projections will depend upon the purpose for which
impacts are likely to occur by year 2100 under the low
they are being used. Developments in observations,
emissions (RCP2.6) and high emissions (RCP8.5) pathways
understanding and modelling capabilities in coming
(Pachauri, et al., 2014). The figures in Table 1 are relative
years will improve the quality of projections at the local
to the averages between 1986 and 2005. Overall, there
level, but will not eliminate these uncertainties.
is more confidence in temperature projections than
those for precipitation or sea-level rise (Shepherd, 2014). The scale of climate hazards is just one of the set of
Modelling of future socio-economic scenarios suggests relevant uncertainties in understanding the risks posed
future emissions are unlikely to reach the levels implied by climate change. For example, the impacts of changes
by RCP8.5 (Riahi, et al., 2017). in precipitation on requirements for water storage will
also depend upon trends in consumption, which will be
These global averages are illustrative of the scale and
affected by economic development, population changes
types of climate change that could be expected, but
and technological changes. These other factors alter
the impacts on a particular asset, such as a road or
the levels of risks and thus can have a more significant
reservoir, will be uncertain and context specific. There
impact on resilient infrastructure planning, design and
will be varied and sometimes severe impacts at the
economics than climate hazards themselves.
local scale, as global trends interact with diverse local
weather conditions. In addition, risks can arise from Recognising this complexity, the following categories
the interactions between different climate variables, capture the main ways in which the impacts of
or cascade through infrastructure networks. Since the climate change can affect the demand and supply of
publication of the IPCC’s Fifth Assessment Report, for infrastructure services. In some cases, there may also
example, further research has suggested that sea-level be simultaneous impacts on supply and demand as a
rise could exceed 2 metres on average by the end of the result of climate impact. For example, heat waves can
century (Oppenheimer and Alley, 2016). increase electricity demand for air conditioning, but
also limit generation from thermal power plans:
Climate model projections are subject to deep
uncertainty, and it is not possible to definitively ●● Demand for infrastructure services, for example:
estimate the probability of different climate −− Changing patterns of demand driven by
outcomes occurring at geographic scales relevant climate change, such as increased energy
for infrastructure. Climate models provide valuable
Table 1 Projections of climate change impacts

Averages in 2081-2100 relative to 1986-2005
RCP 2.6 RCP 8.5
Temperature 0.3 - 1.7 C 2.6 - 4.8deg C
Sea levels 0.26 - 0.55 m 0.45 - 0.82 m
Increase in average precipitation in high latitudes, decrease in subtropical and mid-latitude

Precipitation
dry regions
Ice cover Arctic sea ice cover will be reduced, as will the extent of permafrost in high northern latitudes
Risks associated with some types of extreme weather events, including heatwaves and heavy
Extreme weather events
precipitation, are projected to increase with climate change
Source: (Pachauri, et al., 2014) (IPCC, 2018).
POLICY PERSPECTIVES
demand for air-conditioning in summer and has benefits ex-ante, as it reduces the need
reduced demand for heating in winter, or for users to invest in backup measures (e.g.
increased water demand for irrigation; generators for businesses).
−− increased demand for protective infrastructure, ●● Increased asset life, reduced repair and
such as the construction of coastal defences to maintenance costs - preparing for climate
address rising sea levels; change at the outset can avoid the need for
costly retrofitting and reduce the risk of the asset
−− migration as a result of extreme weather
becoming prematurely obsolete.
events or gradual climate change.
●● Increased efficiency of service provision - in
●● Provision of infrastructure services, for example:
some cases, considering the impacts of climate
−− increased cost of supply, as climate change change can reduce the unit costs of providing a
may increase the costs of providing the same service relative to business-as-usual approaches,
level of service (e.g. larger reservoirs needed to for example through better management of
address more variable precipitation); hydropower resources.
−− risk of “stranded assets”, when investments ●● Co-benefits - some approaches to climate-
are no longer economically viable as a result of resilient infrastructure, particularly the use of
the physical impacts of climate change, or the natural infrastructure, can deliver an equivalent
impact of climate change policies; service to traditional approaches while also
−− damage to assets and disruption to service generating co-benefits such as amenity value,
provision, including cascading effects in biodiversity conservation, and climate change
other infrastructure sectors as a result of mitigation.
interdependencies; The scale of benefits is context specific, but analysis
−− additional investments required to manage by Hallegatte et al. (2013), for example, estimated that
increased risk of environmental damage, spending USD 50 billion per year (annualised) on flood
injuries and deaths due to failure of defences for coastal cities would reduce expected losses
infrastructure assets; in 2050 from USD 1 trillion to USD 60-63 billion. Projects
will not necessarily yield all of these benefits, and there
−− reputational damage to the government, owner will often be trade-offs to be made between climate
or operator of the asset resulting from the resilience and other policy objectives.
above factors.
Many of the techniques for increasing the reliability of
These impacts will be particularly important for cities, service provision may also increase costs: for example,
as they rely upon extensive infrastructure networks for adding redundancy, or designing assets to account for
access to water, energy and food. a wider range of potential climates (ITF, 2016; OECD,
Some examples of potential direct impacts by forthcoming). As well as the possibility of higher costs,
sector can be found in Table 2. In addition to these, there may be other trade-offs to make. For example,
climate change may also have indirect impacts on installing hard coastal defences have the potential to
infrastructure. These indirect impacts could include disrupt ecosystems, or increase the rate of erosion of
those resulting from the loss of ecosystem services as other properties. The ADB report, Economic Analysis of
a result of wildfires, increased tree mortality and the Climate-Proofing Investment Projects, provides guidance
spread of some invasive species. on methodologies that can be used to assess such
trade‑offs.
Benefits and opportunities from climate-
Given uncertainty about the future, adaptive
management approaches can facilitate climate
Climate-resilient infrastructure can yield a range of resilience throughout the life of infrastructure assets.
benefits relative to business-as-usual, depending on the Hydroelectric dams, for example, can have a design
measures that have been implemented. These include: life of 70-100 years. Over those time horizons, there is
very wide variation in the potential climate outcomes:
●● Increased reliability of service provision - reliable
in some regions, there is uncertainty about whether
infrastructure has benefits ex-post, by reducing
precipitation will increase or diminish. It could be
the frequency and severity of disruption. It also
prohibitively expensive to prepare for all of these and adjust to changing circumstances over the asset’s
outcomes at the outset. Instead, adaptive management lifetime. More information on tools for decision-making
(or iterative risk management) approaches can be under uncertainty can be found in section 3.
used to design in flexibility from the outset, monitor
Table 2 Illustrative impacts of climate changes in different sectors
Changing patterns of Changing patterns

Temperature changes Sea-level rise
precipitation of storms
Transport – Melting road surfaces and – Inundation of coastal – Disruption of – Damage to assets,
buckling railway lines infrastructure, such transport due to such as bridges
– Damage to roads due to as ports, roads or flooding – Disruption to ports
melting of seasonal ground railways – Changing water and airports
frost or permafrost levels disrupt
– Changing demand for ports transport on inland
as sea routes open due to waterways
melting of arctic ice
Energy – Reduced efficiency of solar – Inundation of coastal – Reduced output – Damage to assets
panels infrastructure, such from hydropower - e.g. wind farms,
– Reduced output from as generation, generation distribution
thermal plants due to transmission and – Disruption of energy networks
limits on cooling water distribution supply due to – Economic losses due
temperatures flooding to power outages
– Increased demand for – Insufficient cooling
cooling water
Telecoms – Increased cooling required – Inundation of coastal – Flooding of – Damage to above
for datacenters infrastructure, such as infrastructure ground transmission
telephone exchanges – Damage to infrastructure, such
infrastructure from as radio masts
subsidence
Urban – Increased cooling demand – Inundation and – Risk of drought – Damage to
development – Reduced heating demand increased flood risk – Flooding buildings
– Changes in land use – Deaths and injuries
due to relocation
of people living in
exposed areas
Water – Increased need for – Inundation of coastal – Increased need – Damage to assets
treatment infrastructure for water storage – Decreased standard
– Increased evaporation from – Salinisation of water capacity of protection
reservoirs supplies – Increased risk of river offered by flood
– Decreased standard of embankments being defences
protection offered by overtopped
coastal defences
Note: This table provides an illustration of the impacts that could occur in some sectors and in some regions. The impacts faced by a given
infrastructure asset will depend on a range of factors, including location: for example, storms are projected to increase in some regions and decrease
in others. A more comprehensive analysis can be found in the IPCC’s Fifth Assessment Report.
POLICY PERSPECTIVES
Challenges in making infrastructure resilient to ●● Policy misalignments - regulatory decisions and

climate change policy frameworks (such as those governing
procurement) can inadvertently distort
A range of barriers can prevent new and existing incentives, and discourage the use of innovative
infrastructure from being built and operated in a and ecosystem-based solutions.
climate-resilient manner:
●● Externalities - potential benefits, such as the
●● Time horizons - some benefits of increased amenity value of nature-based infrastructure,
climate resilience will occur beyond the time may not result in revenue for the infrastructure
horizons considered by decision makers, while operator.
costs are incurred in the shorter term.
A coordinated policy response is required to address
●● Uncertainty about the future – there are inherent these barriers, involving collaboration between the
uncertainties in modelling how the climate, and public sector, infrastructure owners and operators,
other factors affecting infrastructure resilience, professional associations and investors. Measures to do
will evolve in the future. This means that climate- so are discussed in section 3.
resilient infrastructure needs to be prepared for a
range of possible future scenarios. Experiences in strengthening and building
●● Information and capacity - awareness and
information on the risks from climate change, An overview of possible adaptation measures for the
such as climate projections, may not be readily energy sector can be found in Table 3. Examples from
available, or in a useable format, to inform other sectors can be found in Box 2 and the following
investment decisions. Information may not be report: Emerging trends in mainstreaming climate
available with sufficient geographic resolution resilience in large scale, multi-sector infrastructure
for infrastructure planning. Climate change is PPPs (World Bank, 2016).
complex and additional capacity may be needed
to support decision-making under uncertainty.
Table 3 Examples of adaptation measures for energy infrastructure
Climate impacts on
Management measure Structural Measure
infrastructure
Generation – Inundation of coastal – Model climate impacts – Fortify coastal, off-shore and
infrastructure, such as on existing and planned flood-prone infrastructure against
generation plants assets in collaboration with flooding
– Reduced efficiency of solar meteorological service – Increase cooling system capacity
energy – Revise maintenance schedules for solar energy
– Insufficient cooling water – Update hydropower operating – Locate new facilities outside
– Temperature of cooling rules high-risk zones
water before and after use
– Reduced output from
hydropower generation
Transmission and – Flooding of electricity – Implement program for pruning – Adjust design criteria for
distribution substations and managing trees near transmission lines, e.g:
– Damage to transmission transmission and distribution – Increase transmission tower
lines from climate extremes lines height
– Create disaster mitigation plans – Bury distribution lines
– Train emergency response – Use stainless steel material to
teams for quick repair and reduce corrosion from water
restoration actions damage
Consumption – Change in energy demand – Undertake load forecasting – Improve building and industrial
patterns (e.g. increased using climate information energy efficiency
demand for cooling and – Promote behavioural change
reduced demand for energy measures to reduce peak
for heating) consumption
Source: (IEA, 2015; World Bank, 2016).
POLICY PERSPECTIVES
BOX 2 SELECTED INFRASTRUCTURE PROJECTS INTEGRATING CLIMATE-RESILIENCE IN

OECD AND G20 COUNTRIES
Eyre Peninsula (Australia): a strategy was developed to address climate impacts, including increasingly
frequent inundation of coastal infrastructure. A plan was developed using participatory techniques for
decision-making under uncertainty to produce sequenced pathways combining management and structural
measures to adapt to increasing risks.
Japanese Railways (JR) (Japan): Extreme heat can cause railroad tracks to buckle, as heat causes steel to
expand putting stress on ties, ballasts, and rail anchors that keep the tracks fixed to the ground. To achieve
“zero accidents” due to track buckling, JR has raised the standard for estimated maximum performance
temperature of its railroads from 60°C to 65°C to guide future investments. JR has also developed
maintenance vehicles that detect potential joint openings.
Sponge City (Hong Kong, China): Prone to tropical cyclones and with an average annual rainfall of
2400mm, Hong Kong is one of the world’s wettest cities. Considering future climate impacts, the Drainage
Services Department (DSD) of Hong Kong, China is implementing a nature-based drainage system with the
aim of building up flood resilience and improving public spaces, instead of constructing flood resistance
infrastructure. A future project is a flood retention lake that will become an open green space for public use
on dry days, and operate as a flood retention site during the wet season (Leung, 2017).
Hurricane Sandy Rebuilding Strategy (USA): In August 2013, the Hurricane Sandy Rebuilding Task Force
issued the “Hurricane Sandy Rebuilding Strategy” to support the rebuilding of the region affected by the
2012 hurricane. The report contains policy recommendation on ensuring a regionally coordinated and
resilient approach to infrastructure investment. It aimed to build back smarter and stronger infrastructure by:
aligning federal funding with local rebuilding visions; reducing excessive regulation; coordinating the efforts
of the federal, state, and local governments, with a region-wide approach to rebuilding; and ensuring the
region’s climate change and disaster resilient rebuilding (OECD, 2014a).
3 Strengthening the enabling

environment for climate-
This section identifies priority areas for ensuring that decision

makers have the information, capacity and incentive to integrate
climate-resilience into infrastructure development and operation.
Efforts to strengthen the enabling environment will facilitate the
mobilisation of finance for climate-resilient investments (section 4).
Key messages Improving understanding of climate change-

●● Decision makers need to have access to high quality related risks and supporting decision making
information, consistent data and capacity to adapt under uncertainty
planning to account for climate change. This can Information on climate hazards, exposure and
be achieved through the development of platforms vulnerabilities are required to inform the development of
and online tools to provide accessible, credible and climate-resilient infrastructure. Traditionally, historical data
transparent information on past and future climate have been used to inform analysis of the potential likelihood
behaviour. Relevant uncertainties should be clearly and severity of impacts. In addressing climate change, these
communicated, and guidance provided on how to historical records need to be complemented with projections
incorporate these into decision-making. Access of how those trends might change in the future.
to information should be complemented with the
development of technical and institutional capacity to Historical or observed climate information provides
manage climate-related risks. a baseline for understanding how risks may evolve in
the future due to climate change. The sophistication
●● Tools for mainstreaming adaptation and encouraging of historical datasets is increasing. For example, global
investments in resilient infrastructure include: climate records between 1901-2016 at a spatial resolution
−− spatial planning frameworks, including of 0.5° (approximately 55 km) are freely available via
vulnerability maps, to improve management of the UEA Climatic Research Unit’s “CRU TS” dataset
climate risks, reduce vulnerability and prevent (Harris et al., 2014). However, there are major gaps in the
the construction of new infrastructure in recording of how those climate trends have translated into
exposed areas; potential hazards, such as floods or droughts. In particular,
data on smaller events are not collected or digitised
−− infrastructure projects and policy appraisals,
(OECD, 2018a). Efforts to recover such historic data, using
including Strategic Environmental Assessment
data sources such as newspapers and public consultation,
and Environmental Impact Assessment; and
can facilitate efforts to ensure that future infrastructure is
−− regulatory and economic standards (such as climate-resilient.
building codes).
Climate projections are needed to understand how future
●● Climate risk disclosure can help raise awareness changes in climate may create risks for infrastructure.
of and encourage efforts to reduce climate-related Most OECD and G20 countries have produced their own
risks to infrastructure, but needs to be tailored to national-level climate projections or downscaled global
national circumstances. The risks from climate climate projections to inform decision-making at national
change are diverse, vary by national and subnational and local levels. While fine resolution projections can be
circumstances and there are multiple possible metrics more informative for infrastructure planning, they depend
for measuring progress in addressing those risks. upon the quality of the larger-scale model in which they
POLICY PERSPECTIVES
STRENGTHENING THE ENABLING ENVIRONMENT FOR CLIMATE-RESILIENT INFRASTRUCTURE . 15
are embedded. Some relevant uncertainties can be across critical infrastructure and to adopt a multi-sector,
explored by providing different scenarios or providing multi-hazard approach to climate risk assessments
probabilistic outputs. Even with these approaches, (OECD, 2014a); (Fisher and Gamper, 2017).
however, long-term, high resolution model results are
Box 3 provides an example of such multisector assessment
inherently uncertain (Frigg, Smith and Stainforth, 2015).
for the risk of flood from the Seine river in Paris. Effective
These uncertainties should be clearly communicated to
collaboration and information sharing among key
users of those projections.
infrastructure organisations is critical for understanding
Historic climate data and climate change projections and addressing these shared risks. A number of regional
can be integrated with other data sources, such as (e.g. EU’s Critical Infrastructure Warning Information
hydrological modelling and information on the location Network), national (e.g. US Partnership Energy Sector
and characteristics of infrastructure assets, to assess Climate Resilience) and local (e.g. Toronto’s WeatherWise
climate risk. Authoritative national and sectoral climate Partnership) initiatives have been established to facilitate
risk assessments can inform strategic plans and policies this (AECOM, 2017).
for climate-resilient infrastructure development. They can
The scale, complexity, and uncertainties affecting analysis
also provide data and a framework for the more detailed
of climate change risks necessitates the engagement of a
assessments necessary for specific infrastructure assets
broad range of stakeholders in climate risk assessments
and development projects. Most OECD and G20 countries
and adaptation planning. These include different levels
have conducted climate risk assessments at national and/
and parts of government, academics, non-governmental
or sectoral levels in which infrastructure is covered (see
organisations, local and indigenous communities and
section 5). While these have tended to be qualitative in
the private sector. Inclusiveness is important given that
nature, they could be further developed or complemented
vulnerability to climate change varies by factors such as
by a quantitative analysis of risk and economic costs.
social class and gender.
Infrastructure systems are interdependent, which means
Well-designed participatory approaches can improve
that climate change impacts on one infrastructure asset
decision-making and build support for implementing
can cascade through the system. These interdependencies
climate-resilient approaches. Experience to date highlights
are particularly high in urban areas due to the dense
the important role of local and indigenous knowledge in
spatial concentration of assets, and may even extend
identifying vulnerabilities and impacts that may not be
beyond territorial boundaries. The floods in Bangkok in
well known because of the highly localised and contextual
2011, for instance, significantly affected the car industry
nature of climate risk (Burton et al., 2012). Community-
in Japan, as suppliers were located in the flood areas.
based adaptation can facilitate local-level participation
This illustrates the need to map interdependencies
BOX 3 MODELLING THE MACRO-ECONOMIC IMPACTS OF A MAJOR FLOOD IN PARIS
In France, the OECD calculated the economic impact of a major flood of the Seine river affecting the Paris
metropolitan area. For this purpose, a hybrid approach was developed, combining modelling of direct
losses, assessment of the impacts connected with the interruption of critical networks and macroeconomic
modelling. Three scenarios were built around the historic centennial flood of 1910, and direct damages were
estimated between USD 3 and 30 billion, with 10 000 to 400 000 job losses and an impact on the national
GDP between 0.1% and 3% cumulated over a 5 year period.
This analysis demonstrated the critical importance of the infrastructure sector:
• 30% to 55% of the direct flood damages were suffered by the infrastructure sector
• 35% to 85% of the business losses were caused by the interruption of transportation and electricity
supply and not by the flood itself.
Source: OECD (2014c).

in local and national adaptation planning (Reid and

Huq, 2014). Examples of stakeholder engagement in risk
assessments and adaptation planning can be found in
Box 4.
Tools and capacity are needed to make raw climate data

useful for decision makers, including national policy-
makers, regulators, private sector and local governments.
The growing demand for easy-to-use climate information
and risk management services has created new business
opportunities. Online platforms and data portals are being
developed by both public and private sector entities to
improve user access to multiple data sets and to deliver
customised risk assessments (see Box 5). For these
platforms to work effectively, it is important that there
is transparency about the underlying data and their
limitations.
Technical guidance is being developed to help decision-

makers to incorporate climate risk into infrastructure.
National standard organisations in Australia, Britain and
the US have released risk management guidelines that
focus on resilience for buildings and infrastructure. The
roads authority in Western Australian has developed
Climate Change Risk Assessment guidelines to identify
climate change risks relevant to construction of roads and
bridges. The United States Federal Highway Agency has
developed a tool to support transportation agencies in
selecting appropriate materials for road surfaces.
One of the major challenges is to help users make

informed decisions given uncertainty about the future
climate and socio-economic changes. Given the long
lifetimes of infrastructure, it is important to take early
action to integrate adaptation into decision making, but
also to ensure flexibility or robustness to address future
uncertainty. Tools such as Robust Decision Making and
Real Options Analysis, portfolio analysis and iterative risk
management are being used to support decision-making
under uncertainty (OECD, 2015a]). Robust Decision Making,
for instance, has been applied to water management in the
Colorado River (Groves et al., 2013) and coastal resilience
planning in Louisiana (Groves and Sharon, 2013).
Simplified techniques for decision-making under

uncertainty can provide valuable insights where the use of
more sophisticated approaches would be disproportionate
or unfeasible (Shortridge, Guikema and Zaitchik, 2017).
Hallegatte (2009) proposes a set of practical strategies to
inform adaptation decisions, such as pursuing “no-regrets”
options and building in extra safety margins where it is
cheap to do so. Stress testing can be used to identify how
infrastructure will perform under a wide range of potential
future climates.
POLICY PERSPECTIVES
BOX 4 STAKEHOLDER ENGAGEMENT FOR

CLIMATE-RESILIENT INFRASTRUCTURE
Northwest Territories, Canada: Canada’s northern

infrastructure is heavily affected by permafrost
degradation. In the Northwest Territories alone,
estimates suggest it could cost as much as
CAD 230 million to adapt existing infrastructure to a
changing climate. The Standards Council of Canada
(SCC) has developed a Northern Advisory Committee,
composed of community members and experts across
the North, to ensure local knowledge is incorporated
into new standards. To date the SCC has released 5
standards that address the unique climate change
impacts felt in the north that impact infrastructure
design, construction and maintenance (SCC, 2018).
Indore, India: since 2010, the city of Indore undertook
a comprehensive process of assessing exposure to
climate risks to develop a resilience strategy. This
included an extensive process of awareness raising
and engagement with communities living in informal
settlements, who are particularly vulnerable to climate
risks, to identify and manage these risks. This was used
to inform the development of the Indore City Resilience
Strategy. External funders worked with community
institutions to support the implementation of
adaptation measures, many of which focussed on the
supply of safe drinking water (Chu, 2016).
Semarang, Indonesia: In Indonesia, a number
of cities are promoting multi-stakeholder
approaches to adaptation planning. In the city of
Semarang, a body called the Initiative for Urban
Climate Change and Environment (IUCCE) was
established to bring together civil society and
NGOs, academics, and practitioners, as well as local
and national government actors to coordinate
local adaptation processes and gather evidence.
The Best Practice Transfer Program is supporting
replication of this multi-stakeholder approach by
other Indonesian cities through city-to-city peer-
learning opportunities. This is complemented by the
Indonesian Climate Alliance, which brings together
local and national government, civil society, donors,
academics, and private sector representatives to
actively support the institutionalization of urban
climate-resilience (Archer et al., 2014).
BOX 5 INITIATIVES FOR COMMUNICATING CLIMATE RISKS AND SUPPORTING

DECISION‑MAKING
Argentina’s Climate Risks Map System (SIMARCC): the Argentinian government’s National Climate Change
Office developed an interactive website (known as SIMARCC) that provides risk maps covering different
scenarios of threats and vulnerabilities related to climate change. This platform combines georeferenced data
on the potential hazards from climate change with data on social vulnerabilities. This tool was designed to be
useful for decision makers in the public and private sectors.
Brazil’s AdaptaClima Platform: the AdaptaClima platform was launched in December 2017 to support the
dissemination of information and material on climate change to decision makers. It is an interactive and
collaborative space for sharing tools, studies and methodologies. The development of the platform was
coordinated by the Brazilian Ministry of Environment (AdaptaClima, 2018).
Copernicus Climate Data Store: this platform is intended to support adaptation and mitigation policies by
providing free access to climate data based on the best available science and tools for interpreting that data.
It provides access to information on historical, current and future climate across the world. This platform is
supported by the European Commission.
European Climate-Adapt Platform: this platform was developed by the European Commission and
European Environment Agency to provide comprehensive, reliable data to inform adaptation decisions. It
includes data on projected climate change impacts, adaptation case studies and an extensive set of tools for
managing climate change impacts.
Silicon Valley 2.0: The County of Santa Clara’s Silicon Valley 2.0 Project created a decision-support tool that
maps infrastructure assets and their exposure to climate-related hazards, and quantifies the risk of asset loss.
The tool is accompanied by a Climate Adaptation Strategic Guide targeting cities, the County and other key
agencies and stakeholders (County of Santa Clara, 2018).
United States Climate Change Adaptation Resource Center (ARC-X): the Cross-Agency Working Group on
Adaptation’s Climate Change Adaptation Resource Center (ARC-X) helps local and regional government in
small to mid-size US cities make decisions about resilience planning. It provides access to data on climate
risks, guidance on developing adaptation strategies, case studies and information on potential funding
opportunities.
POLICY PERSPECTIVES
Enabling climate resilience through policy and development. Integrating climate risk into
regulation decision‑making at this early stage of planning can
help to minimise downstream costs associated with
Public policy and regulation play a key role in enabling adaptation measures and maintenance costs, and
and promoting climate-resilient infrastructure avoid locking in maladaptation. It can also facilitate
development. Climate change risk assessments and ecosystem-based approaches to adaptation, by
adaptation measures need to be integrated across maintaining restrictions or creating incentives that
existing policy processes and decision cycles. This protect ecosystems (e.g. wetlands and forests) and
process of mainstreaming requires the identification ensure the ongoing provision of ecosystem services
of suitable entry points at multiple levels of decision- such as flood defence and erosion control. Box 6
making: national, sectoral, project level and local level. provides an example of how South Africa is promoting
Adaptation choices at these different levels are often Ecosystem-based Adaptation.
linked, so that a decision at the national level may
enable or constrain adaptation options at a local level. Spatial planning frameworks tend to be established
They also interact with other policy objectives, creating nationally, but local authorities are involved in their
synergies and trade-offs. It is therefore important to implementation and may issue their own regulatory
adopt a whole-of-government approach to adaptation requirements. For example, the Danish parliament
planning (OECD, 2009). passed a law enabling municipalities to account directly
for adaptation in local city planning decisions. The new
National policies law allows municipalities to ban construction in certain
National adaptation planning can help identify entry areas solely due to reasons relating to climate change
points for mainstreaming, and promote cross-sectoral adaptation (OECD, 2013).
coordination. Most OECD and G20 countries have, or SEA and EIA
are developing, national adaptation strategies and
plans that address one or more core infrastructure A key element of mainstreaming adaptation into
sectors, such as transportation, energy, and water. For infrastructure is the integration of climate risks into
example, Brazil’s national adaptation plan includes the decision-support tools used in standard policy
a strategy dedicated to infrastructure (transport, and project appraisals. A Strategic Environmental
urban‑mobility and energy). Local governments are also Assessment (SEA)1 designed to account for climate risk
developing adaptation strategies or plans, particularly can serve as a tool for mainstreaming adaptation into
in federated countries such as Canada, where most infrastructure-related policies, plans and programmes.
local governments have adaptation strategies or plans The Netherlands, for example, used an SEA in the
(OECD, 2013). development of a Delta Programme to protect the
country against sea level rise and more severe rainfall.
Infrastructure adaptation to climate change can be The SEA compared the “business as usual’ scenario
facilitated by incorporating climate risk into broader to alternative strategies, and promoted a new risk-
infrastructure planning frameworks, as well as the based approach that resulted in more cost-effective
critical infrastructure protection programmes that climate protection, while creating opportunities for
are in place in over 20 OECD countries (OECD, 2018). other services such as nature conservation and cultural
In the UK, for instance, major infrastructure project heritage (Jongejans, 2017).
applications are reviewed by the Planning Inspectorate
to ensure compliance with a set of National Policy
Statements that include an explanation of how to 1. Strategic Environmental Assessment refers to a range of “analytical
account for climate change adaptation. Developers of and participatory approaches that aim to integrate environmental
major projects are providing evidence to inspectors considerations into policies, plans and programmes and evaluate the
of how they have considered the latest climate interlinkages with economic and social considerations” (OECD, 2006).
projections, and taken into account climate robustness
to extreme changes beyond the range provided by those
projections, in their project proposals.
Spatial planning can help reduce infrastructure

exposure to climate hazards by determining the
possible locations for different types of infrastructure
BOX 6 PROMOTING ECOSYSTEM-BASED ADAPTATION IN SOUTH AFRICA
South Africa is promoting the use of Ecosystem-based Adaptation (EbA) which uses biodiversity and ecosystem
services to help people adapt and build resilience to the adverse effects of climate change. EbA encourages the
use of ecological infrastructure as a complement or substitute for built infrastructure. Ecological infrastructure
includes healthy mountain catchments, rivers, wetlands, coastal dunes, and nodes and corridors of natural
habitat, which together form a network of interconnected structural elements in the landscape.
The Department of Environmental Affairs and South African National Biodiversity Institute (SANBI) led
the development of a Strategic Framework and Overarching Implementation Plan for Ecosystem-Based
Adaptation (also known as the EbA Strategy, 2016 – 2021). The Strategy identifies four areas of work
that will contribute towards achieving this vision. These are structured into the following outcomes (1)
Effective coordination, learning and communication mobilises capacity and resources for EbA, (2) Research,
monitoring and evaluation provide evidence for EbAs contribution to a climate-resilient economy and society,
(3) Integration of EbA into policies, plans and decision-making supports an overall climate change adaptation
strategy, (4) Implementation projects demonstrate the ability of EbA to deliver a wide range of co-benefits.
As part of implementing the Strategy, South Africa also developed EbA Guidelines, established a
coordinating mechanism to support the implementation of the Strategy and embarked on a pilot project
on ecosystem restoration initiative that is supported by the Adaptation Fund in the uMgungundlovu District
Municipality namely “uMngeni Resilience Project” and the “Taking adaptation to the ground: a Small Grants
Facility for enabling local level responses to climate change in South Africa”.
Source: (DEA and SANBI, 2016).
At the project level, Environmental Impact Assessments Technical codes and standards
(EIA) provide a natural entry point for considering
Regulatory standards, such as technical codes, are
whether infrastructure projects are vulnerable to
being reviewed and strengthened to promote climate
climate change or could exacerbate climate risks
resilience. For example, in 2014 the New York state
elsewhere. In South Africa, a mandatory EIA was
utilities regulator (Public Service Commission) approved
conducted for the expansion of the Port of Durban that
a settlement requiring power utility Con Edison to
included a dedicated report on climate change risks. As
use state-of-the-art measures to plan for and protect
a result of the EIA, changes were made to the original
its electric, gas and steam systems from the effects
design, including making the port higher to cope
of climate change. France’s Nuclear Safety Agency
with sea level rise and developing an environmental
updated its water discharge regulation in case of
management plan to address heavier rainfall and winds
heatwaves, based on new evidence on the impact of
(Kolhoff and Van den Berg, 2017).
discharged water temperature on fish populations
In some cases, governments may need to revise their (Vicaud and Jouen, 2015).
EIA legal frameworks to promote a more consistent
Modifying economic regulations can also lead to
and comprehensive consideration of climate risks in
more resilient infrastructure, by removing barriers to
infrastructure development. The EIA process in EU
investment in adaptation measures. Energy, water and
Member States, for example, has been strengthened
rail regulators in the United Kingdom, for instance,
by an amendment to the EIA Directive (2014/52/
aim to refine their price control review mechanisms
EU amending 2011/92/EC), which places a stronger
to reflect longer asset life spans, and encourage a
emphasis on climate change adaptation and resilience
focus on longer run issues and better management of
across the screening, scoping and assessment process
uncertainty. Similarly, in Germany, the Working Group
(Vallejo and Mullan, 2017).
on Regulation (Future-Oriented Grids Platform) is
examining options within the framework of incentive
POLICY PERSPECTIVES
be valuable in raising awareness within organisations

regulation to allow additional adaptation-relevant
about their exposure to climate risks, stimulating
investments for power generation transmission and
action to reduce those risks. This section focuses
distribution to be accredited or reimbursed (Vallejo and
on the disclosure of physical risks from climate
Mullan, 2017).
change. More information on the other risks related
National governments are revising national technical to climate change - transition risks and liability risks
standards to account for climate resilience. A screening - can be found in the background paper produced
of 6th National Communications to the UNFCCC and for the February 2018 meeting of the Round Table
national associations’ sources show five OECD countries for Sustainable Development, Integrating Climate
(Australia, Canada, Denmark, Germany and Korea) have Change‑related Factors in Institutional Investment.
made revisions to their standards. The Commission on
Government policies can be used to encourage or
Process Safety in Germany, for instance, has updated
require risk disclosure by the private sector, but this is
its technical rule on precipitation and flooding for flood
at an earlier stage for climate resilience than mitigation.
safety of plants subject to the German Major Accidents
Fifteen G20 countries had mandatory greenhouse
Ordinance, while the Korea Expressway Corporation
gas reporting in place in 2015, while the situation for
has strengthened the design requirements for drainage
climate resilience is more complex. Public companies
capacity, bridge design and embankment slopes.
are required to disclose risks that are deemed “material”
Two major international standardisation organisations, in most G20 countries (Task Force on Climate-Related
the European Committee for Standardisation (CEN, Financial Disclosures, 2017). In principle, this covers the
Centre Européen de Normalisation) and International physical risks from climate change, but this does not
Standards Organisation (ISO), are reviewing existing happen consistently. Some countries have introduced
standards to better address climate risk. The CEN is specific initiatives to encourage reporting (Task Force on
amending and extending the scope of the European Climate-Related Financial Disclosures, 2017):
civil engineering technical standards (Eurocodes),
●● Article 173, Law on Energy Transition for Green
with a focus on transport and energy infrastructure,
Growth (France) - listed companies are required
as well as building and construction. They are also
to report on climate change impacts, or explain
amending product standards to account for climate
why they have not done so. Companies are
change. The ISO is working through its Adaptation Task
encouraged to include disclosure of physical
Force to develop a set of standards for vulnerability
climate risks in their reports.
assessment, adaptation planning, and adaptation
monitoring and evaluation (ISO, 2015). Both of these ●● Adaptation Reporting Power (United Kingdom) -
reviews cover the assessment, re-use and retrofitting this gives the government the power to require
of existing infrastructure, as well as the design of new many types of infrastructure providers to report
developments. on their exposure to climate risks. The first round
of reports were mandatory, but it is now being
The development of new standards or the modification
used on a voluntary basis.
of existing ones to better account for climate change
increases the extent to which the relevant climate ●● Securities and Exchange Commission (SEC)
risks are managed as a matter of course. An underlying guidance (United States) - the SEC issued
challenge in achieving this is the tension between two “interpretative guidance” in 2010 stating that
goals: establishing standards that are straightforward climate risks that are material to the company
and can be applied consistently, while also taking into were covered by existing disclosure requirements.
account the uncertain and context-specific nature of
climate risks. Where risks are context specific, care
should be taken to ensure standardised approaches
do not lead to systematic over- or under-investment in
resilience.
Facilitating climate risk disclosure

2. For the purpose of this report, financial climate risks refer to physical
Increased public disclosure of climate risks2 can risks which can be event driven (acute) or longer-term shifts (chronic)
support infrastructure resilience by informing in climate patterns. These are different from transition risks, which are
financial risk associated with the transitions to low GHG economies.
investment decisions. The process of reporting can also
These initiatives provide considerable flexibility in how There is a growing number of private sector and
companies choose to report climate impacts. The G20 voluntary initiatives to support risk disclosure, aimed at
encouraged greater consistency and action on this different audiences.
topic by mandating the Task Force on Climate-related
Financial Disclosure (TCFD) to create a voluntary
Infrastructure developers and engineers
framework for climate-related risks and opportunities Climate resilience is now being integrated into
(Task Force on Climate-Related Financial Disclosures, frameworks of voluntary sustainability rating
2017) . This framework calls for the reporting of, inter programmes. Potential benefits of these ratings
alia, physical risks relating to the impacts of climate include increased performance, reduced costs and
change, with a focus on the following areas (Task marketing advantages. They provide a consistent form
Force on Climate-Related Financial Disclosures, 2017): for tenderers to require, and bidders to demonstrate,
governance, risk management, strategy and metrics. compliance with sustainability objectives. Sustainability
rating tools include:
Climate risks do not have a single metric, equivalent
to the tonnes of CO2eq that is commonly used for ●● Infrastructure Sustainability Rating Tool
mitigation3. Yet investors and lenders need to have (Australia)
reasonably comparable and usable data with which to
●● CEEQUAL (UK)
compare the characteristics of their investments. The
TCFD guidelines suggest indicative metrics to consider ●● ENVISION (USA)
using to inform investment decisions, but identifies the ●● SURE Infrastructure Resilience Standard
development of methodologies, datasets and tools as an
area where further work is required. There are no comprehensive statistics available on
the extent to which infrastructure is being covered by
Frameworks for risk disclosure should be tailored these rating programmes, but the value of rated assets
to national circumstances. Developing countries remains a small proportion of total investment. For
will be particularly adversely affected by climate example, the global capital value of certified projects
change, but also rely upon investment for economic under the Infrastructure Sustainability Rating Tool is
development. Approaches to climate risk disclosure, AUD 8 billion. However, there are initiatives underway
and incorporation of these risks into decision-making, to increase use of these tools. For example, since
should be designed to avoid deterring investment 2016 all public works in Los Angeles are required to
in developing countries. Approaches to disclosure demonstrate compliance with the ENVISION standard
should also account for differences in capacity and the (Meister Consultants Group, 2017).
sophistication of financial markets to avoid generating
undue administrative burdens. Investor initiatives
Voluntary guides, toolkits and standards for Investors are taking an increasing active role in
requesting information on the exposure of their assets
disclosing climate risks
to the risks of climate change. These risks include
Tools for disclosure should encompass both the physical risks from climate change, and those arising
physical vulnerability of specific assets, and examine from the move to a low-GHG economy. Voluntary
whether management responses are sufficient to disclosure initiatives have been developed to meet this
ensure continual management of climate-related need. They include analysis of the risks from climate
risks. Relevant initiatives are being developed to change within broader frameworks of sustainability.
support this ambition. For example, EBRD and the If designed well, they have the potential to encourage
Global Centre of Excellence on Climate Adaptation infrastructure owners and operators to improve their
(CGECA) are currently developing metrics for climate management of climate risks.
risks and opportunities, and identifying how climate
Some of the main initiatives that address climate risks
risk information can be incorporated within financial
include:
reporting systems.
●● CDP - this global reporting framework covers a
range of sustainability issues, including climate
resilience. They report that 650 investors,
3. There are, nonetheless, differences in the climate and other effects of representing USD 87 trillion of assets under
long-lived and short-lived greenhouse gases and other climate pollutants
management request information under this
that are captured by the CO2eq metric.
POLICY PERSPECTIVES
framework. Over 6 300 companies currently financially material risks, including physical risks
report through this framework. from climate change.
●● Global Reporting Initiative (GRI) - this modular Further refinements of these initiatives will help
reporting framework is widely used, with 93% to ensure that they are effective in encouraging
of the world’s 250 largest corporations having companies to consider climate resilience in their
adopted it. The modules include some metrics operations. In particular, the metrics relevant to
relevant to climate risks. resilience are generally expressed in non-financial
terms (e.g. water consumption), which do not readily
●● Sustainability Accounting Standards Board
fit within the financial models used by investors. The
(SASB) - this initiative, based in the United States,
TFCD recommendations are encouraging further
provides guidance for corporations on how to
work in this area to refine metrics and encourage
disclose material sustainability information
harmonisation between systems.
through their financial reporting. The framework
includes 79 industry standards identifying
4 Mobilising investment
in climate-resilient
infrastructure
This section explores how climate resilience can be mainstreamed into the identification, design and
financing of infrastructure projects. It identifies mechanisms through which public support can help to
mobilise private finance for climate resilience. These mechanisms will be most effective when combined
with the measures to strengthen the enabling environment (section 3).
Key messages the project developer at the design stage unless

there is a government requirement to do so.
●● Climate impacts will have implications for
For Public Private Partnership (PPP) contracts,
existing global infrastructure investment needs,
it is important to clarify the allocation of
including increasing, decreasing, or re-directing
responsibilities regarding climate-related risks
particular investment needs in relevant sectors,
planning, management and response.
particularly flood defences, and water supply and
sanitation. The use of tools for decision-making ●● Lenders and public funders are increasingly
under uncertainty can reduce the need for costly using risk screening to identify infrastructure
retrofitting while reducing upfront costs. Natural that may be vulnerable to climate change. One
infrastructure and other flexible or innovative of the emerging lessons is that screening should
approaches to climate-resilient infrastructure be combined with support to generate solutions
may even be cheaper than traditional approaches to the risks that have been identified in the
in some circumstances. Global studies find that screening process.
the benefits of investing in resilience outweigh ●● Public finance and policies can be used to
the costs with high benefit-cost ratios, for mobilise private finance for climate-resilient
example of investment in flood defences for infrastructure. Support for project preparation
coastal cities. can help to address capacity constraints relating
●● Developing and communicating infrastructure to climate resilience. Blended finance can be used
plans can help investors to identify investment to improve the risk-return profile of investments
opportunities. Developing these plans provides where appropriate, in combination with efforts
an opportunity for decision makers to take a to improve the enabling environment for private
strategic view of how considerations such as investment.
climate change will affect infrastructure needs
in the coming decades, and design sequenced
packages of investment (“pathways”) that address
interconnections and increase resilience in a way
that cannot be achieved by looking at projects in
isolation.
●● Public procurement processes can support

climate resilience by comparing bids’ costs over
the asset lifetime. This includes considering both
operating expenses (OPEX) as well as capital
expenses (CAPEX). The increasingly severe
impacts of climate change later in the design life
of the project are likely not to be considered by
POLICY PERSPECTIVES
MOBILISING INVESTMENT IN CLIMATE-RESILIENT INFRASTRUCTURE . 25
Scaling-up finance for climate-resilient There can be a strong business case for making these
infrastructure investments in climate-resilient infrastructure. The
global studies cited above all find that the benefits of
There is already a significant gap between total investing in resilience outweigh the costs. In a different
projected infrastructure needs and trends in context, analysis of Alaskan infrastructure resilience
infrastructure investment. OECD estimates finds high ratios of benefits to costs (Melvin et al., 2017).
USD 6.3 trillion per year is required under Natural infrastructure and other flexible or innovative
business‑as‑usual just to meet the infrastructure approaches to climate-resilient infrastructure may even
needs for continued economic development, while be cheaper than traditional approaches (see Box 7).
global investment was estimated to be USD 3.4 trillion
in 2014 (Bhattacharya et al., 2016). Thus, rather than Financing for climate-resilient infrastructure will
being looked at in isolation, there is significant scope require a mixture of public and private resources. The
for mainstreaming climate resilience considerations split between these sources of finance for infrastructure
as part of broader efforts to address this existing varies, with the share of public finance estimated at
infrastructure investment gap. More information on this 60-65% in developing countries compared to 40% in
broader challenge can be found in Investing in Climate, developed countries (Ahmad, 2016; Bhattacharya et al.,
Investing in Growth (OECD, 2017b) and Crossing the Bridge 2016). There are no comprehensive data on the finance
to Sustainable Infrastructure (Mercer & IDB, 2017). flows for climate-resilient infrastructure, thus it is not
possible to assess the relative roles the public or private
Climate impacts will have implications for existing sector is currently playing in financing climate-resilient
global infrastructure investment needs. There are infrastructure. However, finance flows for adaptation
no comprehensive estimates of these needs for from public sources, including governments, bilateral
G20 countries, but sectoral estimates provide some development finance providers, multilateral climate
indications of the potential scale of investment needs funds and development banks and development
and allow for more detailed analysis than is possible finance institutions continued an upwards trend in
at the global level. The estimates that exist are not 2014 (UNEP, 2016). There are currently insufficient data
directly comparable due to differences in assumptions to assess trends in private sector financing for climate
and methodologies (OECD, 2015a). A study of 136 resilience.
major coastal cities found that an additional USD
50bn per year would need to be invested in flood Development finance institutions – national, bilateral
defences to offset the impacts of climate change and multilateral – all play an important role in
(Hallegatte et al., 2013). Hinkel et al. (2014) estimate supporting climate-compatible infrastructure,
that an additional USD 12-71 billion would need to be both by financing infrastructure projects as well as
spent on flood defences by 2100 to address sea-level supporting the necessary policy change required to
rise. National-level estimates tend to be higher than the make infrastructure low GHG and climate-resilient.
global results would suggest. They are also increasingly key players in supporting
countries to mobilise-investment, by developing
These estimates help clarify the scale of funding needs infrastructure pipelines, by investing in new greenfield
for climate-resilient infrastructure, but the costs for a projects and by de-risking infrastructure investment
given project will vary widely depending on context. and mobilising private investors. Amongst the major
One estimate suggests that, on average, integrating multilateral development banks (MDBs) infrastructure
climate resilience would add 1-2% to the total cost financing still remains a key activity, accounting for
of infrastructure projects (World Bank, 2010a). More USD 31 billion in 2014 (Miyamoto and Chiofalo, 2016).
resources will be required at the project development Some banks – namely, the Asian Development Bank,
and design phases to consider climate risks. A 2011 study African Development Bank and Islamic Development
by IDB found that the additional analysis required to Bank, allocated more than half their portfolios to
identify and evaluate climate change risks can add 25% infrastructure in 2014.
to the average costs of an environmental and impact
assessment (Iqbal and Suding, 2011). Depending on the Comparing the scale of financing for climate resilience
climate resilience measures required, implementation with financing for climate change mitigation is difficult
costs could be negligible, negative or they could require to do, given the former is typically reported in terms
significant changes in project design. The use of tools for of incremental cost (i.e., the additional cost required
decision-making under uncertainty can reduce the need to make an asset resilient to climate change rather
for costly retrofitting while reducing upfront costs. than reporting the total value of the investment made
resilient to climate change) while the latter is reported Mainstreaming climate resilience at the project
in terms of total capital cost in the MDB reporting. For investment level
example, in 2016, MDBs reported over USD 27.4 billion
in climate finance commitments, with USD 6.2 billion Mainstreaming resilience into infrastructure pipelines
going to climate change adaptation (Joint MDB and pathways
Climate Finance Group, 2017). However, the fact that
All infrastructure sectors will be affected by risks
approximately half of this incremental adaptation
arising from climate change, albeit to varying extents.
finance went towards infrastructure suggests that the
It will be essential to mainstream climate resilience,
total value of climate-resilient infrastructure could be
in a proportionate way, throughout the full pipeline of
significant, even when compared to mitigation4.
projects to ensure that they are consistent with future
climate change scenarios.
4. This includes 18% for water and wastewater systems, 18% for energy, Infrastructure pipelines translate countries’ overall
transport and other built infrastructure and 16% for coastal and riverine
policy objectives into coherent sets of infrastructure
infrastructure (AfDB et al., 2017).
projects. Developing these pipelines and supporting
institutions can yield the following benefits
(OECD, 2018):
●● Increase transparency and predictability for

private investors.
●● Ensure that the cumulative total of projects being

planned is consistent with overall objectives.
●● Improve sequencing of inter-related projects.
●● Inform the development of the supply chain; and
BOX 7 COPENHAGEN: WORKING WITH ECOSYSTEMS TO COST-EFFECTIVELY BUILD

RESILIENCE

Cloudbursts (sudden heavy rainfalls) are predicted to become more severe in Copenhagen as a result of climate
change. During these periods of heavy rainfall, the drainage capacity of the sewers can be overwhelmed,
leading to flooding. A cloudburst in 2011 led to damages of more than EUR 600 million from flooding.
The 2012 Cloudburst Plan identified an initial set of measures would be required to address the rising hazard
from increased periods of rainfall. These have been subsequently developed and refined:
• Property-level measures: these measures reduce damages when floods occur, including anti-backflow
valves to prevent sewer water from entering basements
• Green space and waterway restoration: this can help to facilitate the flow of water and provide
additional amenity value
• Grey infrastructure: a tunnel would be built to enhance drainage capacity in heavily built-up areas,
roads are to be redesigned so that they can be used to channel excess rainfall to the sea
The lifetime costs of those measures were estimated at DKK 13 billion (EUR 1.7 billion), with the majority to
come from water charges, and the reminder to come from private investments and municipal funds. Overall, the
combined measures to address cloudbursts are expected to yield net benefits of DKK 3 billion (EUR 400 million),
compared to net costs of DKK 4 billion (EUR 540 million) that would be incurred for the traditional solution.
Source: (City of Copenhagen, 2015).

POLICY PERSPECTIVES
●● Establish responsibilities and delineate technological and socio-economic changes, for

accountability for actors relevant to delivering infrastructure as a whole. A promising area for this
the pipelines, e.g. responsibilities for issuing is the development of “pathways” of climate-resilient
necessary permits. investments (as discussed in section 3). These go
beyond lists of potential projects in infrastructure
Improving the quality and availability of relevant
sectors to create sequenced packages of investment
infrastructure projects is a first step in making those
that consider interconnections. The use of pathways
projects resilient to climate change. Infrastructure
makes it possible to identify a wider range of options for
pipelines can help to do this by signalling the
addressing uncertainty than would be possible when
availability of bankable projects. For infrastructure in
focussing at the level of individual projects. This is
general, the lack of transparent infrastructure pipelines
still an evolving area, but some emerging practices are
was rated by investors as the second most significant
shown in Box 8.
barrier to infrastructure investment, after uncertain
and unfavourable policies and regulations (Mercer & Ensuring that public procurement accounts for the
IDB, 2017). benefits of climate resilience
OECD analysis found that more progress is required Procurement policies can be used to ensure that
to mainstream adaptation into infrastructure plans publicly financed infrastructure is resilient to the
(OECD, 2017b). The degree of mainstreaming is also effects of a changing climate. On average, government
variable, with some identifying additional projects procurement accounts for 10-25% of countries’
relevant for climate resilience, while others focus more GDP (World Bank, 2017). The process used to make
on the enabling conditions for infrastructure. More procurement decisions for infrastructure have a
generally, there is a need to ensure that infrastructure direct impact on the contractors’ incentive and ability
pipelines are publicly available and clear in specifying to account for resilience. Given the scale of public
the targets for infrastructure provision and associated investment, procurement can also have an indirect
budget (OECD, 2017b). impact in shaping the products offered and structure of
A strategic approach is required to examine relevant market places (World Bank, 2017).
the implications of climate change, along with
BOX 8 EXAMPLES OF INFRASTRUCTURE PATHWAYS

Delta Programme (Netherlands): the Delta Programme is responsible for protecting the Netherlands against
flooding and ensuring freshwater supplies. This is of critical importance given that 26% of the country lies below
sea level. This programme has adopted the concept of “Adaptive Delta Management”, which takes a long-term,
flexible approach to make short-term investment decisions that are prepared for a range of possible futures
(The Netherlands, 2012).
Colorado River Basin (United States): the Colorado River Basin provides water for 30 million people and
is under pressure from growing demand and changing hydrology. Robust Decision Making was used to
identify the main drivers of vulnerability, which can then be monitored to identify when options are no longer
appropriate and develop dynamic portfolios of options for managing supply and demand. The approach
was dynamic, identifying the actions that needed to be taken in the near-term and those that could be
implemented depending on circumstances (Groves et al., 2013).
National Infrastructure Commission (United Kingdom): this commission is required to deliver a national
infrastructure assessment to each parliament (every 5 years). The assessment takes a “whole system approach”
to identify interdependencies and feedbacks, considering a range of possible scenarios for the future. This is
informed by integrated models produced by a consortium of seven universities (the Infrastructure Transitions
Research Consortium).
The procurement process should account for the value variation between countries. Research commissioned
of climate resilience. As discussed above, considering by the Greater London Authority found that it would be
resilience will often entail additional upfront capital or consistent with their legal duties to integrate climate
operational expenditures. Potential providers of resilient resilience into their procurement (LCCP, 2009). Given
infrastructure will be at a competitive disadvantage the potential complexity of the topic, and capacity
unless the benefits of resilience are accounted for. constraints, it recommended the sharing of good
Decision-support tools, such as cost-benefit analysis, practices between subnational governments. However,
should consider the range of potential benefits of efforts are underway to increase uptake.
enhanced resilience. In the UK, this was achieved by
More transparency is needed about the extent to which
producing supplementary guidance for the normal
climate risks are included in public procurement
appraisal framework (HM Treasury and Defra, 2009).
frameworks. UN Environment (2017) finds that the use
The use of lifecycle costing and “green” procurement
of sustainable public procurement is increasing, and
can also ensure a level playing-field for resilient
that two-thirds of the countries they examined consider
approaches.
climate change mitigation. This study does not consider
Procurement policies can facilitate innovation in adaptation or resilience.
the provision of climate-resilient infrastructure by
specifying objectives rather than mandating the use
Screening infrastructure projects for climate risks
of specific technologies (Baron, 2016). In such contexts, Financing institutions and public funders are
it is important that the objectives include transparent increasingly using risk screening as part of their
recognition of climate change when specifying those approval processes for new infrastructure projects (see
performance standards, e.g. relating to performance Box 9). The use of mandatory screening for projects
reliability or reduction in flood risk. The development complements the voluntary disclosure of climate risks
and adoption of recognised standards relating to by organisations, which is discussed in section 3. Some
infrastructure will facilitate this process. major risk screening initiatives include (AECOM, 2017):
Procurement policies at the urban and other ●● The European Union examines major projects
subnational levels of government are also important. co-financed by the European Structural and
On average, subnational authorities account for 59% of Investment Funds for the 2014-2020 period
public investment in G20 countries, albeit with a wide to consider climate risks. Projects being
BOX 9 INTEGRATING CLIMATE RISKS INTO PUBLIC INFRASTRUCTURE PLANNING

Queensland and Tasmania (Australia): these states require cabinet submissions for government projects
to consider potential climate risks. The Queensland Climate Ready Infrastructure initiative requires local
governments to consider climate change adaptation when applying for infrastructure grants to the Queensland
Government.
COAG (Australia): the Council of Australian Governments requires state and territory governments’ strategic
plans for infrastructure in capital cities to cover climate change adaptation. Infrastructure funding is linked to
meeting these criteria.
West Coast Infrastructure Exchange (Canada and USA): was established by the states of California, Oregon
and Washington in the United States and British Columbia in Canada. WCX aims at developing innovative
methods to finance and facilitate the development of infrastructure in the region by developing a framework
for infrastructure investment and principles for certification. The consideration of resilience and climate risks
features among the WCX’s standards for infrastructure projects (WCX, 2012).
National Investment Plan (Costa Rica): the Costa Rican national investment plan for 2015-18 required all new
infrastructure projects to meet resilience objectives.
POLICY PERSPECTIVES
screened have a total value of approximately

EUR 70‑100 billion of investment. BOX 10 RISK SCREENING BY IDB INVEST
●● The European Investment Bank (EIB) has
developed and applied a climate-risk screening The IDB’s private sector investment arm, IDB Invest,
tool as part of its 2015 Climate Strategy. now systematically screens all investment proposals
●● The Inter-American Development Bank (IDB) has to identify climate vulnerabilities. A two-stage
committed to screening all projects for climate process is used for this screening. The first step
risks from 2018, having already undertaken pilot undertakes a rapid assessment to identify whether
studies in a number of countries.
the vulnerability to climate risks is high, medium or
●● The World Bank systematically screens its lending low. Projects that are scored as high or medium are
for exposure to climate and disaster risks, and has then subject to a more detailed assessment. The
developed a set of tools to support that process:
detailed assessment examines, inter alia, whether
https://climatescreeningtools.worldbank.org/.
the project documentation has considered climate
Risk screening by public institutions can influence joint change impacts and made any necessary revisions.
public-private investments: in developing countries,
If necessary, the bank collaborates with the project
with development and state-owned banks contributing
developers to identify measures to strengthen the
around 21% of the financing for privately financed
infrastructure projects (OECD, 2017b). project’s resilience.
Climate risk screening is an essential element of

mainstreamed approaches, but its impact can
be limited if it is implemented in isolation. The
following recommendations can help to improve the
effectiveness of risk screening approaches (Hammill
and Tanner, 2011; Inter-American Development
Bank, 2014):
●● Ensure that users have access to credible and

consistent data sources for undertaking risk
screening, accounting for uncertainties.
●● Strengthen links between risk-screening tool

developers and users to ensure that they are fit
for purpose.
●● Integrate into lending processes at a stage where

there is still scope to make revisions, balancing
against the need for the project to be sufficiently
well-specified to undertake the risk screening
process.
●● Provide support to help users develop climate-

resilient solutions to the risks that have been
identified in the screening process.
Integrating climate resilience into PPPs considered by the private party, and would need to be
addressed by the government in the planning, design
Public-Private Partnerships (PPPs) are an important
and contracting phase.
delivery route for infrastructure: in 2016, USD 71 billion
of investment was committed in PPPs in emerging and Despite the importance of clarifying risks, no OECD
developing economies, predominantly for provision country has explicitly incorporated climate resilience
of electricity and roads (World Bank PPI database). into their PPP frameworks (Vallejo and Mullan, 2017).
The details of these contracts vary, but the essence This is also the case for a set of 16 emerging and
is that they are long-term, fixed contracts. PPPs work developing economies, including Brazil, China, India,
best when the contracts are as complete as possible: Indonesia and South Africa (World Bank, 2016).
in other words, when risks are clearly identified and However, it is important to note that climate resilience
allocated to the different parties. Table 4 provides a may, nonetheless, be considered in the development
summary of recommendations for ensuring that the of PPP projects. For instance, resilience against many
PPP process facilitates resilience. types of existing hydro-meteorological risks may
already be mainstreamed into project technical design
The underlying issue for climate resilience is to ensure
processes and be considered existing best practice, as
that risks relevant to climate change are identified
is often the case of hydropower or dam projects. The
and allocated correctly. The general principle for PPPs
challenge is to ensure that these processes adequately
is that risks should be allocated to the parties who are
consider how risks may evolve in the future, as well
best able to manage those risks. The management of
as how they have been experienced in the past. While
risks can consist of efforts to reduce the risk through
progress at the national level may be slow, initiatives
changes in design or operation, and the use of financial
are taking place for specific projects and sectors (see
instruments to transfer risks to other parties. The
Box 11 for an example).
risks from climate change are particularly difficult to
manage because they are uncertain. Because of this
uncertainty, passing the risk to the private sector can
be expensive, but keeping it in the public sector reduces BOX 11 COLOMBIA’S 4TH GENERATION
the private sector’s incentive to manage the risks. ROAD CONCESSION PPP

A central practical issue is the extent to which climate The La Niña floods of 2010-2011 led to economic
change impacts are covered by relief, compensation or
losses estimated at USD 6 billion, of which 38%
“force majeure” clauses in PPP contracts. These clauses
arose from damage to infrastructure. Roads under
partially or entirely indemnify the concessionaire
against risks that are exogenous and unpredictable concession suffered damage of USD 88 million leading
or unforeseeable. In practice, risks covered by these to disputes between road concessionaires and the
clauses represent potential financial liabilities held government about which parties bore responsibility
by the government. Only a few OECD countries, for covering these damages. In response to this, the
including Australia and United Kingdom, treat weather national infrastructure agency enhanced and clarified
events separately from “force majeure”. In the United
insurance requirements, with technical support from
Kingdom, concessionaires are not eligible for financial
the World Bank. The contract for the latest tranche
compensation following hydro-meteorological events.
The risks from climate change are uncertain, but, in of new roads clearly allocates climate risks to the
some cases, they are now foreseeable based on the concessionaires, on the basis that they will be best
available scientific evidence (IPCC, 2014). placed to manage those risks. Concessionaires have
In addition to this, there can be a mismatch of to hold sufficient insurance to cover their expected
time horizons between the concessionaire and the Probable Maximum Loss. The risk of insurance
infrastructure asset. The concessionaire is only premiums increasing in future due to climate change
incentivised to consider the performance of the rests with the private sector.
asset during the contract term. Bridges, for example,
can have a useful life of 100+ years, while typical Source: (CEPAL and BID, 2012; World Bank, 2016).
contracts are only 20-30 years. As a result, if there are
increasingly severe impacts of climate change later
in the design life of the project, they would not be
POLICY PERSPECTIVES
Table 4 Recommendations for incorporating climate resilience into the PPP process
Potential measures by PPP phase

Project Identification & PPP Examine whether the risks from climate change affect the appropriate choice between PPPs and
Selection Phase other mechanisms for providing infrastructure services
Project Preparation Phase Ensure that the technical and service standards applied to the project consider climate resilience
Design the tender specification to provide room for innovative approaches to climate-resilient
infrastructure provision
PPP procurement phase Ensure that the process of evaluating tenders accounts for resilience benefits, including by
considering net benefits over the life of the asset, rather than the term of the contract
Implementation and contract Identify, analyse and clearly allocate the potential climate risks (and resulting contingent liabilities)
management phase resulting from climate change in the contract. Key terms include “uninsurability” provisions, “force
majeure” clauses
Use insurance, or proof of financial capacity, to ensure that the concessionaire is able to bear the
risks allocated in the contract
Encourage disclosure of climate-related risks, and transparency about risk management,

throughout the life of the contract
Collaborate throughout the contract to facilitate adaptive management in light of changing

climate conditions
Source: Adapted from (PPIAF, 2016).
Project development support, risk mitigation An optimal risk-sharing allocation is crucial to

frameworks and blended finance for bankable ensuring bankability for suitable projects (Rana, 2017).
This determination is typically undertaken at
climate-resilient infrastructure projects
the outset of the project, during the project
A key factor affecting commercial and private conceptualisation and design phase. The resilience
investors’ decision to invest in climate-resilient agenda brings a new dimension to this - given the need
infrastructure is bankability: whether a project has to consider how the allocation of climate-related risks
a sufficient number of key attributes (e.g. adequate will affect actors’ incentives to manage these risks.
collateral, acceptable risk exposure, future cash flow) Within that context, public finance providers can use
to make it commercially attractive. a range of tools to allocate risks effectively and bridge
Several barriers may constrain or hamper the the bankability gap for climate-resilient infrastructure.
bankability of infrastructure projects in general One such tool is project preparation support, in the
which are also relevant for new projects that will form of technical and financial assistance to project
need to be climate-proofed. These include, inter alia, owners or concessionaires. This is particularly
high real and perceived risks associated with these important given the potential additional complexity
investments, weaknesses in the enabling environment, of considering climate resilience in infrastructure
poor project preparation and/or market sounding. development.
Creating a supportive enabling environment will be Blended finance can be used to support investment
critical to driving more climate-resilient infrastructure in climate-resilient infrastructure. In this context,
investment (see section 3). development finance is used to mobilise additional
A particular challenge for funding climate-resilient commercial and private finance by improving the
infrastructure is that many of the benefits may be hard risk‑return profile of investments and helping
to monetise, particularly for protective infrastructure un‑bankable projects become economically viable
such as flood defences. There are, however, growing (OECD, 2018b). Blended finance is not an asset class:
examples of instruments and mechanisms being an effective blended finance transaction typically
implemented to translate the potential benefits of structures traditional financial instruments in such
climate-resilient infrastructure into adequate revenue a way as to attract commercial capital. Therefore,
streams (see Box 9 for examples). blended finance can operate on both sides of the
risk‑return spectrum. For instance, blended finance depreciation periods of infrastructure projects.
can use credit enhancement instruments such as Expanded safeguards that integrate resilience aspects
insurance and guarantees to take on some project are likely to play a key role in this regard, by providing
risks. Alternatively, a project or portfolio of climate- a standard for financing by private/commercial
resilient infrastructure projects can be structured financial actors.
to increase the returns received by commercial
A particular area of interest relates to the potential
investors, thereby encouraging them to take on a high
of insurance or guarantee products that could be
level of risk. It is worth noting that blended finance
developed for climate-resilient infrastructure. Insuring
approaches often combine financial support with a
new and existing infrastructure against future risks
technical assistance facility, which can provide project
due to climate change could be a factor in reducing
preparation support.
financing costs through risk mutualisation. Premiums,
A co-ordinated approach between institutions will be or availability, of such insurance would need to reflect
essential to address systemic bottlenecks and demand climate resilience aspects, as a potential avenue to
for capital for climate-resilient infrastructure. Given both internalise resilience into the project finance,
the long-term nature of infrastructure investments, while reducing actual financing cost. However, this
financing is likely to be contingent on factoring in is dependent upon the availability and commercial
resilience towards further expected or likely climate viability of such products.
change within the long-term time horizons and
Table 5 Instruments and approaches to mobilise private investment
Potential role
Project development facilities and technical assistance Support the development of bankable infrastructure projects
Co-investment platforms and funds Pool capital to directly finance infrastructure

Pool public and private capital
Debt subordination Reduce risk for private investors, as the public sector takes on the
highest risk tranches
Guarantees Improve the credit rating of investment projects
Project development facilities and technical assistance Supports the development of bankable infrastructure projects
Source: Adapted from OECD (2017b).

POLICY PERSPECTIVES
BOX 12 MOBILISING FINANCE FOR CLIMATE-RESILIENT INFRASTRUCTURE
Land development taxes (Morocco): The city of Casablanca is in the process of extending its water network
and flood protection measures to meet the demands from rapid urbanisation. Part of this is funded by
contributions from property developers who are financing a growing share of total investment, from 7% in 2004
to 54% in 2014. The contribution is a share of the price of the property when sold, ranging from 0.7% of the
selling cost for social housing to 1.3% for luxury apartments and buildings, and contributions are waived when
the developments take place in underprivileged neighbourhoods. Special conditions have also been set to
adjust the contribution to the pace of urban expansion, and to harness major urban developments.
The Reef and Beach Resilience and Insurance (Mexico): The Nature Conservancy (TNC) and Swiss Re, with
support from the Mexican state and local government, are linking insurance with the protection of a coral reef
off the coast of Cancún. Coral reefs offer protection against storm damage from waves, yet their condition has
deteriorated in recent years due to a variety of human-induced pressures. It is estimated that a one-meter loss
of reef height could translate into 1,300 square km of inland flooding and USD 20 billion in lost infrastructure
in Mexico. Local businesses dependent on tourism, such as hotels, will pay in to a collective trust that monitors
the condition of the 60 km stretch of reef. A portion of the trust will go towards a premium for a parametric
insurance policy that covers the designated stretch of reef. If the storm is sufficiently severe to trigger the
insurance policy, the payout will cover the necessary rehabilitation efforts.
Environmental Impact Bond (US): In September 2016, the Washington, DC Water and Sewer Authority
(DC Water) issued an Environmental Impact Bond (EIB) to finance nature-based storm water infrastructure. The
EIB uses a “Pay for Success” approach to provide up-front capital for environmental programs, where payment
by the public sector to the private entity is based on measured outcomes. In this case, DC Water had examined
the use of nature-based solutions, but lacked the up-front capital investment needed for deployment. They
were also concerned about taking on debt for the project as nature-based infrastructure for flood management
had not yet been tested in the area. The EIB issued a 30‐year tax‐exempt municipal bond, which will allow
DC Water to pay interest near its municipal rate. In addition, EIB structure provides investors with a financial
premium if the project outperforms its target, and it provides DC Water with a corresponding financial risk share
payment if the project underperforms. The structure allows DC Water to pilot the cost-effectiveness of nature-
based solutions for urban flood management.
Source: (EPA, 2017; The Nature Conservancy, 2018; OECD, 2015b).

5 Coverage of infrastructure in
national climate risk assessments
in OECD and G20 countries
Year Sectoral focus Climate hazard focus

Coastal
Nature of assessment
Author Multi- Transport Water Multi- Flooding

change Qualitative Quantitative
sectors only only hazard only
only
Working Group (Ministry
ARGENTINA of Interior and Transport 2012 x x x
as intermediary)
DCEE 2011 x
AUSTRALIA DCC 2009 x x x x x
ATSE 2008 x x x
Federal Ministry of
Agriculture, Forestry,
AUSTRIA 2013 x x x
Environment and Water
Management
National Climate
BELGIUM 2010 x x x
Commission
BRAZIL Ministry of Environment 2016 x x x
CANADA Natural Resources Canada 2014 x x x Case studies
National Environment
CHILE 2010 x x x
Commission
CHINA Qin, D. (ed) 2015 x x x
CZECH Ekotoxa Ltd., Ministry of
2015 x x x
REPUBLIC the Environment
DENMARK Danish Nature Agency 2012 x x x

Ministry of the
ESTONIA 2017 x x x
Environment
Ministry of Agriculture
FINLAND 2013 x x
and Forestry
Ministry of Ecology and
FRANCE 2009 x x x
Sustainable Development
Federal Environment
GERMANY 2015 x x x
Agency
GREECE Bank of Greece 2011 x x
Farago, T; Lang, I; Csete,
HUNGARY 2010 x x x
L. (eds)
ICELAND Ministry of Environment 2010 x x x
Ministry of Environment
INDIA 2010 x x x
& Forests
Ministry of National
Development Planning/
INDONESIA National Development 2012 x x x
Planning Agency
(BAPPENAS)
Irish Climate Analysis and
Research UnitS (ICARUS)
IRELAND 2010 x x
for the Environmental
Protection Agency
Ministry of Environmental
ISRAEL 2008 x x x
Protection
POLICY PERSPECTIVES
COVERAGE OF INFRASTRUCTURE IN NATIONAL CLIMATE RISK ASSESSMENTS IN OECD AND G20 COUNTRIES . 35
Year Sectoral focus Climate hazard focus Nature of assessment
Author Coastal
Multi- Transport Water Multi- Flooding
change Qualitative Quantitative
sectors only only hazard only
only
Ministry of the
ITALY 2014 x x x
Environment and the Sea
Central Environment
JAPAN 2015 x x x
Council
KOREA Ministry of Environment 2010 x x x
Ministry of Environmental
LATVIA Protection and Regional 2017 x x x
Development
LITHUANIA Ministry of Environment 2015 x x x
Ministry of Sustainable
LUXEMBOURG Development and 2014 x x x
Infrastructure
Ministry of the
MEXICO Environment and Natural 2013 x x x x
Resources
PBL Netherlands
NETHERLANDS Environmental 2012 x x x
Assessment Agency
NEW ZEALAND New Zealand Government 2008 x x x
Ministry of the
NORWAY
Environment
2010 x x x
Ministry of the
POLAND
Environment
2013 x x x
PORTUGAL Portuguese Republic 2010 x x x

RUSSIA Roshydromet 2017 x x x x
SAUDI ARABIA KSA 2015 x x x
SLOVAK Ministry of the
REPUBLIC Environment
2014 x x
Ministry of the
SLOVENIA
Environment
2010 x x x
SOUTH AFRICA Davis, C. (ed) 2011 x x x

Ministry of the
Environment and the
SPAIN
University of Castilla La
2005 x x x
Mancha
Swedish Metrological and
SWEDEN
Hydrological Institute
2015 x x x
Federal Office for the

SWITZERLAND
Environment
2017 x x x
Ministry of Environment
TURKEY
and Urbanization
2012 x x x
UNITED Committee on Climate

KINGDOM Change
2016 x x x
Environmental Protection
UNITED STATES
Agency
2017 x x x
6 Useful tools and reports
Climate change and infrastructure ●● OECD (2018), Blended finance: mobilising

resources for sustainable development and
●● Asian Development Bank (2015), Economic
climate action in developing countries
Analysis of Climate-Proofing Investment Projects
●● OECD (2018), Making Blended Finance Work for
●● IPCC (2012), Managing the Risks of Extreme
the Sustainable Development Goals
Events and Disasters to Advance Climate Change
Adaptation (SREX) Sectoral adaptation
●● IPCC (2014), 5th Assessment Report: Climate ●● IEA (2015). Making the energy sector more
Change 2014: Impacts, Adaptation, and resilient to climate change
Vulnerability
●● ITF (2016), Adapting Transport to Climate Change
●● Vallejo and Mullan (2017), Climate-resilient and Extreme Weather
infrastructure: getting the policies right
●● OECD (2018), Financing Water: Investing in
●● Campillo, Mullan and Vallejo (2017), Climate Sustainable Growth
change adaptation and Financial protection
●● OECD (2013), Water and Climate Change
●● OECD (2017), Investing in Climate, Investing in Adaptation
Growth, OECD Publication
●● UIC (2010), Adaptation of Railway Infrastructure
●● IADB (2017), Policy Evaluation Framework on The to Climate Change
Governance of Critical Infrastructure Resilience
in Latin America
Websites and online platforms
●● Adaptation Learning Mechanism - compendium
●● OECD (2014), Boosting Resilience through
of good practices and knowledge on adaptation –
Innovative Risk Governance
http://www.adaptationlearning.net
Green finance
●● Climate-Adapt - European climate adaptation
●● OECD (2012) Towards a Green Investment Policy platform - http://climate-adapt.eea.europa.eu/
Framework
●● Climate & Disaster Risk Screening Tools - toolkit
●● OECD/CDSB (2015) Climate change disclosure in designed to support the screening of World Bank
G20 countries: Stocktaking of corporate reporting investments - https://climatescreeningtools.
schemes worldbank.org/
●● OECD (2017), Investment governance and ESG ●● World Bank Climate Change Knowledge Portal -
factors central hub information, data and reports about
climate change around the world - http://sdwebx.
worldbank.org/climateportal/
POLICY PERSPECTIVES
POLICY PERSPECTIVES
POLICY PERSPECTIVES
REFERENCES. 37
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POLICY PERSPECTIVES
Photo credits:
Front & Back cover: Empty tunnel with footpath lit by sunset © VOJTa Herout / shutterstock.com
Inside cover & page 1: Dark sky above a traffic overpass bridge motorway climate change weather © Jan K / shutterstock.com
Pages 2: Residential building in the public green park during sunrise © VOJTa Herout / shutterstock.com
Page 3: Paraty, Brazil during high tide © Michael Mullan / OECD
Page 4: Clatteringshaws Loch reservoir dam feeding Glenlee hydro Power Station © stocksolutions / shutterstock.com
Page 5: Biking road in green forest of a city park, Bucharest © Ioan Panaite / shutterstock.com
Page 6: Very old stone bridge over the quiet lake with its reflection in the water © VOJTa Herout / shutterstock.com
Page 11: Smart city & wireless communication network, abstract image internet © jamesteohart / shutterstock.com
Pages 12 & 13: Aerial view HDB housing, Singapour highway - green trees & vehicles in traffic © Trong Nguyen / shutterstock.com
Page 14: Detail shot with a bicycle traffic light switched to green colour © roibu / shutterstock.com
Pages 16 & 17: Paris during the 2018 floods © Michael Mullan / OECD
Page 18: Decorative windmill © Michael Mullan / OECD
Page 23: Heavy snow in Paris © Jane Kynaston / OECD
Page 24: Green city of the future. Harmony of city and nature © Danila Shtantsov / shutterstock.com
and Charts of financial instruments for technical analysis © Vintage Tone / shutterstock.com
Page 26: Urban rail transit and urban architectural landscape skyline © 4045 / shutterstock.com
Page 26 & 27: Innovative & sustainable energy - fight against climate change, Germany © Christophe Francois / shutterstock.com
Page 29: Tracks in the snow © 4 / Michael Mullan / OECD
Page 32: Road for transportation at twilight, cityscape of Nonthaburi bridge, Bangkok © Travel mania / shutterstock.com
Page 33: Double exposure of graph and rows of coins for finance and business concept © Number1411 / shutterstock.com
Page 34 & 35: Modern intercity train on railway platform © Denis Belitsky / shutterstock.com
Page 36: Office desktop with laptop and various office tools on blurry Moscow city background © Peshkova / shutterstock.com
Page 37: Green wall on exterior of building © Alison Hancock / shutterstock.com
Pages 42 & 43: Composing with wind turbines, solar panels and electricity pylons © gopixa / shutterstock.com
Page 44: Rooftop garden. Environmental friendly and eco-friendly concept © enchanted_fairy / shutterstock.com
Page 45: Open wooden door to the new world with green environment. Climate change concept © leolintang / shutterstock.com
POLICY PERSPECTIVES
Climate-resilient Infrastructure
A co-ordinated policy response is needed to ensure that

new and existing infrastructure networks are resilient to
climate change. This Policy Paper outlines a framework for
achieving this based on the experiences in OECD and G20
countries. It shows how governments and businesses can
collaborate to mobilise investment for climate-resilient
infrastructure.
This Policy Paper was prepared as an input document for

the G20 Climate Sustainability Working Group under the
Argentine G20 Presidency.
The OECD Environment Policy Paper series
Designed for a wide readership, the OECD Environment

Policy Papers distil many of today’s environment-related
policy issues based on a wide range of OECD work. In the
form of country case studies or thematic reviews across
countries, the Papers highlight practical implementation
experience.
Visit our websites

www.oecd.org/environment/
oe.cd/adaptation
Join the discussions

@OECD_ENV
Contacts:
Michael Mullan: [email protected]
December 2018

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POLICY PERSPECTIVES

OECD ENVIRONMENT POLICY PAPER NO. 14

Designing climate-resilient infrastructure −− spatial planning frameworks to redirect

Mobilising public and private investment for

●● Developing and communicating infrastructure

●● Public policies that promote resilience include

●● Public finance can be used to mobilise private

1 Defining climate-resilient infrastructure

2 Planning and designing climate-

BOX 1 GENDER AND CLIMATE-RESILIENT INFRASTRUCTURE

There is an important gender dimension to climate-resilient infrastructure. Vulnerability to climate change

Table 1 Projections of climate change impacts

RCP 2.6 RCP 8.5

Temperature 0.3 - 1.7 C 2.6 - 4.8deg C

Sea levels 0.26 - 0.55 m 0.45 - 0.82 m

Increase in average precipitation in high latitudes, decrease in subtropical and mid-latitude

Table 2 Illustrative impacts of climate changes in different sectors

Changing patterns of Changing patterns

Challenges in making infrastructure resilient to ●● Policy misalignments - regulatory decisions and

Table 3 Examples of adaptation measures for energy infrastructure

BOX 2 SELECTED INFRASTRUCTURE PROJECTS INTEGRATING CLIMATE-RESILIENCE IN

3 Strengthening the enabling

This section identifies priority areas for ensuring that decision

Key messages Improving understanding of climate change-

BOX 3 MODELLING THE MACRO-ECONOMIC IMPACTS OF A MAJOR FLOOD IN PARIS

This analysis demonstrated the critical importance of the infrastructure sector:

Source: OECD (2014c).

in local and national adaptation planning (Reid and

Tools and capacity are needed to make raw climate data

Technical guidance is being developed to help decision-

One of the major challenges is to help users make

Simplified techniques for decision-making under

BOX 4 STAKEHOLDER ENGAGEMENT FOR

Northwest Territories, Canada: Canada’s northern

BOX 5 INITIATIVES FOR COMMUNICATING CLIMATE RISKS AND SUPPORTING

Spatial planning can help reduce infrastructure

BOX 6 PROMOTING ECOSYSTEM-BASED ADAPTATION IN SOUTH AFRICA

Source: (DEA and SANBI, 2016).

be valuable in raising awareness within organisations

Facilitating climate risk disclosure

Key messages the project developer at the design stage unless

●● Public procurement processes can support

●● Increase transparency and predictability for

●● Ensure that the cumulative total of projects being

●● Improve sequencing of inter-related projects.

●● Inform the development of the supply chain; and

BOX 7 COPENHAGEN: WORKING WITH ECOSYSTEMS TO COST-EFFECTIVELY BUILD

Source: (City of Copenhagen, 2015).

●● Establish responsibilities and delineate technological and socio-economic changes, for

BOX 8 EXAMPLES OF INFRASTRUCTURE PATHWAYS

BOX 9 INTEGRATING CLIMATE RISKS INTO PUBLIC INFRASTRUCTURE PLANNING

screened have a total value of approximately

Climate risk screening is an essential element of

●● Ensure that users have access to credible and

●● Strengthen links between risk-screening tool

●● Integrate into lending processes at a stage where

●● Provide support to help users develop climate-

Potential measures by PPP phase

Encourage disclosure of climate-related risks, and transparency about risk management,