Globe climate

The world needs massive infrastructure investment to address the growing impact of climate change, according to a new report from the Organization for Economic Cooperation and Development (OECD).

The OECD said record global temperatures in 2023 led to more damaging heatwaves, floods, wildfires and droughts — events that, in turn, placed growing pressure on infrastructure like transportation, communications and utilities.

Economic losses to infrastructure assets from natural disasters have jumped from an average US$198 billion per year in the 1970s to US$1.6 trillion in the 2010s, the report noted.

“This, in turn, multiplies the losses for businesses whose operations are disrupted,” the report said.

At the latest UN Climate Change Conference (COP28), countries committed to increased investment to improve the resilience of infrastructure in the face of these growing challenges, the report notes.

“Countries will need to take action to address this,” it said — adding that the level of investment required is estimated to be US$6.9 trillion annually between now and 2030 to align with commitments under the Paris Agreement and the UN’s sustainable development goals.

“The right type of infrastructure investment can help enhance the quality of growth, by supporting climate action while protecting biodiversity and reducing pollution and enhancing resilience to risks from climate change. But the investments needed are significant,” said OECD secretary-general, Mathias Cormann, in a release.

To that end, the report recommended that governments systematically factor climate resilience into infrastructure planning and decision-making.

Among other things, it called on policymakers to prioritize sustainable projects, to help reduce social and economic vulnerability to climate risks, and to avoid long-term costs.

“Unlocking private investments in climate resilience will require long-term project planning, reducing regulatory barriers, effective risk-sharing arrangements and, when required, the targeted and strategic use of public support to attract private financing — particularly when the timeline for resilience investment returns may constitute a barrier to private sector participation,” Cormann said.

The report also highlighted the efficacy of natural solutions, such as using coral reefs to reduce coastal flood risks, to protect infrastructure assets and services.