The financial implications of climate change risks on global infrastructure are profound, with an estimated annual loss ranging from $732 billion to $845 billion. This figure represents approximately 14% of the global GDP growth for the years 2021-22, according to a report by the Coalition for Disaster Resilient Infrastructure (CDRI).
The Global Infrastructure Risk Model and Resilience Index (GIRI) is an innovative model that estimates the annual investment required to address the infrastructure deficit necessary for achieving the United Nations' sustainable goals. The required investment is projected at $9.2 trillion, with $2.84 trillion to $2.9 trillion expected from middle- and lower-income nations, including India.
The CDRI was launched by Prime Minister Narendra Modi in 2019 during the UN Climate Action Summit. It is a coalition comprising 31 governments, UN agencies, and other organizations. The primary objective of the CDRI is to enhance infrastructure resilience, a critical factor in safeguarding lives and livelihoods and achieving the mitigation targets set by the Paris Agreement and national development goals.
Infrastructure resilience is vital as it allows us to protect lives and livelihoods. Moreover, it contributes towards achieving the Paris Agreement's mitigation targets and national development objectives. The "Resilience Dividend" refers to the benefits gained from infrastructure that is resilient to disasters and climate change.
Climate hazards pose significant risks to global infrastructure. Approximately 30% of the annual financial loss is attributed to natural disasters such as earthquakes and tsunamis. In contrast, 70% of the loss is linked to climate-related hazards like cyclones, floods, and storms. The sectors most at risk include power, transport, and telecommunications, which account for 80% of the potential impact.
Nature-based infrastructure solutions offer resilience at 51% of the cost compared to traditional, grey infrastructure. This cost-effectiveness makes nature-based solutions an attractive option for enhancing infrastructure resilience.
While high-income countries house most global infrastructure, middle- and lower-income nations are disproportionately affected by the financial risks associated with climate hazards. This disparity underscores the importance of targeted investment and resilience-building measures in these regions.
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