By Claudio Saffioti and Jaclyn Yeo
The economic cost of these climate-related natural disasters to Asian economies between 2006 and 2015 is estimated at $126 million daily, and this figure is projected only to increase.
The current and predicted infrastructure shortfall will be exacerbated by climate change. Globally, the frequency of extreme weather events has been increasing during the last decades as have the economic losses caused by climate-related extreme weather events such as flooding, tropical cyclones, heatwaves and droughts.
Asia is particularly exposed to natural hazards and extreme weather events, where six out of the ten most impacted countries between 1997-2016 are from the region. The economic cost of these climate-related natural disasters to Asian economies between 2006 and 2015 is estimated at $126 million daily, and this figure is projected only to increase. (See Figure 1).
Figure 1: Asian countries in the top 10 Climate Risk Index ranking for the period 1997-2016.
(Data source: MMC analysis of the Climate Risk Index 2018 by Germanwatch)
A Widening Infrastructure Gap
The demand for infrastructure investments in Asia is increasing and it is estimated that climate change will widen the critical infrastructure gap experienced in the region by more than 10 percent, reaching $1.7 trillion per annum in 2030. The reliability and efficiency of energy, transport, and water networks will be particularly impacted (see Figure 2).
Figure 2: Demand for infrastructure investments in Asia to be adjusted upwards to strengthen climate resilience
A Rising Imperative to Adapt Infrastructure to Climate Change
The United Nations Development Program highlighted the importance of deploying both structural and non-structural risk mitigation strategies for the development of climate-resilient infrastructure. Structural measures entail physical interventions aiming at reducing or avoiding the impact of a catastrophic event, such as the upgrade of road drainage systems to limit the disruption caused by floods. On the other hand, non-structural risk mitigation strategies encompass the adoption of policies and laws, such as building codes and land use planning, as well as training, education, and public communication initiatives.
Going forward, financing low-carbon and climate-resilient sustainable infrastructure (SI) is key in tackling the impacts of climate change, and efforts have been underway to promote and support SI investment opportunities. However, significant barriers to remain, including a lack of regulatory frameworks and as robust portfolio of “bankable projects” for investors.
From Threats to Impact: Evolving Risk Concerns in Asia-Pacific