Insights
24 May 2022

What does climate volatility mean for critical infrastructure – and what can be done about it?

Cervest

By Cervest

What does climate volatility mean for critical infrastructure – and what can be done about it?

The impacts of climate change are already being experienced around the world, with serious consequences for critical infrastructure. In 2021 alone, there were 10 separate extreme weather events, driven by climate volatility, each costing USD$1.5 billion or more in damages. Decades of historic emissions have made further warming and escalating climate impacts inevitable.

To ensure that critical infrastructure is resilient to physical and financial risk, its owners, operators and suppliers must act now to adapt to ensure it can withstand the turbulence ahead. How well the sector achieves this will significantly influence the future health, wellbeing and prosperity of the communities, businesses and economies that depend on it.

Why is critical infrastructure so vulnerable to climate risk?

Infrastructure, with its long-life physical assets, is uniquely vulnerable to climate hazards like flooding, extreme heat and wildfire, and ports and power plants can’t simply be relocated when a once-safe location becomes exposed to escalating risk. Our current infrastructure was not designed to withstand current climate conditions, meaning buildings and physical assets are being pushed beyond their tolerances. We are already seeing the consequences, such as wastewater treatment plants being unable to cope with record rainfall and cell phone towers flattened by increasingly extreme wind events.

Infrastructure rarely operates in isolation. Its systems – energy, telecommunications, transport, food production, water and waste management – are intricately connected. Damage to one facility or service can quickly cause cascading disruption across others.

Why early and effective adaptation pays dividends

Changing climatic conditions can impact infrastructure as either shocks (extreme events such as flooding, heat waves or wildfires) or stresses (like heat stress, increasing wind, and water scarcity). There are clear business consequences to failing to adapt to both: increased maintenance and damage repair costs, lost revenue due to downtime, reduced productivity and stranded assets will have dire consequences for the sector’s bottom lines.

“Climate-proofing existing infrastructure and building new infrastructure that is more climate resilient makes sound economic sense—on average, the benefits outweigh costs by 4:1. Investments in infrastructure need to directly build resilience, whether for storm-water drainage in cities or protecting coastal communities against sea-level rise.”

Research from McKinsey

How can infrastructure owners and operators protect their assets?

According to the World Bank, “climate risks are not properly understood or considered by decision makers”. Adapting assets to withstand the realities of a changing climate will require a clear view of which impacts they’re likely to face, and when, across a range of possible future climate scenarios. Every stage of an asset’s life cycle must then take this long-term risk into consideration, from the way new assets are designed, to how existing infrastructure is maintained, upgraded and managed.

Addressing climate risk starts with Climate Intelligence

“Infrastructure decisions must be informed by an understanding of the likely frequency and magnitude of climate events and how they are likely to change in the future. It is important to try to understand what the possible future changes might be – be that unpredictable disasters, slow onset impacts or recurring seasonal events.”

‘Understanding risk and resilient infrastructure investment’, DfID.

To effectively plan adaptation strategies, infrastructure owners and operators need clarity about how climate risk may impact their assets, now and in the future. Climate Intelligence (CI) – asset-level intelligence on climate risk to inform decision-making – gives infrastructure owners and operators visibility of every asset they manage or rely on, and offers actionable insights across multiple possible futures.

Decisive action on climate risk begins with discovering, understanding and sharing it with stakeholders, within your own organization and across your sector to create Climate Intelligent Networks™. How can you build resilient infrastructure today using Climate Intelligence? Our free ebook explains how.

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