1、G20/OECD report on approaches for financing and investment in climate-resilient infrastructure2 G20/OECD REPORT ON APPROACHES FOR FINANCING AND INVESTMENT IN CLIMATE-RESILIENT INFRASTRUCTURE OECD 2024 This work is published under the responsibility of the Secretary-General of the OECD.The opinions e

2、xpressed and arguments employed herein do not necessarily reflect the official views of OECD member countries.This document,as well as any data and any map included herein,are without prejudice to the status of or sovereignty over any territory,to the delimitation of international frontiers and boun

3、daries and to the name of any territory,city or area.OECD(2024)Attribution 4.0 International(CC BY 4.0)This work is made available under the Creative Commons Attribution 4.0 International licence.By using this work,you accept to be bound by the terms of this licence(https:/creativecommons.org/licens

4、es/by/4.0/).Attribution you must cite the work.Translations you must cite the original work,identify changes to the original and add the following text:In the event of any discrepancy between the original work and the translation,only the text of original work should be considered valid.Adaptations

5、you must cite the original work and add the following text:This is an adaptation of an original work by the OECD.The opinions expressed and arguments employed in this adaptation should not be reported as representing the official views of the OECD or of its Member countries.Third-party material the

6、licence does not apply to third-party material in the work.If using such material,you are responsible for obtaining permission from the third party and for any claims of infringement.You must not use the OECD logo,visual identity or cover image without express permission or suggest the OECD endorses

7、 your use of the work.Any dispute arising under this licence shall be settled by arbitration in accordance with the Permanent Court of Arbitration(PCA)Arbitration Rules 2012.The seat of arbitration shall be Paris(France).The number of arbitrators shall be one.Cover:Coral Brunner/Getty Images The use

8、 of this work,whether digital or print,is governed by the Terms and Conditions to be found at https:/www.oecd.org/termsandconditions 3 G20/OECD REPORT ON APPROACHES FOR FINANCING AND INVESTMENT IN CLIMATE-RESILIENT INFRASTRUCTURE OECD 2024 Acknowledgements This report was produced by the OECD in sup

9、port of the Brazilian G20 Presidency.The report was prepared by Mamiko Yokoi-Arai and Michael Mullan and benefited from insights and comments from Nicolas Pinaud,Catherine Gamper and Leigh Wolfrom.This report is part of the OECDs horizontal work on infrastructure and the OECDs contributions to the I

10、nfrastructure Working Group under the Brazilian G20 Presidency,coordinated by Nicolas Pinaud.Special thanks are extended to the G20 Brazilian Presidency and delegates of the G20 Infrastructure Working Group,for valuable comments on earlier outlines and drafts of the report.Thanks are also extended t

11、o Lucinda Pearson and Liv Gudmundson who helped prepare the final publication.4 G20/OECD REPORT ON APPROACHES FOR FINANCING AND INVESTMENT IN CLIMATE-RESILIENT INFRASTRUCTURE OECD 2024 Table of contents Acknowledgements.3 Executive summary.6 1 Introduction.8 2 The rationale for building climate-resi

12、lient infrastructure and investing into it.11 How infrastructure is being affected by climate change.11 Benefit-cost analysis of investment into climate-resilience of infrastructure.15 3 Assessing and understanding climate risks.21 4 Role of subnational governments and community considerations for c

13、limate-resilience of infrastructure.24 5 Mainstreaming climate resilience into infrastructure finance.27 Increasing transparency and awareness of climate-related risks in investment decisions.28 Integrating climate resilience into public funding.33 Economic regulation of privately-owned infrastructu

14、re.35 Examining risk financing and risk sharing arrangements to ensure incentive for risk management and enable rapid recovery.35 6 Mobilising additional finance for resilient infrastructure systems.40 Developing a pipeline of investable projects.40 Identifying relevant funding streams.46 References

15、.51 Notes.62 FIGURES Figure 1.Losses from weather-related catastrophes 9 5 G20/OECD REPORT ON APPROACHES FOR FINANCING AND INVESTMENT IN CLIMATE-RESILIENT INFRASTRUCTURE OECD 2024 Figure 2.Benefit-cost ratio values for four adaptation measures for the period 2020-2100,under a 2C scenario 16 Figure 3

16、.Subnational governments are key investors in climate-resilient infrastructure 24 Figure 4.Stylised impact of climate resilience on project cashflow 28 Figure 5.Some examples of adaptation and resilience financing stack 42 TABLES Table 1.Climate risks affecting selected types of infrastructure in di

17、fferent ways 12 Table 2.Selected climate change-induced events damaging infrastructure 13 6 G20/OECD REPORT ON APPROACHES FOR FINANCING AND INVESTMENT IN CLIMATE-RESILIENT INFRASTRUCTURE OECD 2024 Executive summary Infrastructure damages caused by extreme weather and slow onset events in the last ye

18、ars demonstrate how infrastructure is affected by climate change,and are expected to become increasingly severe.Enhancing climate resilience of infrastructure will be critical for achieving sustainable development in a changing climate.Developing countries have an urgent need to expand access to inf

19、rastructure services,such as clean water and electricity,to support progress towards the Sustainable Development Goals(SDGs)which can be particularly challenging when they are vulnerable to climate change.Meanwhile,all countries are faced with the need to manage the increasingly severe impacts of cl

20、imate change on infrastructure.Proportionate,targeted measures to integrate climate resilience across the infrastructure lifecycle can strengthen economic returns,protect social services,and reduce risks to public finances.Governments at all levels should consider investments in upfront climate resi

21、lience of infrastructure assets as it can strengthen the basis of investment returns,and reap cost-benefits for public investment.Recommendations in this report are broad in nature,and application should be balanced within the context of each country.The specific country circumstances will affect ho

22、w each recommendation is adapted and applied.Emerging and developing countries in particular may require specific considerations to be made in the application of these recommendations.Improving understanding of and enhancing transparency on climate risks Actions that allow governments and investors

23、to better assess and understand climate risk should be integrated into investment decisions,and financial structures that support climate-resilient infrastructure should be encouraged.By understanding the role and unique challenges of subnational governments and communities to provide local climate-

24、resilient infrastructure that protects local businesses and communities,targeted action can be adopted to better address the spatially differentiated impacts of climate change.Risk transfer mechanisms and insurance arrangements can provide better climate risk assessment and understanding for infrast

25、ructure assets,and price climate risk,providing a pathway for quicker recovery funds being made available.By improving sustainability reporting,standards,labels and taxonomies,greater visibility of physical climate risk could be achieved,and inform investors of climate risk exposure.Mainstreaming cl

26、imate resilience into infrastructure development 7 G20/OECD REPORT ON APPROACHES FOR FINANCING AND INVESTMENT IN CLIMATE-RESILIENT INFRASTRUCTURE OECD 2024 By leveraging fiscal allocation,and planning and processes,governments can better integrate climate resilience into their infrastructure plannin

27、g.Mechanisms such as National Adaptation Plans(NAPs),Environmental Impact Assessment(EIAs),procurement processes and PPPs could offer opportunities to integrate climate adaptation for infrastructure projects design and planning,and link budgetary allocation.MDB funding and technical assistance plays

28、 a key role in ensuring that climate resilience is better integrated into infrastructure projects in their borrowing countries.The extent to which MDBs and other global funds are structured and made available to developing countries will strongly inform how some of the major infrastructure projects

29、in developing countries are climate resilient.Enhancing access to finance Governments can leverage financial instruments such as green and sustainability bonds to support financing of climate resilient infrastructure.In addition,innovative financial instruments,such as catastrophe(“cat”)bonds,outcom

30、e-based instruments,risk guarantees,and climate resilient debt clauses could provide opportunities for attracting investment.Establishing blended finance mechanisms with climate-oriented objectives can offer an effective mechanism to support the development of climate resilient infrastructure in dev

31、eloping countries.Public facilities for infrastructure financing,such as infrastructure-focussed banks,development banks and dedicated funds that have climate mandates,can provide pathways to attract private sector financing into climate-resilient infrastructure.Governments can consider tax incentiv

32、es for infrastructure assets that encourage greater climate risk reduction and adaptation measures being taken.Mechanisms such as emission trading could provide allowances that could secure funding towards climate resilience,as well as land value capture and asset recycling can provide a means to fu

33、nd climate resilience of infrastructure assets using existing infrastructure assets.8 G20/OECD REPORT ON APPROACHES FOR FINANCING AND INVESTMENT IN CLIMATE-RESILIENT INFRASTRUCTURE OECD 2024 Infrastructure is key for supporting a well-functioning society.It has an essential role in ensuring the well

34、-being of people and the functioning of the economy by enabling the circulation of people,goods and information,providing connectivity and key resources such as water or energy,which sustain critical functions for society.Climate-resilient infrastructure describes infrastructure that is planned,desi

35、gned,constructed and operated in a way that anticipates,prepares for and adapts to the changing climate,while it can withstand and recover rapidly from disruptions caused by changing climatic conditions throughout its entire lifetime.It concerns both new assets,as well as existing ones,which may nee

36、d to be retrofitted or operated differently to account for climate change impacts(OECD,20181).Infrastructure is capital intensive and long-lived,with some assets having the lifetime of decades or centuries.Decisions made today about the location,design and nature of infrastructure have long-term eff

37、ects,including whether investments deliver objectives and anticipated benefits over their lifetime,as well as whether they may need to be retrofitted in the context of climate change.The physical impacts of climate change are becoming increasingly visible,as weather patterns diverge from historic no

38、rms(see Box 1).Climate change is exacerbating risks to the provision of infrastructure services,for example due to the flooding of transport links.It is also influencing the demand for infrastructure services.In some places,milder winters and warmer summers,for example,will reduce energy demand in w

39、inter and increase in the summer,while rising seas will require improvements in coastal defences.Climate change affects infrastructure assets and their operations in diverse ways,which can be caused by both slow onset events and impacts which occur due to extreme weather events,causing damages and d

40、isruptions in a matter of days or hours.Climate change makes infrastructure assets and operations subject to increasingly long disruptions,with ever increasing implications.As most infrastructure assets are interdependent with other systems and a range of societal and economic functions rely on them

41、,the failure of infrastructure can cause a wide range of cascading impacts.However,infrastructure also plays an essential role in building more resilient economies and societies by reducing their vulnerability to the impacts of climate change.For example,resilient transport networks can facilitate r

42、econstruction following a storm.Protective infrastructure,such as flood barriers,can reduce damage due to extreme events.Where infrastructure continues to provide services despite the impacts of climate change,this allows communities and businesses to continue functioning and to absorb shocks to the

43、ir assets better.1 Introduction 9 G20/OECD REPORT ON APPROACHES FOR FINANCING AND INVESTMENT IN CLIMATE-RESILIENT INFRASTRUCTURE OECD 2024 Box 1.Economic losses from weather-related catastrophes Data from Swiss Res Sigma database indicates that losses from weather-related catastrophes have been incr

44、easing at a faster rate than global GDP.This is consistent with an increase in weather-related hazards such as drought,floods and wildfires driven by climate change.It is also influenced by improvements in reporting and increases in the value of the assets located in exposed areas.Annual average eco

45、nomic losses from weather-related catastrophes were more than 200%higher in 2015-2019 than they were in 2000-2004(in constant dollars).Figure 1.Losses from weather-related catastrophes Note:This figure shows reported total economic losses resulting from weather-related catastrophes for all countries

46、 between 2000 and 2019(LHS,in constant 2019 USD billions)as well as the trend in total losses and trend in global GDP(RHS,trend line based on an index with 2000=100).Source:OECD calculations based on loss data provided by Swiss Re sigma and GDP data reported in the IMF World Economic Outlook databas

47、e(Swiss Re sigma,20202)There is a strong economic case for investing in the climate-resilience of infrastructure.While climate-resilience measures can increase the life span of infrastructure,they also play an essential role in protecting investment returns and ensuring business continuity.Investmen

48、ts in climate resilience have shown to have a net-positive impact over time through preventing climate risks and strengthening the basis of investment returns.Investing proactively to achieve climate-resilient infrastructure systems is cost effective,can save lives and support continued economic gro

49、wth.For example,one major study found an average of USD 4 of benefits for every USD 1 invested in climate-resilient infrastructure over the lifetime of the asset(Hallegate,Rentschler and Rozenberg,20193).Analysis in the United States found that adaptation could reduce annual losses to infrastructure

50、 by a factor of ten(Neumann et al.,20214).However,this potential has yet 10 G20/OECD REPORT ON APPROACHES FOR FINANCING AND INVESTMENT IN CLIMATE-RESILIENT INFRASTRUCTURE OECD 2024 to be fully realised.Mobilising finance for climate-resilient infrastructure and making climate resilience a considerat

51、ion for all new infrastructure investments will be critical to achieve climate-resilient infrastructure systems.The need to increase investment flows for climate-resilient infrastructure exists against the context of a significant overall infrastructure finance gap,and challenging macroeconomic cond

52、itions.The economic consequences of COVID-19,and subsequent economic difficulties and geopolitical issues have contributed to rising public debt,inflation and interest rates(OECD,20235).This has increased the cost of new infrastructure,in particular capital expenditure,limited the capacity of the pu

53、blic to finance new investments,and diverted the attention of the private sector to other areas.Given these pressures,and the urgent need to enhance resilience to climate change,it will be essential to maximise the impact and efficiency of public investment,in parallel to unlocking private investmen

54、t.This report examines the rationale for having climate-resilient infrastructure and then the types of risk assessment approaches for climate risk.Regional and local governments,and community considerations will also be made to support climate resilience of infrastructure.It then turns to financial

55、perspectives,looking at the financial flows towards climate-resilient infrastructure,and then aspects that can lead to the mainstreaming of climate-resilient in infrastructure financing.Lastly,it explores how to increase investment flows by looking at the funding and financing of climate-resilient i

56、nfrastructure.11 G20/OECD REPORT ON APPROACHES FOR FINANCING AND INVESTMENT IN CLIMATE-RESILIENT INFRASTRUCTURE OECD 2024 Greenhouse gases emitted into the atmosphere to date have already led to considerable warming and as a consequence intensified climate risks.Global mean temperatures exceeded pre

57、-industrial levels by over 1.4C in 2023(Copernicus,20236).Most land areas experienced an increase in the frequency and intensity of heavy precipitation events since 1950(IPCC,20217).Similarly,the duration,frequency and intensity of droughts increased in many regions of the world since the middle of

58、the past century(Spinoni et al.,20148).Europe experienced its worst drought in 500 years in 2022(Toreti et al.,20229).The duration of the fire weather season(OECD,202310)also increased by 27%globally between 1979 and 2019,with notable increases in western North America,southern Europe,Australia,west

59、ern and central Asia and most of Africa(Jones et al.,202211)(OECD,202310).Average sea levels to date have risen by 21-24 cm compared to pre-industrial levels(NOAA,202212).The various infrastructure investment gap figures that are cited1 do not explicitly take into account the financing needed for cl

60、imate resilience(see section 0).Recent estimates on physical assets,energy and land use could amount to USD 9.2 trillion per year between 2021 and 2050 to achieve net zero(McKinsey,202213).The cost of adaptation for making energy and transportation infrastructure resilience for developing countries(

61、2015-2030)were estimated at USD9-17 billion per year for energy,and USD860 million to USD35 billion per year for transport(UNEP,202314).How infrastructure is being affected by climate change Climate change affects infrastructure assets and their operations in diverse ways.Climate change impacts on i

62、nfrastructure include those caused by both slow onset events,which result from hazards that occur and are sustained over long periods of time(e.g.limited water availability due to drought).Or they could be sudden disasters due to extreme weather events(e.g.,storms disrupting telecommunications netwo

63、rks),causing damages and disruptions in a matter of days or hours.Different infrastructure sectors are exposed to different climate hazards,and can result in the disruption of services(Table 1).For example,droughts are a particular issue for riverine transport,while having less impact on rail,air an

64、d road transport.In contrast,high temperatures may affect road infrastructure at highways and airports,as well as railway lines,while leaving sea and river transport routes largely unaffected(although workers may be substantially affected by extreme heat).Overall,the degree to which climate change p

65、oses risks for infrastructure depends on the type of climate hazard and its interaction with the vulnerability and exposure of infrastructure to it.2 The rationale for building climate-resilient infrastructure and investing into it 12 G20/OECD REPORT ON APPROACHES FOR FINANCING AND INVESTMENT IN CLI

66、MATE-RESILIENT INFRASTRUCTURE OECD 2024 Table 1.Climate risks affecting selected types of infrastructure in different ways Infrastructure type Climate hazard Infrastructure impacts Transport Land(roads,railways)Extreme heat Pavement softening(rutting),thermal rail expansion(buckling)Extreme precipit

67、ation Washouts,flooding of roads and railways Riverine flooding Storm surges and sea level rise Inundation and de-stabilisation of coastal road and railway lines Storms,high winds Blockage of roads and railways due to fallen trees and other damaged assets Permafrost melt Buckling and destabilization

68、 of roads and railways Riverine Droughts Riverine transport routes(temporarily/seasonally)becoming unnavigable Riverine floods Damage to ports,ships and cargo,riverine transport routes temporarily becoming unnavigable Storms,high winds Marine Sea level rise and storm surges Inundation of ports Tempe

69、rature rise Changing demand for ports and Artic waters become navigable Storms,high winds Damage to ports,ships and cargo,certain transport routes(temporarily)becoming unsafe Energy Hydropower Droughts Reduced hydropower production,with the possibility of stranded assets if drops in water levels per

70、sist Floods Damages to hydropower plants Nuclear Droughts and/or high temperatures Reduced availability of cooling water Riverine flooding Damage to assets,safety issues,pollution Sea level rise and storm surges Solar Extreme temperatures Reduced efficiency of solar panels Energy sector overall Extr

71、eme temperatures Increased demand for cooling,increased pressure on the power grid Sea level rise,storm surges Inundation of coastal power plants,transmission and distribution lines Wildfires Damage to power production assets,transmission and distribution lines Riverine flooding Disruption of energy

72、 supply due to flooding of transmission lines or power plants Storms,high winds Power outages,damage to power production assets,transmission and distribution lines Telecommunications Extreme heat Overheating of data centres Riverine floods Flooding of data centres,radio/television stations,telecommu

73、nications towards,distribution lines,etc,Sea level rise and storm surges Extreme precipitation Storms,high winds Damage to telecommunications towers,distribution lines Wildfires Burning of transmission cables,telecommunications towers Water supply,waste-and stormwater infrastructure Extreme heat Inc

74、reased evapotranspiration from reservoirs,increased need for water treatment Extreme precipitation Sewage overflows,overtopping of dams,levees and reservoirs,increased need for water storage capacity Riverine flooding Contamination of water sources,overtopping of dams,levees and reservoirs,increased

75、 need for water storage capacity Droughts Reduced water supply Sea level rise and storm surges Salinisation of water supply,inundation of water treatment infrastructure Note:While this table gives an illustration of potential climate hazards and impacts that can occur for various infrastructure type

76、s,it does not provide an all-encompassing list of infrastructure types,climate hazards and impacts Source:Based on(OECD,20181)and(IISD,202115)13 G20/OECD REPORT ON APPROACHES FOR FINANCING AND INVESTMENT IN CLIMATE-RESILIENT INFRASTRUCTURE OECD 2024 Infrastructure damages caused by extreme weather e

77、vents in the last years demonstrate how infrastructure is affected by climate change.Between 2000 and 2020,small island developing states(SIDS)and least developed countries(LDCs)had an average of 23 and 7 natural disasters per 1,000 square kilometres,respectively.This translates to between 10 and 30

78、 times more disasters than experienced in OECD countries(OECD,202416).In SIDS,the estimated annual damage of coastal flooding amounts to EUR1.54 billion for all SIDS combined,which include direct damage to buildings,infrastructure,and agriculture(EU Joint Research Centre,202317).In the United States

79、,the number of blackouts caused by extreme weather events increased from 5 to 20 annually in the 1990s to between 50 and 100 in the early 2010s(Castillo,201418)(Chang,201619).Table 2 provides a non-exhaustive overview of examples of infrastructure damage caused by climate change-induced extreme even

80、ts in the recent past.Table 2.Selected climate change-induced events damaging infrastructure Year Type of event Location Link to climate change Infrastructure Damage 2018 Wildfire(“Camp Fire”)United States Climate change was found to have doubled the extreme weather that facilitated the wildfire(Wil

81、liams et al.,201920)(Goss et al.,202021)19,000 assets destroyed,including homes,hospitals,schools and business buildings(Fischer et al.,202122).2019 Storm(“Typhoon Hagibis”)Japan The typhoon was found to be 67%more likely due to climate change(Li and Otto,202223)Levees destructed at 135 locations;10

82、 trains and 120 carriages damaged in a flooded depot.Due to damages to power and water infrastructure,22 000 households lacked power,while 133 000 homes were without water for over two weeks(Tulane University Law School,202124)2021 Ahr Valley Floods Germany Climate change increased the intensity of

83、the rainfall associated with the floods by 3-19%and heightened their likelihood by 1.2 to 9 times(Tradowsky et al.,202325).Over 50 bridges,600 km of rails and three federal highways damaged and out of operation for months.Buildings,the transport infrastructure and sector suffered around EUR 14 billi

84、on of direct and indirect damages(Prognos,202226)2022 Drought Europe The drought was found to be 5 to 20 times more likely due to high temperatures associated with climate change(Schumacher,202227)-30%lower hydropower generation in the first 6 months of 2022 for the French utility company,EDF,result

85、ing in an income loss of EUR 1.4 billion(S&P Global,202228).Severe fluvial transport disruptions on the Danube and Rhine Rivers(CCNR,202329)2020 Floods in Jakarta Indonesia The flood is assumed to be the highest extreme rainfall since 1866(Lubis et al.,202230).Such event is considered as exacerbated

86、 by climate change by the Indonesia Meteorology,Climatology and Geophysics Agency2 173,000 people were evacuated,66 people died,more than 60%of the residential areas were submerged,and the economic loss reached over US$700 million.The flood cut off electricity and piped water,severed a number of roa

87、ds,and shut down one of the citys two airports(World Bank,202231)2021 Storm(Typhoon Odette)The Philippines Odette is the second most devastating typhoon since 20113.The typhoon increased in speed extremely quickly and affected areas that were almost never touched by typhoons.Such rapid intensificati

88、on is considered common due to climate change.156 cities experienced water shortage,major disruptions to power supply,creating additional pressure on 80%of water systems that rely on power generation.It took months to restore access to basic lifelines,creating additional risks of disease outbreaks d

89、ue to degraded access to safe water and sanitation,in a context where 210 health facilities were also destroyed.All together Typhoon Odette is estimated to have affected 10.9 million people and caused damages to infrastructures worth USD 556.8 million 14 G20/OECD REPORT ON APPROACHES FOR FINANCING A

90、ND INVESTMENT IN CLIMATE-RESILIENT INFRASTRUCTURE OECD 2024 Year Type of event Location Link to climate change Infrastructure Damage(OCHA,202132)2024 Dubai floods UAE Warming atmosphere caused by climate change likely caused extreme rainfalls with more than double the annual rainfall in one day,with

91、 the heaviest rainfall in 75 years in UAE.300 flights cancelled from Dubai International Airport(BBC,202433),with estimates of USD8 billion of aircraft at risk(Jolly,202434)2024 Rio Grande do Sul floods Brazil Combination of climate change,and other causes (Gandra,202435)Operations suspended at Salg

92、ado Filho International Airport(POA).Public transport,including in Porto Alegre,is severely disrupted.Flood waters have cut off towns across the region,as hundreds of roads have been blocked by flooding across Rio Grande do Sul.Power outages are impacting multiple locations.(CRISIS24,202436)581,000

93、displaced citizens and 2.3 million are affected(CASA MILITAR DEFESA CIVIL RS,202437)2024 Russia-Kazakhstan floods Russia Rapid melting of snow and ice combined with heavy rain.Power and water supply disrupted 125,000 displaced citizens(DW,202438)Source:(CCNR,202329)(Fischer et al.,202122)(Fisher and

94、 Gamper,201739)(Goss et al.,202021),(Karels,201940),(OECD,201441),(Prognos,202226),(Schumacher,202227),(S&P Global,202228),(Tradowsky et al.,202325),(Tulane University Law School,202124),(Williams et al.,201920).The severity of climate impacts will vary within countries.For example,cities are partic

95、ularly impacted by heat waves,as the temperature tends to be higher than in the surrounding areas due to the urban heat island effect.In the past 5 years,almost half of OECD cities witnessed a summer daytime heat island effect of more than 3C(OECD,202242).The 2023 G20/OECD report on Financing Cities

96、 of Tomorrow reports that the growth of cities will need to be adapted towards climate change through massive investment(OECD,202343)The differing spatial distribution of climate hazards,overlaid atop of different regions and cities physical,economic and social characteristics,means that there is a

97、strong spatial dimension to consider.Climate impacts on infrastructure also vary between countries,with developing countries being particularly at risk,due to limited resources and adaptive capacity.Furthermore,inequalities,manifested for example by unequal housing conditions and access to healthcar

98、e and infrastructure services exacerbate vulnerabilities in many developing countries to infrastructure disruptions.In 2023,two major dams collapsed after heavy storms around the city of Derna,Libya,leaving at least 4 300 people dead and 40 000 displaced(Zachariah,202344).As most infrastructure asse

99、ts are interdependent with other systems and a range of societal and economic functions rely on them,the failure of infrastructure can cause a wide range of cascading impacts(Vallejo and Mullan,201745).Similarly,droughts and associated low water-on the Rhine River in 2018 prevented shipping on 80%of

100、 days between June and December(Prognos,202246),which had severe implications on plants relying on the river for the transport of raw materials and products in Germanys Ruhr region.The interruption of logistics chains for chemical,petroleum products,ores,other raw materials and goods caused a loss o

101、f EUR 5 billion to Germanys economy in the second half of 2018(CCNR,201947).15 G20/OECD REPORT ON APPROACHES FOR FINANCING AND INVESTMENT IN CLIMATE-RESILIENT INFRASTRUCTURE OECD 2024 Ecosystem damages associated with infrastructure failures can also be significant.After the collapse of two major da

102、ms in Derna,polluted sediments and debris flooded parts of the El Kour Natural Park,harming wildlife in Ramsar protected coastal lagoon areas(CEOBS,202348).Benefit-cost analysis of investment into climate-resilience of infrastructure While climate resilience measures can increase the lifespan of inf

103、rastructure,they also play an essential role in protecting investment returns and ensuring business continuity.Targeted action to address climate risks can increase costs in the design and implementation phase can result in being cost effective(Hallegatte,Rentschler and Rozenberg,201949).Spending on

104、 infrastructure resilience ex ante can reduce repair costs and maintenance needs over time,as well as lower the cost of service disruptions and damages.For example,projects to enhance resilience to wind and water damage in Florida,United States have avoided losses of over USD 81 million when Hurrica

105、ne Matthew struck in 2016,far outweighing the USD 19.2 million implementation cost of risk reduction measures(C2ES,201850).Similarly,while making transport infrastructure resilient to future floods is estimated to make up between 3%to 10%of project investment costs,annual future flood damages can be

106、 42%lower(Hall et al.,201951).In the Peoples Republic of China(hereafter China),every CNY 1 invested in climate resilient infrastructure could deliver CNY 2 to 20 in return over a 30-year period(Ding et al.,202152).For example,the benefits of investing in“sponge city”infrastructure to enhance the re

107、silience of the city of Wuhan,China to heavy precipitation outweigh the costs more than twice over three decades through the avoided the socio-economic costs of waterlogging,reduced municipal water pollution control costs and increased ground water recharge(Ding et al.,202152).An estimation of benef

108、its and costs of public investment into four different adaptation measures across Europe was carried out based on a 2C increase of temperatures from industrial levels:strengthening dikes,establishing retention areas,implementing property damage reduction measures and removing buildings at future flo

109、od risk.The use of retention areas shows strong potential to lower impacts in a cost-efficient way.Strengthening existing dyke systems can prevent floods,although there is the potential of transferring risks downstream.Implementing property damage reduction measures have the highest cost-benefit rat

110、io due to limited implementation investments(Figure 2).In Peru,a benefits and costs analysis was carried out on a number of potential disasters in relation to public investment,and,for example,the rehabilitation of a dyke was estimated at a ratio of 37.5,and prevention and preparedness for mudslides

111、 and floods at a benefit cost ratio of 10(from a 2009 report by UNISDR cited in(CDRI,202353).16 G20/OECD REPORT ON APPROACHES FOR FINANCING AND INVESTMENT IN CLIMATE-RESILIENT INFRASTRUCTURE OECD 2024 Figure 2.Benefit-cost ratio values for four adaptation measures for the period 2020-2100,under a 2C

112、 scenario Note:The costs were calculated as the sum of capital investment costs to implement the measure and maintenance costs.The benefits are the damages avoided by implementing the measure,calculated as the difference between future damages with and without adaptation respectively.Flood losses,co

113、sts and benefits are presented undiscounted in general,so that present and future scenarios with and without adaptation can be compared while giving equal weight to each of them.Discount rates are used to evaluate the cost-effectiveness of the investments required for the four adaptation measures co

114、nsidered.The benefit-to-cost ratio,which is the ratio of total benefits to total costs,is also based on discounted values and was calculated for each NUTS2 region and at country and EU+UK level.Source:Reproduced from(Dottori et al.,202054)Additional social,environmental and economic co-benefits furt

115、her strengthen the case to invest in climate-resilient infrastructure.While environmental aspects must be carefully monitored to avoid potential trade-offs,climate resilience measures can also bring benefits for the environment.For example,making the Slussen lock around lake Mlaren climate-resilient

116、 has given the lake a more natural water balance than the previous lock,benefitting plants and wildlife along the lake and its Natura 2000 protected sites(Vallejo and Mullan,201745).Nature-based solutions(NbS)offer climate resilience building with a wide-range of social and ecosystem co-benefits.For

117、 example,restoring around 6 km of oyster reefs in Mobile Bay,Alabama,United States helped protect the shoreline from coastal erosion by reducing wave energy(by 91%)and height(by 53%),while providing seafood equivalent of half of total oyster harvests in Alabama and lowering nitrogen pollution(World

118、Bank and World Resources Institute,202255).012345678910111213Benefit to cost ratioStrengthening DykesRetention AreasDamage Red.MeasuresRelocation 17 G20/OECD REPORT ON APPROACHES FOR FINANCING AND INVESTMENT IN CLIMATE-RESILIENT INFRASTRUCTURE OECD 2024 Box 2.How climate risk can impact the performa

119、nce of infrastructure assets in markets Utilities are now being affected by climate risk through their financial performance in markets.Utilities that are exposed to extreme weather events,in particular wildfires,are experiencing drops in their share prices due to the potentially substantial liabili

120、ty claims if their infrastructure is found to have started a wildfire.A study found that companies facing high transition risk which are not proactively responding have been valued at a discount in recent years(Qing et al.,202456).In relation to this,shares of companies that are more exposed to tran

121、sition risk or imminent government intervention is priced in the stock market,and not direct risks from climate change itself.Thus,climate risk could be more prominent in terms of impacting stock market performance through transition risk,then physical climate risk itself(Faccini,Matin and Skiadopou

122、lous,202357)(Raimonde and Chediak,202458).While more research is necessary and information asymmetry remains an issue for the stock markets,certain infrastructure assets such as utilities could be affected by climate risk exposure.In addition,policy actions could also have an impact on share prices

123、of infrastructure assets.However,if the impact of physical climate risk were to increase,this could evolve too.Source:(Qing et al.,202456)(Faccini,Matin and Skiadopoulous,202357)(Raimonde and Chediak,202458).Furthermore,it is costly to delay action.Postponing climate resilience measures in infrastru

124、cture can lock in infrastructure damages and service disruptions,as well as costs incurred for repair and retrofit needs.In low-and middle-income countries,the cost of delaying climate resilience investments in infrastructure by ten years was estimated at an additional USD 1 trillion(Hallegate,Rents

125、chler and Rozenberg,20193).In the United States,it is estimated that road repairs due to increasing temperatures would reach a cumulative USD 200 to 300 billion in the absence of adaptation measures by 2100(Chinowsky,202259).Early adoption of climate resilience measures can thus help avoid future co

126、sts and offer comparative advantages by providing robust and reliable infrastructure services.There are two critical elements to the climate-resilient infrastructure financing challenge:Making climate-resilience a consideration for all new infrastructure investments:targeted,proportionate early acti

127、on to mainstream climate resilience into infrastructure projects adds an average of 3%to baseline infrastructure investment needs in the case of power,transport,and water and sanitation infrastructure investments in low-and middle-income countries(Hallegate,Rentschler and Rozenberg,20193).As such,th

128、is challenge is predominantly about mainstreaming climate-resilience into business-as-usual finance flows and decision-making,rather than the total volume of finance required.Investing in infrastructure that targets climate resilience:additional infrastructure investments will be required to address

129、 climate impacts.This includes the construction of protective infrastructure(such as flood defences),as well as new investments required to address weaknesses in existing infrastructure systems(for example,by burying transmission lines or adding redundancy to transport networks).Additional finance w

130、ill be needed for these investments.Integrating climate resilience into infrastructure assets influences the business case for investing in those assets.This is context specific,but generally there is a trade-off between capital costs and revenues.Integrating climate resilience can(modestly)increase

131、 capital costs,but it should lead to more reliable revenues,lower maintenance requirements,lower risk which can support insurance provision,and 18 G20/OECD REPORT ON APPROACHES FOR FINANCING AND INVESTMENT IN CLIMATE-RESILIENT INFRASTRUCTURE OECD 2024 potentially higher co-benefits.However,the capit

132、al costs are visible,while the benefits will materialise over time.As a result,these benefits are not fully valued in public and private decision making.Consequently,investment in resilience looks like a cost to be minimised rather than a source of value to be realised.The additional cost of making

133、assets more climate resilient will depend on the type of hazard and asset.Increasing flood resilience of a road through bigger drainage pipes or trenches requires a small percentage of construction costs,while increasing flood resilience of a railway by elevating it requires 50 percent of its costs(

134、Hallegate,Rentschler and Rozenberg,20193).Box 3.Climate resilience as a vital element of resilient,sustainable and quality infrastructure Climate-resilient infrastructure is an essential element of the broader efforts to achieve resilient infrastructure.Broader infrastructure resilience includes res

135、ilience to non-climate-related natural hazards(such as earthquakes)but also human-induced risks(such as terrorist attacks or industrial accidents)(OECD,202160).This broader resilience capacity is defined by OECD as the“ability to resist,absorb,recover from or successfully adapt to adversity or a cha

136、nge in conditions”(OECD,201461).Resilience is an essential part of sustainable and quality infrastructure investment and development.Thus,while these concepts overlap,sustainable and quality infrastructure respectively represent broader concepts than climate-resilient infrastructure.Sustainable infr

137、astructure includes built and/or natural systems that provide a range of services in a manner that ensures economic,social,environmental sustainability throughout the entire infrastructure lifecycle(from planning to decommissioning and repurposing),in line with the Sustainable Development Goals(OECD

138、,202160).Sustainable infrastructure is thus a broader concept,encompassing considerations of usefulness,viability,efficiency,technical stability,financial sustainability,good governance,while being environmentally and socially sustainable,and contributing to both climate change adaptation and mitiga

139、tion goals.Quality infrastructure represents an even broader concept,which,besides being aligned with the Sustainable Development Goals and contributing to their delivery,aims to maximise the economic,social,environmental,and development impacts of infrastructure(OECD,202162).Furthermore,it focuses

140、on raising the economic efficiency of infrastructure throughout its lifecycle,while integrating environment and social considerations and enhancing resilience.The OECD has been championing quality infrastructure through several initiatives,including support for the development of the G20 concept for

141、 quality infrastructure investment.Source:(OECD,201461),(OECD,202160),(OECD,202162).On the other hand,some resilience-building interventions which apply new technology or use advanced material can even lower capital expenditure while improving climate-resilience.One example is a modular bridge solut

142、ion that encase the deck structure of a bridge in stainless steel.This approach results in a significantly longer design life of up to 100 years with lower maintenance costsa performance well beyond that achieved with the traditional in situ reinforced concrete.Construction costs are also lower beca

143、use a standardised formwork(including reinforcement)can be delivered to a site in a container,with deck casting conducted in a single pour,as opposed to the longer times and complex formwork needed for traditional in situ structures(Hallegate,Rentschler and Rozenberg,20193).All in all,increasing fin

144、ance for climate-resilient infrastructure fits within the broader challenge of filling the infrastructure finance gap(see Box 3).Additional investment will be required every year for infrastructure 19 G20/OECD REPORT ON APPROACHES FOR FINANCING AND INVESTMENT IN CLIMATE-RESILIENT INFRASTRUCTURE OECD

145、 2024 investment:there are widespread needs to replace and retrofit ageing infrastructure,in particular.Developing countries have an urgent need to expand access to infrastructure services,such as clean water and electricity,to support progress towards the Sustainable Development Goals(SDGs).This ca

146、n be particularly challenging in low-income countries that are particularly exposed to climate change.A key driver of infrastructure investment needs is the transition to net zero which will require significant increases and reallocation of investments to decarbonise key infrastructure sectors,inclu

147、ding through large-scale rollout of renewables and electrification of the transport sector.On top of this,developing countries need to expand their infrastructure to assure the provision of essential services-especially for water,sanitation and electricity.The OECD report Investing in Climate,Invest

148、ing in Growth(2017)estimated that USD 6.9 trillion of investment in infrastructure is required annually on average between 2016 and 2030 to meet development and climate needs globally.More recent analysis by IEA has estimated that the transition to clean energy alone will require USD 4.5 trillion of

149、 investment per year by the early 2030s(IEA,202363).Box 4.Mobilising institutional investment for infrastructure Mobilising private investment will be critical for filling the overall infrastructure finance gap,given the scale of financing needs and continuing pressures on public budgets.Institution

150、al investors have been identified as a key finance source for two key reasons:the scale of assets under management(estimated at USD 53 trillion in 2022 for pension assets).(OECD,202364)and the potential for matching long-term infrastructure assets to long-term liabilities.Institutional investors sur

151、veyed by the OECD with approximately USD 9.8 trillion of assets under management in 2022 allocated USD 302.6 billion(representing 3%)to infrastructure investments.(OECD,202465)The following areas have been identified for unlocking this potential:Increased standardisation,where feasible,in terms of c

152、ontractual terms,data,technical specifications,etc Bundling of infrastructure investments to match investor needs Improve the enabling environment for investment in infrastructure,including capacity,strong institutions and having an independent judicial system Governments can develop the market for

153、infrastructure through the development of project pipelines and giving greater predictability of policy Examine the risk allocation and risk sharing between public and private sectors to ensure investable projects.In developing countries,use blended finance instruments to match the risk and return e

154、xpectations of institutional investors.Source:OECD(2020),Green Infrastructure in the Decade for Delivery:Assessing Institutional Investment,Green Finance and Investment,OECD Publishing,Paris,https:/doi.org/10.1787/f51f9256-en.;G20/OECD Report on the Collaboration with Institutional Investors and Ass

155、et Managers on Infrastructure-OECD OECD(2023),Pension Markets in Focus 2023,OECD Publishing,https:/doi.org/10.1787/28970baf-en.OECD(2024),Report on Long term Investing of Large Pension Funds and Public Pension Reserve Funds 2023.There is no recent,comprehensive and global dataset on infrastructure f

156、inance flows and the gap that needs to be filled.A study by the Global Infrastructure Hub estimated that global infrastructure investment was USD 2.3 trillion in 2015(Global Infrastructure Hub,201766).In 2022,G20 governments budgeted USD 978 billion for infrastructure investment,which is around 1%of

157、 GDP.A further USD 424 billion was 20 G20/OECD REPORT ON APPROACHES FOR FINANCING AND INVESTMENT IN CLIMATE-RESILIENT INFRASTRUCTURE OECD 2024 invested by the private sector into infrastructure projects globally,with 71%of tracked private funding going to projects in high-income countries.Another so

158、urce of finance is corporate private investment in infrastructure,such as private utilities financing projects from their own balance sheet.Corporate finance exceeds project finance in some sectors,but there are no data available on overall trends.Based on the data available,it is likely that global

159、 infrastructure investment remains below the levels required,as projects that are bankable are not sufficiently developed in particular in emerging and developing countries.The Climate Policy Initiative examined the extent to which finance flows for infrastructure were consistent with five core prin

160、ciples of climate resilience,such as ensuring that the project design is informed by physical climate risk assessments(CPI,202267).These principles build on(Mullan and Ranger,202268)and are aligned with the approach of this report.This analysis found that USD 31 billion of infrastructure finance wen

161、t towards climate resilient projects in 2019/2020,accounting for a small fraction of overall infrastructure investment.At a city level,similar analysis has found that only 9%of total urban climate finance is going towards climate adaptation,with the remainder going towards mitigation(CCFLA,202169).T

162、hese estimated flows for climate-resilient infrastructure are a fraction of overall needs.Hallegatte,Rentschler and Rozenberg estimate mainstreaming climate resilience increases the costs of power,transport,and water and sanitation infrastructure projects by 3%relative to the overall infrastructure

163、investment needs.Applying this increase to the estimated USD 6.9 trillion required for total infrastructure investment(OECD/The World Bank/UN Environment,201870)would equate to USD 207 billion per year.In addition,financing additional infrastructure towards weather-related disasters,such as flood de

164、fences,and addressing existing infrastructure assets are likely to generate significant costs.For example,upgrades to flood protection in London alone are estimated at USD 20 billion over the course of this century(DEFRA and EnvAgency,202371).21 G20/OECD REPORT ON APPROACHES FOR FINANCING AND INVEST

165、MENT IN CLIMATE-RESILIENT INFRASTRUCTURE OECD 2024 Assessing climate risks is the first step in the process of building climate-resilient infrastructure.As defined by the IPCC,climate risks result from interactions of climate hazards(caused by a climate change-related event or trend),with the vulner

166、ability(the susceptibility to harm)and exposure of assets and people to them(IPCC,201472).Most OECD countries have produced national climate risk assessments,which include the infrastructure sector albeit to different extents(OECD,20181).Climate risk data is often not downscaled enough to inform inf

167、rastructure risk assessment at the asset level.Given the strong spatial dimension of future climate risks and vulnerabilities,it is relevant to adopt a place-based approach to understand local impacts.The OECDs work on providing subnational climate hazard data makes an important contribution to clos

168、e this knowledge gap(see the OECD Laboratory for Geospatial Analysis).Box 5.Integration of climate impacts and disaster risks into policies for the planning Case studies show that the most common way to integrate climate impacts and disaster risks into policies is to include climate resilience objec

169、tives and measures in their multi-year National Adaptation and Development Plans,drawn up in accordance with international climate adaptation targets as well as national objectives and priorities.This is the case for Brazil,Canada,France,Japan,Mexico and Trkiye,which have in place national policies

170、addressing climate change in various sectors to provide strategic direction.Central to these plans is the strategic integration of infrastructure resilience policies which strengthen infrastructure systems against climate-induced stress,such as extreme weather events and sea-level rise.This linkage

171、also ensures that infrastructure development and maintenance consider the evolving climate risks,thereby safeguarding vital assets and services.National adaptation plans are often transversal,as they integrate and coordinate actions across different sectors and levels of the public administration.Ke

172、y challenges in drawing up and operationalising such plans are the coordination of actions across different levels of the government,as illustrated by the case of Switzerland and Mexico,and for resource allocation,as illustrated in the cases of Brazil and Russia.Note:Case studies in this report are

173、provided under the responsibility of each country.Reference:Presidency Annex A,Section I:Integration of climate impacts and disaster risks into policies for the planning Besides understanding current climate risks,it is also important to assess future projected risks.In the context of climate change

174、,the frequency and intensity of climate impacts is expected to change.Although 3 Assessing and understanding climate risks 22 G20/OECD REPORT ON APPROACHES FOR FINANCING AND INVESTMENT IN CLIMATE-RESILIENT INFRASTRUCTURE OECD 2024 projections of future climate hazards are largely available across OE

175、CD countries,their integration in hazard models,which are usually place-specific,remains limited(OECD,202310).When analysing risks to infrastructure assets,it is important to map the interdependencies between infrastructure assets and networks.This goes beyond domestic interconnections,but also incl

176、udes cross-border interdependencies and interconnections as climate change does not recognise boarders.As climate change impacts can cascade through infrastructure systems,understanding how infrastructure networks get affected through interdependencies is crucial for minimising climate change impact

177、s(OECD,20181).To understand these interdependencies and potential shared risks,collaborations between infrastructure operators is essential.Examples of this include the EUs Critical Infrastructure Warning Information Network,which helps exchange information on different kinds of hazards and vulnerab

178、ilities,as well as strategies and measures that can reduce risks to critical infrastructure(OECD,20181)(European Commission,n.d.73).Stress testing can also provide a tool to identify how infrastructure will operate under future climate scenarios as a conceptual framework assessing where systems may

179、fail due to severe or plausible disruptive events(both episodic or prolonged),assessing the ability of systems both to withstand,as well as to overcome these disruptions(Linkov et al.,202274)(OECD,20181).Applied to understand interconnectedness in systems,it can be used to understand cascading impac

180、ts triggered by climate change in infrastructure networks and beyond(Linkov et al.,202274).Box 6.Integration of climate impacts and disaster risks into policies for the planning Plans and policies in countries focus on water management,such as is the case of the Brazilian Sowing Water and Water Secu

181、rity programmes,that are aimed at factoring in the effects of climate change on water availability and quality.By linking water management policies to resilient infrastructure,countries can create adaptive and robust systems that safeguard communities,ecosystems and economies from the increasingly u

182、npredictable effects of a changing climate.Note:Case studies in this report are provided under the responsibility of each country.Reference:Presidency Annex A,Section I.Integration of climate impacts and disaster risks into policies for the planning Once climate risks are mapped and assessed,it is c

183、rucial to ensure their consideration into planning and decision-making process across the whole lifecycle of infrastructure.Several tools emerged to facilitate the mainstreaming of climate resilience across various stages of the life cycle of infrastructure.Prior to defining individual projects,gove

184、rnments at all levels can prepare and develop climate-resilient national,regional or urban development plans,and accompanying spatial plans and master plans to strategically define what can be built,and where it can be built.This ensures that climate risks are considered as part of the overall built

185、 environment,allowing for interactions with other infrastructure and non-infrastructure assets to be understood(OECD,202375;OECD,202343).Coordination across levels of government is essential for spatial planning as subnational governments have the key competencies in this area(OECD,201776)(OECD,2014

186、77).At the project appraisal phase,for example,an Environmental Impact Assessment(EIA)can be conducted,which among other environmental impacts assesses whether a project exacerbates climate change impacts elsewhere,as well as their vulnerability to climate change.In the European Union,directive 2011

187、/92/EU introduced mandatory EIAs to be conducted for certain large-scale projects,which was amended with 2014/52/EU,strengthening the focus on climate change adaptation and resilience in the screening,scoping and assessment phases of projects(Vallejo and Mullan,201745)(European Committee of the Regi

188、ons,n.d.78).23 G20/OECD REPORT ON APPROACHES FOR FINANCING AND INVESTMENT IN CLIMATE-RESILIENT INFRASTRUCTURE OECD 2024 A key challenge in planning and decision making for infrastructure resilience is uncertainty.One source of uncertainty are the inherent challenges of modelling climate change acros

189、s different socio-economic and emissions scenarios.To manage decision-making under uncertainty,adaptive and flexible planning approaches have been developed,which can respond to changing climate impacts over the infrastructures lifetime,enabling adjustments to be made.Scenario planning,for example,a

190、ims to accommodate for a range of potential conditions in the futures,such as real options analysis(OECD,20181).In adaptive planning,multiple actions,including alternative pathways for policy development and investment are developed in the planning phase.Based on pre-defined trigger points,decision-

191、makers can shift to different options,i.e.alternative pathways dependent on how circumstances evolve.The Thames Estuary 2100 project was the first time the adaptive pathways approach was used.Following the construction of the Thames Barrier which currently protects the city of London in the United K

192、ingdom from coastal and tidal flooding,further adaptation measures(e.g.a moveable or permanent tidal barrier to drain the river)will be taken when certain levels of sea level rise are reached(Hall et al.,201951).Box 7.Mainstreaming climate-resilient infrastructure through a national development plan

193、:the case of the Philippines Mainstreaming climate resilience into national development plans can provide an important starting point for including climate resilience into infrastructure development.The Philippine Development Plan(PDP)2023-28 is a foundational document delineating the policies and p

194、rojects aimed at fulfilling the nations objectives over the next six years.The PDP serves as a cornerstone for guiding budget allocations and ensuring alignment with these articulated objectives,thereby accentuating its significance,particularly concerning infrastructure,a significant budgetary comp

195、onent.A full chapter of the PDP is dedicated to the expansion and upgrading of infrastructure,with the aim to embed climate resilience in infrastructure design.The PDP also entails a chapter to further strengthen climate and disaster resilience within the country.Such policy objectives outlined in t

196、he plan particularly those concerning infrastructure set out a management framework for the countrys major infrastructure projects and support local and national stakeholders in prioritising their investments.With the National Economic Development Agency(NEDA)currently working on target indicators t

197、o monitor the implementation of the plan,there is a unique opportunity to ensure the goals presented in the PDP are translated into specific targets.As part of the Sustainable Infrastructure Programme in Asia(SIPA),the OECD works with the Philippines to support the country in improving the quality a

198、nd sustainability of new and existing infrastructure through capacity-building,including on climate resilience.Source:Source:(NEDA,202379)(OECD,forthcoming80)24 G20/OECD REPORT ON APPROACHES FOR FINANCING AND INVESTMENT IN CLIMATE-RESILIENT INFRASTRUCTURE OECD 2024 All levels of government have an e

199、ssential role to deliver climate-resilient infrastructure,but subnational governments have a particularly important role.They have key competencies related to infrastructure spanning from planning and permitting to procurement,construction,operations and maintenance(OECD,202416).In the OECD they acc

200、ount for 69%of climate-significant public investment(Figure 3).Figure 3.Subnational governments are key investors in climate-resilient infrastructure Climate-significant public investment by level of government in OECD and EU countries,2019 Note:Covering 32 EU and OECD countries.WA=weighted average.

201、Source:(OECD,n.d.81),Subnational Government Climate Finance Hub,www.oecd.org/regional/sngclimatefinancehub.htm Local climate resilience actions can be especially challenging to fund.Much climate-resilient infrastructure are“local public goods”that are needed to protect private assets(e.g.,housing,bu

202、sinesses,vehicles,etc.),so local tax revenue from those beneficiaries will have a key role to help fund this infrastructure as will targeted capital grants from upper levels of government,especially for communities most in need(OECD,202416).In addition to public funding,private finance will have an

203、essential role to spread the costs of local climate-resilient infrastructure over time.However,access and use of finance by regional and local governments for supporting long-term investments can vary considerably across and within countries.Subnational governments can sometimes not access affordabl

204、e(or any)finance due to strict fiscal frameworks that can limit their ability to raise revenue and accrue debt(OECD/UCLG,202282).Even where frameworks are more conducive to supporting quality investment,access to finance can still be limited by other factors 4 Role of subnational governments and com

205、munity considerations for climate-resilience of infrastructure 25 G20/OECD REPORT ON APPROACHES FOR FINANCING AND INVESTMENT IN CLIMATE-RESILIENT INFRASTRUCTURE OECD 2024 (e.g.,capital markets,creditworthiness,financing costs,small project size,currency exchange risks)(OECD,202283).Community engagem

206、ent is a critical element for achieving climate-resilient infrastructure systems.When considering community considerations for climate-resilience of infrastructure,three main avenues could be taken into account:Monitoring of social impacts of infrastructure including through community engagement Eng

207、aging with local communities to understand their needs for infrastructure,how these needs will be affected by climate change and the development of approaches to enhance climate resilience.Contractual mechanisms to protect affected communities.Box 8.Initiatives to foster community engagement to faci

208、litate the updating,planning and implementation of climate-resilient infrastructure Practices reported include monitoring of social impact of infrastructure,consultation with local communities affected or potentially affected by the climate risk of infrastructure assets,and contractual mechanisms to

209、 protect affected communities.Community engagement remains a secondary priority for many surveyed countries.However,some examples such as France regarding the involvement of the Rgion Sud as a pilot to develop national projects for ecological planning show that the active participation and leadershi

210、p of regions and communities,plays a crucial role in managing climate impact and designing climate-resilient infrastructure.Countries responded with different examples of consultations with stakeholders,especially at the local level,to identify needs and solutions and foster bottom-up approaches to

211、climate resilience.Regarding climate resilient infrastructure,Brazil has already implemented a Community Risk Plan,while China with support from the World Bank has developed a Low-carbon and Climate-resilient Residential Community model in a subdistrict of Shanghai,and the UK has developed a Local P

212、artnerships Adaptation Toolkit as part of an effort to coordinate locally and at different levels of government.The World Bank-financed Green Energy for Low-carbon City in Shanghai Project in Changning District has successfully attracted financial support from various entities,including the World Ba

213、nk,the Global Environment Facility,commercial banks,and local government.This community-driven initiative,with its focus on energy-saving renovations and emergency power supplies,serves as a model for sustainable transformation.Note:Case studies in this report are provided under the responsibility o

214、f each country.Reference:Presidency Annex A,Section II.Initiatives to foster community engagement to facilitate the updating,planning and implementation of climate-resilient infrastructure By affecting assets and basic services,direct and indirect infrastructure damages have major social impacts.Dam

215、ages to infrastructure assets can also disrupt the movement of people.In 2012,Hurricane Sandy restricted the travel of 5.4 million passengers(Vallejo and Mullan,201745).After Hurricane Katrina in 2005,2.7 million people were left without electricity(Hall et al.,201951).Similarly,the 2021 Typhoon Rai

216、(Odette)in the Philippines left 269 cities and municipalities without electricity,while 348 suffered from network interruptions(OCHA,202132).During the 2009 heatwave in Australia,half a million people were 26 G20/OECD REPORT ON APPROACHES FOR FINANCING AND INVESTMENT IN CLIMATE-RESILIENT INFRASTRUCT

217、URE OECD 2024 left without power in Melbourne as the heat stress caused power outages in the electricity transmission network(McEvoy,Ahmed and Mullett,201284).The recent floods in South Brazil have resulted in large scale service disruption of infrastructure services,with operations suspended at Sal

218、gado Filho International Airport(POA),public transport,including in Porto Alegre,being severely disrupted,flood water cutting off towns across the region,power outages in multiple locations,and 581,000 displaced citizens(CASA MILITAR DEFESA CIVIL RS,202437).Communities can be affected severely as a

219、result of such interruptions.It is estimated that each USD 1 billion invested in flood resilient infrastructure in the United States could create 40 000 jobs(Khan,McComas and Ravi,202085).This creates potential employment opportunities for communities.Nature-based solutions(NbS)offer climate resilie

220、nce building with a wide-range of social and ecosystem co-benefits.Through enhancing human wellbeing and the quality of life in diverse ways,social co-benefits are often drawn out as an important advantage various NbS measures bring.NbS provide protection for people from climate risks and other natu

221、ral hazards.Mangroves,for example,protect around 15 million people every year from flooding(Menndez et al.,202086).In the United States,the USD 60 million“Living Breakwaters”project grows oyster reefs off the coast of Staten Island to provide protection for residents from storm surges and coastal fl

222、ooding in the nearby metropolitan area around New York City(IUCN,202087).Helping to reduce the urban heat island effect,NbS can reduce excess mortality from heat exposure.As green roofs can lower indoor air temperatures by 1.5-3 C,a simulation study found that the installation of green roofs on all

223、buildings with elderly residents would reduce heatwave-related mortality in 2030 by up 63%in the city of Szeged,Hungary and by up to 71%in the municipality of ankaya,Trkiye(Marvuglia,Koppelaar and Rugani,202088).Similarly,trees are estimated to lower temperatures by 7-15C through shade and evapotran

224、spiration,thus mitigating the urban heat island effect(UNEP,202189),while providing health benefits due to cleaner air.Indeed,trees in only ten of the worlds megacities are estimated to provide a health benefit of USD 482 million annually due to reduced air pollution(Endreny et al.,201790).In Barcel

225、ona,Spain,200,000 trees in the city were estimated to have removed 5,000 net tonnes of CO2 and 305 tonnes of polluting compounds in 2008(Ajuntament de Barcelona,201391)(Cohen-Shacham et al.,201692).Moreover,urban green areas are estimated to remove 1.97 to 3.8 g of ozone per m2 every year(Aevermann

226、and Schmude,201593)(Le Coent et al.,202194).Furthermore,as green roofs can lower sound transmission by 10-20 dB,several NbS measures deliver health benefits by lowering noise levels(Liberalesso et al.,202095).Despite the potential of NbS to facilitate climate resilience building in the infrastructur

227、e sector,their use remains scattered and mainly applied at pilot scales.As a recent study by the European Environment Agency warned,despite the continued promotion of NbS in several policy frameworks,such as the EU Green Infrastructure Strategy or EU Biodiversity Strategy(EEA,202196),the application

228、 of NbS in the EU remains limited and mostly constrained to small-scale projects(EEA,202397).Indeed,out of nearly 1400 NbS projects in the EU and the United Kingdom,nearly three quarters of them covered less than 1 km2(EIB,202398).While this may be the appropriate scale for certain NbS(e.g.green roo

229、fs,green facades,etc.),this demonstrates that current NbS projects are mostly implemented on small spatial scales and needs to become more inclusive.27 G20/OECD REPORT ON APPROACHES FOR FINANCING AND INVESTMENT IN CLIMATE-RESILIENT INFRASTRUCTURE OECD 2024 For an infrastructure project to be financi

230、ally viable,the projected revenues need to be sufficient to cover operating costs(OPEX)and provide a return on the investment for the capital expenditure(CAPEX)commensurate with the level of risk.The attractiveness of an investment is therefore enhanced by shorter lead times before operation,lower C

231、APEX,lower OPEX,lower risk and/or higher projected revenues.This consideration applies to publicly funded infrastructure too,although public projects are usually assessed based on their expected social costs and benefits over the lifetime of the asset,even if the benefits do not directly accrue to t

232、he government.For example,public investment in flood defences is partly justified based on the expected reductions in flood damage over time,even where those benefits accrue predominantly to property owners.As with privately financed infrastructure,increases in the expected social benefits and/or re

233、ductions in upfront costs will improve the likelihood that a project will be viable.The stylised diagram(Figure 4)below shows how these factors can affect the cash flow of infrastructure assets by strengthening climate resilience over the lifecycle of an asset.The initial preparatory work to underst

234、and vulnerability to climate risks and develop adaptation options can increase upfront costs and,potentially,increase the timeline for the project.Longer timelines decrease the expected return from the project.However,these upfront costs should be more than offset by the positive impact on future ca

235、sh flows.Revenues will be more predictable as there is less likelihood of unanticipated disruption and lower economic losses.Revenues may also be higher if the perception of increased reliability and lower risks lead to increased demand relative to alternatives.Climate-resilient infrastructure shoul

236、d also be at less risk of damage or premature obsolescence due to future climate change impacts.In principle,this reduction in risk should result in lower financing costs and/or lower insurance premiums towards damages over the life cycle of the infrastructure asset.5 Mainstreaming climate resilienc

237、e into infrastructure finance 28 G20/OECD REPORT ON APPROACHES FOR FINANCING AND INVESTMENT IN CLIMATE-RESILIENT INFRASTRUCTURE OECD 2024 Figure 4.Stylised impact of climate resilience on project cashflow Source:(Chavarot et al,202399)However,as demonstrated by(OECD,20181)(CPI,202267),consideration

238、of climate resilience remains the exception rather than standard practice.A key underlying challenge is that physical4 risks are not consistently considered by decisionmakers in the public and private sectors.As such,there is no incentive to make the upfront investments when the benefits of those in

239、vestments are not perceived as relevant.This can be due to a lack of capacity and awareness to understand and manage climate risks,or it can be that the benefits of increased resilience do not translate into cashflow due to weaknesses in the enabling environment and insufficient data on the business

240、 case for investing into climate-resilience.For example,these weaknesses can include insufficient regulation,inappropriate design codes and moral hazard arising from the expectation of government bail outs if a climate-related disaster occurs.International examples of good practices demonstrate how

241、the enabling environment can be strengthened to help make climate resilience the norm,by targeting the barriers that prevent the economic benefits of climate resilience being reflected in investment decisions and having incentives that would support greater investment.The following four areas will b

242、e critical for driving increased finance flows for climate-resilient infrastructure:transparency and awareness,mainstreaming climate resilience into public funding,examining regulation of privately-owned infrastructure and examining risk financing arrangements.Increasing transparency and awareness o

243、f climate-related risks in investment decisions Increased transparency on climate-related risks will help investment decisions integrate physical climate risks and potential future costs,and hence provide a market signal to better manage the relevant risks.Material climate-related risks may not yet

244、be considered by investors due to the perceived complexity of those risks and the lack of comparable data and metrics.The following tools and mechanisms can help to address these challenges.29 G20/OECD REPORT ON APPROACHES FOR FINANCING AND INVESTMENT IN CLIMATE-RESILIENT INFRASTRUCTURE OECD 2024 Di

245、sclosure Requirements on infrastructure operators to disclose climate-related risks have been used to raise awareness within organisations,while also facilitating efforts to understand interdependencies between infrastructure networks.In the UK,the Climate Change Act includes the Adaptation Reportin

246、g Power,by which the government can require utility companies to undertake a risk assessment and publish how they intend to manage those risks.An evaluation of the most recent round of reports found that the quality of these reports was generally high and that there was evidence that it was leading

247、to increased preparedness in the infrastructure sector(CCC,2022100).Broader efforts within the financial sector to disclose climate-related risks should also provide an impetus to make physical climate risk visible.Analysis by(EDHECInfra,2023101)found that physical climate risks could reduce the net

248、 asset value of infrastructure portfolios by an average of 4%and 27%in a worst-case scenario.5 The Task Force on Climate-related Financial Disclosure(TCFD)recommendations provided a voluntary basis for reporting(TCFD,2017102)6.These have informed the development of the International Financial Report

249、ing Standards(IFRS)Sustainability Disclosure Standards,which are intended to be integrated into regulatory frameworks across jurisdictions.These focus on financially material information,so would cover infrastructure-related risks insofar as they are expected to be financially material.The European

250、Unions European Sustainability Reporting Standards have a broader perspective,as they also cover the impact on the environment(“double materiality”)and a broader set of environmental,social and governance factors.Most listed companies carry out sustainability reporting.This is not standardised in mo

251、st cases but includes elements of climate resilience.In many cases,it reflects TCFD recommendations.Climate resilience can be informed through governance,strategy and risk management of the TCFD recommendations.Critically,it requests organisations to disclose their processes for identifying,assessin

252、g and managing climate risk(TCFD,2021103).Such sustainability reporting provides important disclosure of an organisations level of engagement and management of climate risk.Applying such reporting to infrastructure assets would support improved reporting on climate resilience.Further action would he

253、lp to translate these disclosure requirements into greater visibility of physical climate risk.An analysis of reporting done based on the TCFD recommendations found that less than half of them covered physical climate risks.Furthermore,the treatment of risks was partial,with reports only tending to

254、cover a subset of potential climate hazards.Disclosures were not readily comparable between institutions due to different metrics and assumptions(Zhou and Smith,2022104).Addressing these gaps will require the development of common metrics and assumptions,building on the work that has already been un

255、dertaken(EBRD and GCECA,2018105).It will also require efforts to provide underlying data and information on climate-related hazards,such as regularly updated hazard maps.30 G20/OECD REPORT ON APPROACHES FOR FINANCING AND INVESTMENT IN CLIMATE-RESILIENT INFRASTRUCTURE OECD 2024 Box 9.Practices to sca

256、le up financing for climate-resilient infrastructure by promoting and incentivising private sector participation and reducing barriers to private investment Several survey participants are also increasingly advancing towards regulatory reform that fosters sustainable activities classification,risk i

257、dentification and mitigation,and mobilisation of capital.Importantly,in several countries these efforts are already translating into the development of national sustainability taxonomies,such as the Sustainable Taxonomy of Mexico,the Russian Taxonomy of Green and Adaptation Projects.Similarly,the UK

258、s is developing a Roadmap towards mandatory climate-related disclosure,and Trkiyes has already issued its own Sustainability Reporting Standard,and has started preparations for a National Green Taxonomy.Indonesia has made important progress in integrating ESG measurements across the infrastructure l

259、ife-cycle.Note:Case studies in this report are provided under the responsibility of each report.Reference:Presidency Annex A,Section V.Practices to scale up financing for climate-resilient infrastructure by promoting and incentivising private sector participation and reducing barriers to private inv

260、estment.Standards,labels and taxonomies Robust analysis of the exposure of infrastructure assets to physical climate risks is a crucial element for mainstreaming climate resilience into infrastructure finance.A growing ecosystem of private data providers has emerged to help make risk visible in inve

261、stment decisions.However,recent analysis has found that results from different providers are inconsistent,even when using the same analytical approach(Hain,Klbel and Leippold,2022106).Efforts to facilitate the sharing of data and best practice methodologies would facilitate better understanding and

262、consistency in the analysis of climate risk over time.The Physical Climate Risk Assessment Methodology(PCRAM)provides a common approach for analysing the impact of physical climate risks on infrastructure investments(Mott MacDonald,n.d.107).This approach is also intended to provide a common language

263、 for discussing physical climate risks between the infrastructure and financial sectors.PCRAM translates physical climate risks and adaptation measures into key performance indicators,such as(financial)internal rate of return and life cycle costs,across possible future scenarios.The Institutional In

264、vestors Group on Climate Change is further developing PCRAM.Infrastructure standards and labels also have a critical role in making the resilient dividend visible.Standards that integrate climate resilience provide a signal that climate risks have been identified and managed.In so doing,they provide

265、 a means for operationalising resilience requirements within contracting processes.However,further efforts are required to mainstream climate resilience across standards covering the infrastructure life cycle(Canado and Mullan,2020108).Moreover,resilience is considered in sustainability standards th

266、at regulate the issuance and subscription of various capital market instruments from which infrastructure projects receive financing(Box 11).31 G20/OECD REPORT ON APPROACHES FOR FINANCING AND INVESTMENT IN CLIMATE-RESILIENT INFRASTRUCTURE OECD 2024 Box 10.Examples of global initiatives relevant to c

267、limate-resilient infrastructure Resilience is being integrated into the following initiatives to improve the quality of infrastructure investments:Belt and Road Initiative Blue Dot Network “Clever”Green building certification system Coalition for Disaster Resilient Infrastructure Debt Management and

268、 Financial Analysis System.FAST-Infra Impact and Responsible Investing for Infrastructure Sustainability(IRIIS)PIDA Quality Label of the African Union PPP Fiscal Risk Assessment Model(PFRAM)Private Infrastructure Development Group(PIDG)SOURCE UNEP Sustainable Infrastructure Partnership Note:Initiati

269、ves cited in this box are indicative and are not endorsed by the G20.Green finance taxonomies provide a positive signal for investment in climate-resilient infrastructure.The EU Taxonomy for Sustainable Activities provides criteria by which investments,including infrastructure,can be identified as c

270、ontributing significantly to climate change adaptation.The base requirement is to identify and address climate risks,while also encouraging use of Nature-based Solutions(NbS)or green-blue infrastructure.32 G20/OECD REPORT ON APPROACHES FOR FINANCING AND INVESTMENT IN CLIMATE-RESILIENT INFRASTRUCTURE

271、 OECD 2024 Box 11.Improving climate resilience of infrastructure through GSS bonds standards and guidelines Standards and taxonomies that bring forward climate resilience in infrastructure finance can be further mainstreamed through their application in sustainable bonds issuance.There are a growing

272、 number of guidelines that are used by debt markets to regulate the issuance and the subscription of bonds that achieve green and social objectives,including climate adaptation and resilience.For instance,green,social and sustainability(GSS)use-of-proceeds bonds are popular debt instruments that all

273、ow investors to contribute to the green transition,as well as social causes,by using bonds proceeds to finance eligible projects.The sustainable debt market has grown substantially in the last 15 years,reaching in 2023 H1 a total of USD 4.2 trillion of issuance to date,with green bonds accounting fo

274、r the majority of issuances.In the framework of these bonds,issuers employ issuance standards and guidelines to ensure sound green and/or social credentials of financed projects,attributing them to detailed eligible sector categories,often leveraging relevant taxonomies.In general,GSS bond principle

275、s promote a contextual and flexible approach for identifying green and social activities that can contribute to sustainability goals of issuers and investors.Private sector issuance standards include the International Capital Market Association(ICMA)Sustainable Finance Principles and Guidelines for

276、green and social bonds,and the Climate Bonds Initiative(CBI)Climate Bonds Standard and Certification for green bonds.Such voluntary guidance is aimed at defining the nature,scope and characteristics of GSS instruments,and setting a framework for the identification,financing,monitoring and impact rep

277、orting of eligible projects towards which the proceeds of GSS bonds are directed.Adaptation and resilience related activities are classified in both ICMA and CBI green bond standards by dedicated eligible project categories,even though underlying definitions are not as standardised.Establishing stan

278、dardised guiding principles and taxonomies in climate resilience and adaptation funding is crucial,as they provide clarity for defining eligible projects and ensure comparability for investors.Moreover,standards need to be linked to finance to enable effective allocation of funds to projects with ma

279、ximum resilience and adaptation benefits,facilitating transparent tracking of progress and fostering collaboration among stakeholders.Sustainable infrastructure as an asset class can be at the core of various projects that receive funding through GSS bonds issuance,because,by nature,it covers multip

280、le eligible project categories in terms of applicability of labels.This is true especially in climate adaptation and resilience project categories,since the characteristics of sustainable infrastructure projects match with adaptation and resilience definitions employed by private sector standards fo

281、r use-of-proceeds bonds.In general,using climate resilience related standards and taxonomies in financial markets applications might benefit both the financing mechanisms in questions,since they entail a strong sustainability aspect,and the standards themselves,as a financing application might incre

282、ase their development,focus and applicability.Source:(Climate Bonds Initiative,2023109).33 G20/OECD REPORT ON APPROACHES FOR FINANCING AND INVESTMENT IN CLIMATE-RESILIENT INFRASTRUCTURE OECD 2024 The application of mandatory climate risk screening tools provides a further tool for identifying and ma

283、naging climate-related risks.A critical tool for governments is the application of climate risk screening within Strategic Environmental Assessment and Environmental Impact Assessment(EIA)processes.EIAs are often mandatory for key infrastructure sectors(e.g.,EUs Environmental Impact Assessment Direc

284、tive(2011/92/EU amended by 2014/52/EU is required for nuclear power plants,long-distance railways,motorways,express roads,waste disposal and dams),however,inclusion of climate risk is not always a given(Mayembe et al.,2023110).Thus,better integration of climate risk within EIAs would contribute to c

285、limate resilience becoming a more default consideration for infrastructure projects.Box 12.How EIAs can impact the design of climate-resilient infrastructure In the Philippines,the National Economic and Development Authority(NEDA)mandates all infrastructure projects to undergo an EIA,and that EIA mu

286、st incorporate climate resilience,as required by the Ministry of Environment.While the criteria for climate resilience itself is not yet robust,the main concern for NEDA is to be able to assess whether or not the project is climate resilient.The project evaluation is based on the alignment of the pr

287、oject with the national and regional development priorities as well as the strategic priorities of line ministries.The appraisal criteria include environmental and social impacts.The Environmental Management Bureau of the Department of Environment and Natural Resources(DENR)is responsible for conduc

288、ting a review of the EIA,the environmental risk analysis,and the proposed risk reduction measures.This review covers the integration of climate change adaptation measures and disaster risk reduction.The DENR then issues an Environmental Clearance Certificate,which is required to start construction w

289、orks.In South Africa,the Port of Durbans EIA included a climate risk assessment,leading the Port to adapt the original design to protect it from sea level risk and an environmental management plan to address heavier rainfall and wind.Source:OECD sources Integrating climate resilience into public fun

290、ding Public funding arrangements for infrastructure may need to be revised to ensure they are conducive to the mainstreaming of climate resilience into infrastructure finance.Critical areas for achieving this include budget allocations,project appraisals and procurement.Climate change will affect bu

291、dgetary needs for infrastructure.The role of the budget process in supporting climate resilience is not systematically considered.Moreover,there is a lack of data on how well budgetary processes and outcomes align to climate resilience(Mullan and Ranger,202268).Consequently,infrastructure may be pro

292、vided at the lowest upfront cost rather than maximising net benefits over the lifetime of the asset.There can also be distortions if different institutions share funding responsibilities.For example,the European Structural and Investment Funds cover capital costs,but regional and local authorities c

293、over operations.Green budgeting approaches are not yet widespread.A countrys national adaptation plan is a key avenue in which to ensure that climate change adaptation is a key priority,and adaptation measures are mainstreamed through budget allocation for their 34 G20/OECD REPORT ON APPROACHES FOR

294、FINANCING AND INVESTMENT IN CLIMATE-RESILIENT INFRASTRUCTURE OECD 2024 implementation.By identifying infrastructure sectors that can contribute to adaptation,this can create a clearer link with climate resilience.Public sector approaches for project appraisal and procurement should consider the perf

295、ormance of projects over their entire life cycle,including the effects of climate change.For example,the United Kingdom has developed supplementary guidance for integrating climate change adaptation into policy appraisal decisions,including methods for accounting for uncertainty(HM Treasury,2023111)

296、.A growing number of countries,including EU member states,Japan and the United States,have adopted life cycle costing within their procurement frameworks.Procurement processes can also facilitate innovation by specifying performance standards rather than requiring use of specific technologies or app

297、roaches.Public-private partnerships(PPPs)are long-term contracts in which the private sector delivers and funds public infrastructure,sharing the associated risks(OECD,n.d.112).The success of PPPs in delivering climate-resilient infrastructure depends crucially on how climate-related risks are alloc

298、ated within the contract.Failures to adequately define risks in advance,misallocation of risks and differences between the de facto and de jure allocation of risk have all been found to undermine resilience(OECD,20181).Efforts to build capacity for climate-resilient PPPs are under way.For example,th

299、e Global Centre on Adaptation developed a training course and certification on this theme for infrastructure practitioners(GCA,n.d.113).The World Banks PPP Legal Resource Centre provides an inventory of resources for designing and implementing climate-resilient PPPs.In any of these efforts,an open a

300、nd competitive procurement of projects and anti-corruption measures will be essential to ensure a robust foundation for infrastructure development.Box 13 Policies to promote a comprehensive risk assessment that allow for the estimation of exposures and the identification of financial vulnerabilities

301、 The assessment method of climate risks related to projects are developed internally,such as in the cases of Brazil,Saudi Arabia and the UK.Canada applies ISO 14091 norm climate assessment criteria,and Italy applies European Central Banks Guide on climate-related and environmental risks.In the infra

302、structure sector,requiring thorough climate risk evaluations during infrastructure project planning,design,and implementation ensures resilience against climate change impacts.Integrating assessments helps identify vulnerabilities,anticipate hazards,and incorporate adaptation measures,while adherenc

303、e to established standards ensures consistency.This fosters resilient infrastructure,safeguarding communities,economies,and ecosystems against uncertainties posed by a changing climate.Another practice is the issuance of catastrophe bonds,such as those issued by Mexico,which represent an innovative

304、way to manage natural disaster risk by transferring some of the risk to financial markets and therefore reducing the governments fiscal burden in the event of a catastrophic event but also pricing risk as well(see section Examining risk financing and risk sharing arrangements to ensure incentive for

305、 risk management and enable rapid recovery,on catastrophe bonds).Note:Case studies in this report are provided under the responsibility of each country.Source:Presidency Annex A,Section III.Policies to promote a comprehensive risk assessment that allow for the estimation of exposures and the identif

306、ication of financial vulnerabilities.35 G20/OECD REPORT ON APPROACHES FOR FINANCING AND INVESTMENT IN CLIMATE-RESILIENT INFRASTRUCTURE OECD 2024 Economic regulation of privately-owned infrastructure Many OECD countries have natural infrastructure monopolies such as water supply and sanitation networ

307、ks,or electricity distribution that are owned,provided and managed by private utility companies.Given their monopoly position,these private utilities are subject to economic regulation of service standards and price levels.This is becoming increasingly common since the wave of privatisations in the

308、1980s and 1990s.Regulated utilities incentive and ability to invest in climate-resilient infrastructure will depend upon the regulatory regime that they are subject to.Various regulatory models are used but the overall aim is typically to achieve a balance of service quality and price,while allowing

309、 investors to earn a reasonable return.For example,in the US,state Public Utility Commissions(PUCs)determine prices,allowable investments and service standards for privately-owned utilities providing electricity,gas,telecoms and water(Monast,2021114).The following elements of the regulatory framewor

310、k could be examined to support investment by regulated utilities in climate-resilient infrastructure:Allowable investments:ensuring that the rules determining whether investments are reasonable account for the value of increased climate resilience Performance standards:examine the rules that are in

311、place to determine whether they are suitable for a changing climate,both in terms of risks to infrastructure provision(e.g.loss of service)and also risks from infrastructure provision(e.g.failures of dams or wildfires from electricity distribution networks)Additional requirements:regulators can also

312、 support efforts to make physical climate risks visible through requirements to undertake stress tests,identify interdependencies and develop adaptation plans.As with other aspects of regulatory policy,there is a need to balance competing objectives such as between affordability and reliability.The

313、risk-based approach provides a basis for making trade-offs and communicating clear expectations,objectives and targets to guide investment decisions.Examining risk financing and risk sharing arrangements to ensure incentive for risk management and enable rapid recovery The allocation of climate-rela

314、ted risks,both contractually and in practice,provides a critical driver for investments in climate resilience.These risks include damage to infrastructure assets from climate extremes,loss of service(e.g.power cuts)and premature obsolescence of assets that were not designed to account for climate ch

315、ange.Unclear or misallocated risks can generate moral hazard and thereby reduce the incentive to invest in adaptation and exacerbate the cost of climate extremes by delaying reconstruction.These can represent contingent liabilities for governments,even if the infrastructure is privately owned.The OE

316、CD Recommendation on Building Financial Resilience to Disaster Risks outlines best practices for managing the financial consequences of extreme events.The insurance sector has significant expertise in risk assessment and risk management that can be transferred through the process of acquiring insura

317、nce.The purchase of insurance coverage will normally involve both an assessment of climate(and other)risks to the asset as well as the provision of advice on how infrastructure operators can mitigate that risk through investments in adaptation and risk reduction,36 G20/OECD REPORT ON APPROACHES FOR

318、FINANCING AND INVESTMENT IN CLIMATE-RESILIENT INFRASTRUCTURE OECD 2024 which also results in the pricing of the risk.This can contribute to risk being address through prevention measures.Box 14.Managing costs to ensure sufficient funding for the repair and restoration of climate-related damages and

319、losses to public infrastructure Countries have been developing a number of approaches to address damages.First,the establishment of special funds at national and regional levels to finance climate damages,including dedicated or general-purpose reserves or contingency funds,contingent credit,and insu

320、rance or other forms of risk transfer.Examples such as the EU Solidarity Fund,the Chiapas State(Mexico)Trust Fund for Integral Disaster Risk Management,the special provisions for climate damage recovery in Russian Emergency Response Funds,or the UK Flood and Coastal Innovation Fund show that address

321、ing climate risk and infrastructure losses through dedicated funds is a versatile solution that can address local,national,and regional needs depending on the country or regions exposure and vulnerability to climate risk.Second,countries are creating and implementing empowering solutions for local g

322、overnments and stakeholders,like the St.Petersburg new flood protection measures(DAM),Trkiyes Climate and Disaster Resilient Cities Project(funded by the World Bank),or the UK governments investment in flood and coastal erosion schemes through the Frequently Flooded Allowance.Note:Case studies in th

323、is report are provided under the responsibility of each country.Reference:Presidency Annex A,Section IV.Managing costs to ensure sufficient funding for the repair and restoration of climate-related damages and losses to public infrastructure The appropriate model for allocating risks between parties

324、 will be context specific.The OECDs Principles for Private Sector Participation in Infrastructure reiterates the general principle that risks should be allocated to the party best able to assess and manage those risks.In the context of climate resilience,this implies that relevant risks should be id

325、entified and clearly allocated through contractual and legal provisions.The legal allocation of risk should align with the ability of different parties to bear the risks.This includes PPPs which allocate risks between the public and private sector(see Integrating climate resilience into public fundi

326、ng).Governments(national or subnational)can acquire indemnity-based property insurance coverage from private insurance markets to protect against damages to individual public buildings and publicly-owned infrastructure assets(and other public assets)(OECD,2022115).Insurance coverage for individual b

327、uildings or infrastructure assets is usually available from domestic insurance companies or foreign insurers(if permitted under the insurance regulatory regime).In some cases,ministries responsible for managing public assets are required or encouraged to purchase adequate insurance coverage from pri

328、vate markets(e.g.,Colombia,Viet Nam).In a few countries,a public insurance arrangement has been established to provide insurance coverage for publicly-owned assets,including infrastructure assets.In Australia,Comcover insures the public assets of the federal government and collects premiums from the

329、 ministries responsible for those assets.A number of state governments in Australia have established similar arrangements.In the Philippines,a public insurer(Government Service Insurance Service(GSIS)provides insurance coverage for all public properties owned by both national and local levels of gov

330、ernment.All government agencies and government-controlled operations are required to acquire insurance for their assets from GSIS.GSIS transfers some of the risks that it has assumed to international reinsurance markets.In Iceland and France,programmes established to support the availability of insu

331、rance for natural hazard(and other disaster)37 G20/OECD REPORT ON APPROACHES FOR FINANCING AND INVESTMENT IN CLIMATE-RESILIENT INFRASTRUCTURE OECD 2024 risks provide coverage for publicly-owned assets(including infrastructure assets)as well(in Iceland,the acquisition of this coverage by public asset

332、 owners is mandatory).Many governments(implicitly)self-insure these risks.To that end,they do not make any ex ante arrangements to manage the financial impacts of climate-related catastrophes on public assets(i.e.any damage or losses are funded using budgetary tools or ex post debt financing).The tr

333、ansfer of public infrastructure risks to private insurance or reinsurance markets will be most beneficial for countries that face constraints in fiscal capacity or access to debt markets as post-disaster reconstruction of public infrastructure can entail significant costs that,if uninsured,would have to be borne by the public sector.Public insurance arrangements that pool public asset risks could