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Global Infrastructure Faces Staggering Annual Losses of $300 Billion Due to Worsening Climate Impacts

The Coalition for Disaster Resilient Infrastructure (CDRI) has released a biennial report highlighting the alarming annual losses in global infrastructure due to the worsening impacts of climate change and disasters. This report underscores the critical challenges faced by low-and-middle-income countries (LMICs) in maintaining resilient infrastructure systems.

I. Magnitude of Annual Losses:

  • The global annual average loss (AAL) in principal infrastructure sectors due to disasters and climate change stands between USD 301 and USD 330 billion.
  • When including health and education infrastructure, along with building stock, this range increases significantly to USD 732 to USD 845 billion.
  • Approximately half of this contingent liability is held by LMICs.

II. Multi-Dimensional Challenges for LMICs:

  • LMICs face a complex set of challenges, including a substantial infrastructure deficit that hinders social and economic development.
  • Poor-quality infrastructure due to deficiencies in infrastructure governance.
  • Asset loss and damage due to disasters, resulting in service disruption.
  • Legacy infrastructure ill-suited to address the challenges posed by climate change and technological advancements.

III. Climate Change Amplifies Risks:

  • Extreme climate hazards exacerbate disaster risks, asset loss, and service disruptions.
  • Existing infrastructure may become dysfunctional.
  • Despite increasing efforts in climate change mitigation, the AAL in infrastructure remains high.

IV. CDRI’s Role:

  • The CDRI, launched by Prime Minister Narendra Modi in 2019, is an international partnership aimed at enhancing infrastructure resilience to disasters and climate change.

V. Hazard Distribution:

  • Geological hazards account for 30% of the total global AAL, while climatic hazards make up 70%.
  • Climate change can significantly raise the AAL, impacting high, middle, and low-income countries differently.

VI. Vulnerable Regions:

  • Countries with large infrastructure deficits, weak governance, low fiscal capacity, and limited private investment will be most affected by climate change.
  • Many of these high-risk countries are located in Sub-Saharan Africa and the Middle East.

VII. Impact on Hydropower Generation:

  • Climate change can modify the AAL of hydropower generation, with varying effects on different countries.
  • Some may experience significant increases, while others may see reductions in AAL.

VIII. Disparities in Capital Stock:

  • High-income countries have a significantly higher per capita value of capital stock compared to LMICs and low-income countries.
  • Investments in high-income countries outpace those in LMICs, with the majority going to middle-income countries.

IX. Absolute vs. Relative Risk:

  • Some countries, such as the Philippines, Bangladesh, and Vietnam, face both high absolute and relative risks, challenging their infrastructure resilience.
  • Small Island Developing States (SIDS) have low absolute risk but high relative risk due to their limited capacity to absorb and recover from infrastructure losses.

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