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Can our infrastructure weather the storm of climate change?

by Tim Clark
Bouygues to deploy ALICE on global infrastructure pipeline

Extreme weather events are already becoming a fact of life, but even as we strive to reduce carbon emissions, are we sure the infrastructure holding our civilisation together won’t buckle under the strain? Tim Clark reports

In a world that is increasingly looking to tackle the day to day impacts of climate change, just how prepared the various nations around the globe are for the effects of extreme weather is a key unknown.

And, with extreme weather now becoming arguably a more common occurrence, the relative impacts of damage to infrastructure and beyond are more pertinent.

A number of research pieces and news stories published recently have, however, shed light on both the risks and opportunities that seem to present themselves for the sector.

Risk assessment

First, the risks. Last month a major report on privately-held infrastructure, and the havoc that extreme weather could play on its value, was published by the Infrastructure & Private Assets Research Institute (known as EDHEC).

The report was published to coincide with the COP28 summit in Dubai, and helped outline some of the risks posed, not just to infrastructure itself, but to those who invest in it.

Given the ominous title, Highway to Hell: Climate risks will cost hundreds of billions to investors in infrastructure before 2050, the paper didn’t pull its punches when it came to highlighting just what risks investors – and governments – face when it comes to publicly-owned infrastructure.

Those include short-term events such as hurricanes, tornadoes or flooding – as well as long-term risks such as extreme heat waves and irreversible sea level rises.

It stated that of $1.8trillion in assets it analysed, up to $600bn of value was at risk of being wiped out due to damage or degradation due to climate change impacts.

The report stated: “Our analysis reveals the importance of transition risk for the infrastructure sectors. A disorderly scenario could result in a substantial loss of value to infrastructure investments of nearly USD600 billion.

“That sum is equivalent to approximately 30% of the total invested value in infraMetric’s 9,000 infrastructure assets. Moreover, the negative effects of transition risk will be felt across all sectors, including low-carbon ones such as Renewables and Social Infrastructure.”

The vast sum of $1.8trillion may sound huge, but the projects tracked by infraMetric are a drop in the ocean compared to the total value of infrastructure assets world wide. A report from PricewaterhouseCoopers earlier last year found that in Asia alone, countries needed to invest $1.7trillion per year for the rest of the decade to ensure economic growth.

More pertinent than the headline figure is the proportion of value that could be lost – 30% of the sums invested, according to the EDHEC report – which if repeated for all infrastructure projects would add up to an astronomical figure.

“In a world that is working towards net-zero carbon, infrastructure poses some highly significant challenges,” says David Porter, vice president at the Institution of Civil Engineers.

“More extreme weather will require a greater focus on adaptation and resilience, and civil engineers can help with this. At the same time, engineers must deliver business cases that are acceptable to clients.”

Economics of the ‘hot house’

The EDHEC report compares the risks to assets by comparing different government policy options, from what it calls the “hot house” scenario, whereby greenhouse gas emissions from fossil fuels are allowed to continue unabated, with a scenario where emissions are curbed and any rise in global temperatures is managed, and importantly limited.

David Porter

In the worst-case scenario, energy and water infrastructure are considered to be most at risk, with the value of assets dropping by an estimated 38% in a disorderly scenario. This is followed by other utilities at 33%, data infrastructure at 32%, transport at 30%, environmental services at 30%. Solar power and other renewables see a lower drop in value, at 24% and 19% respectively.

The paper calls for coordinated action, stating: “We recommend that investors demand coordinated actions and that governments immediately implement carbon taxes to minimise the adverse financial effects of transition risk.

“The worst impact comes from failing to react until too late.”

Can infrastructure decarbonise?

The issues outlined by the EDHEC report are not unknown to the government.

Over a decade ago The Royal Academy of Engineering published a comprehensive report titled Engineering the Future that outlined the risks and measures that needed to be taken to ensure infrastructure can be adapted to future climate risks.

In it the former president of the Academy, Lord Browne of Madingley warned that a holistic approach to the development and protection of infrastructure was essential, noting that “an awareness of where failure in one sector can lead to a cascade of failures elsewhere. Engineers must use systems thinking to manage infrastructure in the light of new climate threats and to deal with systemic risks”.

Eleven years later, those same risks were outlined again by the UK’s Joint Committee on the National Security Strategy, which warned that the UK was vulnerable to the extreme weather impacts, and also sea level rises.

The report said: “Major power outages, landslides on to roads, buckling train lines and flooding of infrastructure sites: These are all realistic scenarios, and can lead to ‘cascading’ risks affecting other CNI [critical national infrastructure] sectors.

“Different infrastructure sectors are highly interdependent, so the shutdown of one CNI operator may cause knock-on effects on multiple other sectors.”

Stephen Nip

Infrastructure itself contributes to the climate change issue due to the amount of carbon-intensive materials used to construct the various bridges, tunnels, railways and bridges globally.

The International Panel on Climate Change (IPCC) noted how carbon emissions could be lowered by between 40% and 70% if it was possible to change demand – including that from new infrastructure projects.

When it comes to taking a ‘whole industry’ approach to minimising carbon use, attitudes are slow to change; however there are some positive, if minimal steps in the right direction.

“Cross-industry collaborations will be imperative in finding innovative ways to move forward with new infrastructure developments in a more climate-friendly way,” says Stephen Nip, bridge engineer at Buro Happold.

“While infrastructure is a major contributor to carbon emissions, there are principles that can be applied to reduce a structure’s impact on climate change.

“For instance, a bridge engineer can optimise the design elements to significantly reduce the embodied carbon, and therefore minimise the risks posed by climate change to the construction of new bridges.”

Bridge to the future

The Institution of Civil Engineers (ICE) has also focussed on the issue. In a report published last year it stated that one key area for senior management is awareness, and skills to deal with the issue.

“The civil and infrastructure engineering industry has many highly competent people working in it, but few people in senior roles will have had any formal education on climate and carbon issues, unlike young engineers starting their careers,” it said.

“Not everyone in the industry needs to become in-depth climate or carbon experts […] The civil engineer of 2028 should be confident in their decarbonisation role and challenge other stakeholders where projects will not work for the greater good of the country or the planet.”

For civil engineers of the future, understanding trade-offs is crucial – some projects could result in higher carbon emissions at earlier stages, but this may be justifiable to ensure sustainable outcomes.

The government has also overhauled the Treasury’s Green Book, which offers guidance on how to appraise policies, programmes, and projects to include carbon in the earliest business-case stage for all relevant projects.

The ICE has called for a formal link between PAS 2080, which outlines standards for buildings and infrastructure and how to manage infrastructure carbon control, and The Green Book as a “helpful next step” to encourage better decision making.

“Given our reliance on infrastructure, and the fact that it accounts for half of all energy-related carbon emissions, civil engineers have a crucial role to play in helping society to meet the climate change challenge,” the ICE’s Porter adds.

That role may prove to be even more crucial in 2024 and beyond.


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