CDRI’s Biennial Report on Global Infrastructure Resilience

October 7, 2023

Climate change poses a significant threat to the world’s infrastructure sectors and buildings. A recent report sheds light on the estimated global average annual loss (AAL) in these sectors due to climate impact and disasters, highlighting the economic and political imperative for investing in resilience.

High Stakes: AAL and Its Impact

The report reveals that climate change could result in an estimated global AAL ranging from $732 to $845 billion annually. This staggering figure represents approximately 14 percent of the global gross domestic product (GDP) between 2021 and 2022. The report, titled “Biennial Report on Global Infrastructure Resilience: Capturing the Resilience Dividend,” was released by the Coalition for Disaster Resilient Infrastructure (CDRI) on October 4, 2023. Alarmingly, half of this financial risk is borne by low- and middle-income countries (LMIC).

Infrastructure Sectors Under Threat

In the principal infrastructure sectors alone, the global AAL from disasters and climate change is estimated to be between $301 and $330 billion. To address the infrastructure deficit, achieve Sustainable Development Goals, reach Net Zero emissions, and bolster resilience by 2050, a staggering $9.2 trillion must be invested. Out of this, $2.84-2.9 trillion is required in LMICs.

A Novel Risk Model

The report introduces the Global Infrastructure Risk Model and Resilience Index (GIRI), which is the world’s first fully probabilistic risk model publicly available for estimating risk related to infrastructure assets concerning geological and climate-related hazards.

The Hazard Breakdown

Geological hazards contribute to 30 percent of the total global AAL, while climatic hazards account for the remaining 70 percent. Climate change has the potential to significantly escalate AAL, with varying consequences for high-, middle-, and low-income countries.

Sectoral Concentration of Risk

Around 80 percent of the risk is concentrated in the power, transportation, and telecommunications sectors, as highlighted in the CDRI report.

Income Disparities in Risk

High-income countries hold approximately 67 percent of the global infrastructure asset value. Middle-income countries (both upper and lower) account for 24.8 percent and 7.0 percent, respectively, while low-income countries represent only 0.6 percent. Surprisingly, LMICs face the highest relative risk, with a relative AAL ranging from 0.31 to 0.41 percent, compared to 0.14 percent in high-income countries.

Varying Climate Change Impact

While high-income countries anticipate an 11 percent increase in AAL due to climate change, middle-income countries may face an increase of 12-22 percent, and low-income countries could experience a daunting 33 percent rise.

The Cost Distribution

Interestingly, capital investment in infrastructure assets accounts for only 15-30 percent of the total expenditure over their design lifecycle. Operations and maintenance, on the other hand, contribute significantly, accounting for up to 70-85 percent of the total expenditure, according to CDRI.

Challenges Faced by LMICs

LMICs grapple with numerous complex challenges, including a substantial infrastructure deficit that hinders social and economic development. These nations often suffer from low-quality infrastructure due to poor governance, and disasters disrupt services, exacerbating their challenges.

The Call for Nature-Based Solutions

The report advocates for nature-based infrastructure systems, which cost only 51 percent of traditional grey infrastructure projects. These nature-based solutions provide a more sustainable approach to infrastructure development.

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