Ensuring new infrastructure is climate-smart
About US$90 trillion in infrastructure investment is needed globally by 2030 to achieve global growth expectations, particularly in developing countries. To achieve this, infrastructure investment needs to be both scaled up, and, due to climate risk, integrate climate objectives. Infrastructure investment has become a core focus of international economic cooperation through the G20 and also for established and new development finance institutions. Integrating climate objectives into infrastructure decisions will increase resilience to climate change impacts, avoid locking in carbon-intensive and polluting investments, and bring multiple additional benefits, such as cleaner air and lower traffic congestion. Shifting to low-carbon infrastructure could add as little as 5% to upfront investment costs in 2015-2030. These costs could be offset by resulting energy and fuel savings. A number of institutions have already started integrating climate risk into their investment decisions, but this needs to be done in a far more systematic way, making best practices the norm. For example, several international institutions are working to halt unabated coal project financing, but this effort will need to extend to national development banks and newer multilateral development banks (MDBs). International finance will also have to be significantly scaled up to deliver the US$90 trillion. This includes increasing capitalisation of both national and multilateral development banks.