Mott MacDonald global head of climate resilience services Ian Allison
The City of Cape Town’s ‘Day Zero’ water crisis of 2018, as well as the deadly Cyclone Idai, which ravaged parts of Mozambique and Malawi in March, has increased awareness about the need to begin investing in climate-resilient infrastructure.
To transition from awareness to implementation, however, requires a “monetisation” of the climate risks, Mott MacDonald global head of climate resilience services Ian Allison argues.
He tells Engineering News Online that, by placing a monetised risk value on potentially vulnerable infrastructure and assets, utilities, cities and companies will be better placed to weigh the costs and benefits of investing for climate resilience.
Climate resilience is the capacity of a system to absorb and/or withstand the stresses imposed by climate variability and climate change.
The business case for such investments is becoming increasingly apparent, with insurance giant MunichRe estimating that global losses resulting from natural disasters have already increased to $300-billion a year. By 2030, Mott MacDonald report that yearly climate-related losses are expected to climb to $1-trillion.
A recently published World Bank report argues low- and middle-income countries would, on average, secure a $4 benefit for each $1 invested in more resilient infrastructure. Published in June and titled ‘Lifelines: The Resilient Infrastructure Opportunity’, the report finds that the current lack of resilient infrastructure in low- and middle-income countries costs households and firms at least $390-billion a year.
Allison proposes a three-pronged approach to assessing and monetising climate risks, starting with a review of the climate ‘what ifs’, whereby the intensity, frequency and acute nature of a possible event, such as flooding or temperature variations, is gauged.
Secondly, and physical assets should be assessed for their exposure and sensitivity to climate events, as well as how dependent a system or community is on that asset.
Finally, the potential direct economic losses should be quantified for the utility or municipality, along with the knock-on financial costs to businesses and communities.
Allison believes that only once the potential financial and economic costs are visible will policymakers and executives be willing to justify that added upfront expense of improving the resiliency of the key assets.
Given the infrastructure backlogs in South Africa and Africa, there is even an opportunity to “do it right the first time”, by integrating the ‘climate resilience nexus’ of robustness, redundancy, resourcefulness and recovery planning.
“There is a clear resilience dividend, as apart from the financial benefits, such investments could also save lives and ensure a continuity of services to communities and firms during extreme weather events.”
Allison is encouraged by the South African government’s acknowledgement of the threat posed by climate change, epitomised by the institution of a carbon tax and the release of the second draft of the country’s Climate Change Bill, which is currently being discussed by the social partners at the National Economic Development and Labour Council.
In addition, South African cities are able to deploy an online climate risk profiling and adaptation tool, recently launched by the Council for Scientific and Industrial Research, to assess their climate risk exposure.
Nevertheless, the country now needs to begin integrating climate resilience into its actual infrastructure planning and budgeting processes. Mott MacDonald sees this as part of mobilising a ‘social compact’ and will continue promoting this dialogue to increase accountability and responsibility by us all.
“We’re seeing a high level of general awareness which is encouraging, but much progress is needed to achieve full implementation,” Allison concludes.