Bringing risk into the infrastructure mainstream

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Amal-Lee Amin is Chief of the Climate Change and Sustainability Division of the Inter-American Development Bank, and sits down with Citizen Today about the need to plan for climate risk when developing infrastructure projects.

What do you see as the main climate risks to cities?

Amal-Lee Amin (ALA): Cities are very concentrated in terms of population, economic activity and jobs. So the physical impacts of climate change can bring very significant risks.

In our region, many of the cities are located in particularly vulnerable areas. Those by coasts can be at risk from rising sea levels. Other cities, particularly mountainous ones like La Paz in Bolivia, are reliant on water supplies from glaciers.

Such cities are very likely to be vulnerable to challenges over the availability of water in the future. So we see this as an absolutely critical issue to address, for the social and economic development of the region.

Can you give examples of how the Bank is helping cities to address some of these risks?

ALA: We have a major initiative on cities that has been operating over the last five years called the Emerging Sustainable Cities Initiative.

We’ve helped 71 cities so far under this initiative. The priority initially was not large cities, but those that were likely to undergo very significant growth. We help these cities look at their vulnerabilities to climate change and understand how they might be addressed.

The initiative brings together city planners, mayors and others who are concerned about the future of these cities and their ability to sustain a rapidly growing population in light of the changing climate and the impact that will bring.

One of our first major climate resilience investments was in Bolivia, working with local communities in El Alto, the second biggest city in the country, to come to an arrangement to ensure that water resources could be allocated effectively.

This required nearby communities in rural areas, local farmers, indigenous farmers, to allow for water supplies to be diverted toward the city, which meant working with them to improve their agricultural productivity.

This demonstrates the importance of taking a holistic approach. When we look at cities, it often means working with those in nearby rural areas.

It’s absolutely essential to start to understand the climate vulnerabilities and risks at as early a stage as possible when planning infrastructure projects.

How do you help governments to work with the private sector to fund climate resilient infrastructure projects?

ALA: We’ve got a study underway that is trying to understand better how institutional investors perceive the risks around sustainable infrastructure.

Clearly, climate impact is one of the potential risks that might prevent those investors coming in. Our study seeks a deeper understanding of how investors perceive climate risks and how we as a Bank can better address them.

For public-private partnership (PPP) arrangements, it is important to identify those risks very clearly. PPPs can be very complex to negotiate anyway. So addressing climate risks up front and ensuring that there are some contingency measures in place if the climate risks become a reality is crucial.

 

For more information please contact Bill Banks

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This article is excerpted from the November 2016 edition of Citizen Today. See also these featured articles: