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Pragmatic cost–benefit analysis for infrastructure resilience

Nature Climate Change volume 12, pages 881–883 (2022)Cite this article

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Infrastructure investment needs to account for climate change globally, yet most day-to-day projects are small and poorly served by economic assessment processes. Four simple adjustments to cost–benefit analysis practices would greatly improve decision making for future infrastructure resilience.

Worldwide, day-to-day decisions about infrastructure investments have been slow to take serious account of inevitable (if uncertain) climate change, but, as the lived experience of dealing with climate-related disasters increases, a strong political and economic mandate to consider resilience in infrastructure business case assessments is emerging everywhere. For example, there is strong convergence between the World Bank (WB)1 speaking about low- and middle-income countries globally, the Organization for Economic Co-operation and Development (OECD)2 speaking for high-income countries, and national bodies such as the UK National Infrastructure Commission (UKNIC)3 and Infrastructure Australia (IA)4 on:

  • Urgency and return on investment. All organizations agree that investing in more resilient infrastructure is robust, profitable and urgent as it can greatly outweigh repair and reconstruction costs. The extra cost of resilient infrastructure can be as little as 3% of overall investment, with at least a fourfold return on investment (WB)1. Flexible and adaptive approaches to infrastructure can reduce the costs of building climate resilience given uncertainty about the future (OECD)2. Both national bodies highlight urgency, calling for an urgent rethink (IA)4 to value resilience properly “before it is too late” (UKNIC)3.

  • Capacity needs and improved methods. All organizations also call for “the development of technical and institutional capacity to manage climate-related risks” (OECD)2 in an anticipatory and systemic approach (UKNIC, IA)3,4. These capacities must be complemented by access to information and tools to deliver robust decisions in the face of uncertainty (OECD, WB)1,2. Specifically, they highlight the need to use cost–benefit analyses (CBAs) that properly value resilience and consider risk and uncertainty (OECD, IA)2,4.

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Authors and Affiliations

  1. CSIRO Land and Water, Canberra, Australian Capital Territory, Australia

    Russell M. Wise, Tim Capon & Mark Stafford-Smith

  2. CSIRO Land and Water, Brisbane, Queensland, Australia

    Brenda B. Lin

Authors
  1. Russell M. Wise
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  2. Tim Capon
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  3. Brenda B. Lin
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  4. Mark Stafford-Smith
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Contributions

R.W., T.C. & M.S.-S. conceived the paper; all authors wrote, commented on and edited the manuscript at all stages; and M.S.-S. undertook submission and the corresponding author role.

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Correspondence to Mark Stafford-Smith.

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The authors declare no competing interests.

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Wise, R.M., Capon, T., Lin, B.B. et al. Pragmatic cost–benefit analysis for infrastructure resilience. Nat. Clim. Chang. 12, 881–883 (2022). https://doi.org/10.1038/s41558-022-01468-5

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