linking eco-viability with economic gains

linking eco-viability  with economic gains
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Infrastructure projects must take into account changes in factors that affect performance and economic viability over their life, and climate change requires that we take this aspect into account in their design

Economic development is driven by and rests on the foundation of adequate and suitable infrastructure. Different countries in the world provide primacy to the creation of infrastructure as an essential step to the path of development, and those nations that lag behind in this respect pay a heavy price in terms of foregone economic opportunities. However, given the long economic life of infrastructure assets, the design of facilities has to consider changes that may take place in the future, which may affect their performance and functioning.

For instance, the design of a hydro-project will need to take into account changes in rainfall that may be projected in its catchment area. This becomes increasingly important with projected changes in precipitation on account of climate change. Increasingly, in coastal areas, infrastructure, both existing as well as that are to be constructed, will need to take into account the projections of sea level rise and the risks from coastal flooding and storm surges. We in India have not yet come to grips with this challenge. Perhaps, those responsible for designing the new capital city of Andhra Pradesh will need to take this aspect into account, because not making such an important city climate resilient will involve risks to life and property and can have serious economic implications.

A stark example of vulnerable coastal infrastructure is the famous Waikiki Beach in Honolulu, Hawaii, which houses a large number of hotels and other tourist facilities. The coastline in this location is projected to recede possibly by a mile in a few decades, which will wipe out all the facilities located on or near the beach unless protective infrastructure is created, such as dykes, which keep the sea out. But then, the attraction of being located on an extensive beach like Waikiki will be lost. Much of the land area of the Netherlands is below sea level, and the Dutch have historically protected themselves with the construction of dykes which keeps the sea from inundating land areas.  Currently, that country is in the process of developing a 35-year plan to strengthen and raise the height of existing dykes to take into account projections of sea level rise. This plan will involve investments of billions of euros, but expenditure is seen as imperative.

The result of Superstorm Sandy, which hit the north-east of the US in 2012, was massive flooding of the city of New York. There was serious damage to the pair of railway tunnels which connect Manhattan with New Jersey, and this is causing continuing operational problems with economic consequences, which will mount over time.

Ultimately, these tunnels will have to be shut down and refurbished on account of corrosion. Amtrak, the railway system operator in the US, is racing to construct a set of new tunnels before there is a breakdown of operations with the existing tunnels. These can be labelled as measures to adapt to the impacts of climate change, but such actions will not be complete unless they take into account projections of climate change and their impacts. Even so, adaptation by itself will not be enough to reduce the risks from climate change and bring them to acceptable levels. The world has to mitigate the emissions of greenhouse gases, particularly carbon dioxide, to ensure that the goal set in the Paris agreement on climate change for limiting temperature increase to two degrees celsius is met. Further, scientific assessment by the Intergovernmental Panel on Climate Change may show that even the two degree limit may carry risks that are not acceptable to the global community.

The US has an opportunity to integrate climate change considerations with infrastructure development. The American Society of Civil Engineers has just projected a 1.44 trillion dollar funding gap for infrastructure between 2016 and 2025, which has implications for business, the country’s export performance and overall income. It is important that if such an investment level is to materialise then it should take into account the objective of resilience towards climate change impacts.

One region which needs to take into account knowledge on climate change and its projected impacts is the Gulf region, which has no doubt achieved rapid economic growth in the past four decades, but which is extremely vulnerable to the impacts of climate change. This was brought out in a stark manner when Dubai and Sharjah suffered the unprecedented occurrence of flash floods a few weeks ago. The IPCC has projected an increase in the frequency and intensity of extreme precipitation events, and given the nature of the terrain in that region and poor drainage facilities, any such occurrence converts sudden and heavy rainfall into floods. Such extreme precipitation events have been seen in Saudi Arabia as well, where the similarly sandy nature of soil leads to accumulation of water on the surface. There is also growing evidence of coral bleaching in the region, which has implications for marine species and the loss of fishing potential.

The UAE, like other countries in that region, is heavily dependent on import of food, and with a rapidly growing population, there is a concerted effort to buy land in other countries of Africa and other nations, such as Pakistan, to ensure food security. The loss of fish stocks in the region on account of climate change would need to be considered along with impacts in countries like Sudan, where the UAE has got into arrangements for growing food for its own consumption. It is often stated that the conflict between south Sudan and the rest of that country was at least partly the result of prolonged and unprecedented droughts. If food for the countries of the Gulf region is to be grown in other locations then again infrastructure needs for supply of water, for instance, would need to be part of robust policy to ensure high agricultural productivity and food security for the countries of the Gulf.

In our own country, the debate regarding inter-linking of rivers arouses extreme passion on environmental and ecological grounds. But it is essential to also realistically evaluate possible seasonal and perennial surpluses after taking into account the impacts of climate change. A number of dams constructed in the past do suffer from problems of inadequate supply of water, thereby affecting economic activities downstream and the viability of investments made. Projects involving the inter-linking of rivers are substantially higher in capital intensity, and therefore, their financial viability is much more sensitive to variations in availability of surplus water flows. 

Overall, given the long economic life of infrastructure projects a level of rigour that factors in knowledge of what is likely to happen with conditions essential for the viability of the project will ensure that not only would these projects serve society more effectively, but also ensure their economic merit.

Infrastructure projects are required to take into account changes in factors that affect performance and economic viability over their life, and the scientific reality of climate change requires that we take this aspect into account in their design. Not to do so will not only be poor economic decision-making, but also expose people and property to unacceptable levels of risk.

(The writer is former chairman, TERI)

Daily Pioneer
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