For the end-of-year Infrastructure Policy Watch, the ICE rounds up the topics that shaped global infrastructure decision-making this year.
In 2023, a challenging global economic picture pushed governments to reprioritise investment.
Efforts were made to improve strategic planning, productivity and delivery to minimise the impact on infrastructure pipelines.
Extreme weather was another cause for reprioritisation as climate resilience rose up governments’ agendas.
Meanwhile, warnings about a lack of progress on decarbonisation and delivering the Sustainable Development Goals will frame decision-making going forward.
Here’s a round-up of this year’s key themes for global infrastructure policy.
1. Inflation pushed governments to reprioritise spending …
National infrastructure pipelines shifted in the context of elections and the ongoing global economic challenges.
The Australian and UK governments scaled back major infrastructure projects.
The review said the 10-year programme inherited from the former coalition government was undeliverable amid changed economic conditions.
The UK government first delayed and then cancelled the northern leg of the High Speed 2 rail link, citing spiralling costs.
The UK government also reaffirmed its choice to maintain capital budgets in cash terms. This effectively means a cut in infrastructure spending due to the ongoing impact of inflation.
But it hopes measures set out in the Autumn Statement will incentivise companies to up their capital investment.
It's promised a 30-year infrastructure plan to deliver this.
Hong Kong’s government remained resolute about increasing physical connectivity with the Greater Bay Area.
But, poor economic growth means it will issue infrastructure bonds rather than use its fiscal reserves to fund it.
Infrastructure key to meeting national challenges
Despite the economic headwinds, infrastructure investment is the solution to many long-term challenges.
That was the conclusion of the UK’s second National Infrastructure Assessment.
For governments, the challenge is making the right long-term decisions – and sticking to them – while securing public buy-in about the benefits of infrastructure investment.
In the US, the Inflation Reduction Act is showing how clear priorities and funding certainty can drive transformative infrastructure investment.
And South East Asian governments looked to spur their countries’ green transitions.
Malaysia and Singapore used their budgets to set out investments in green technology and climate resilience.
2. …and focus on improving productivity and delivery
Inflation’s impact on construction has focused global attention on improving infrastructure delivery.
Australia’s independent infrastructure review also criticised its governments’ responses to cost pressures, delays, and changes to project scope as ‘too ad hoc’.
Similarly, a report by South Africa’s Auditor General highlighted how poor infrastructure governance impacts South Africans' lives.
Project delays and overspend mean South Africa lacks the infrastructure and investment needed to deliver on key government programmes.
The government had already identified the need to strengthen technical expertise and institutional capacity to deliver its infrastructure pipeline.
The UK Infrastructure Projects Authority’s (IPA) annual report on the Government Major Projects Portfolio highlighted the value of ‘front-end loading’.
This strengthens governance by ‘getting the fundamentals right from the outset’.
But, 70% of major projects given the lowest ‘red’ confidence assessment were in the infrastructure and construction category.
The New Zealand Infrastructure Commission/Te Waihanga highlighted the benefits of transparency and accountability for improving delivery.
It also said the government needs to become a more sophisticated client and industry be more open to new technologies and methods to improve efficiency.
Planning reform key to delivery
The New Zealand report also emphasised the importance of efficient planning and consenting systems.
These can reduce costs and speed up delivery.
Speed of delivery is crucial for governments to achieve decarbonisation and adapt to climate change at the pace and scale required.
It also published strategies to halve the time it takes to build new energy infrastructure and drastically reduce delays in connecting new power sources to the grid.
3. Cost of living pressures complicated the politics of net zero
This year, the Intergovernmental Panel on Climate Change warned that only ‘deep, rapid and sustained emissions reductions’ in all sectors will limit global warming to 1.5°C.
But inflation – and the pressure on household expenses – also impacted how governments are approaching net zero.
The UK’s Climate Change Committee (CCC) warned that the country’s progress towards net zero has slowed.
It highlighted a lack of leadership and vital policy gaps, such as reducing energy demand.
But, the government went ahead with rollbacks on electric vehicle and energy efficiency measures.
The prime minister cited the need to ease the cost of the net zero transition on the public.
The decision highlights the lack of a public engagement strategy in the UK to bring people along on the journey.
Elsewhere, though, governments and institutions stepped up their ambition.
Malaysia’s government published its National Energy Transition Roadmap.
One of the goals is to increase the share of renewable energy supply from just 3.9% in 2020 to 22% in 2050.
The Asian Infrastructure Investment Bank aligned itself with the 2015 Paris Agreement climate goals.
It means new investment operations will support infrastructure projects contributing to climate change mitigation, adaptation and resilience.
4. Extreme weather brought climate resilience to the fore
New Zealand endured a series of natural disasters that severely affected critical infrastructure and raised questions about its resilience.
The then-government reprioritised transport policy – including moving some investment from emissions reduction towards infrastructure repair and resilience.
Te Waihanga called for a more fundamental discussion about climate adaptation in New Zealand.
This should include the level of risk people are willing and able to tolerate and who costs should fall on to manage this risk.
A further report from the New Zealand Lifelines Council highlighted the interdependencies between infrastructure sectors.
Cyclone Gabrielle caused several cascade failures across systems.
To mitigate this, the report says resilience must be properly integrated into infrastructure investment, planning and recovery frameworks, and maintenance strategies.
The UK government published its third five-year National Adaptation Plan (NAP3).
This followed the CCC’s assessment that the current approach to resilience and adaptation was unfit for purpose.
It highlighted systems vulnerabilities to cascade failures – just as New Zealand experienced. Slow implementation, data gaps and lack of ambition were also issues.
But, the government’s response to the CCC failed to address key areas of concern.
5. The Sustainable Development Goals continue to slide off track
The Sustainable Development Goals (SDGs) are a blueprint for addressing many of these global challenges.
However, progress against them has continued to slow or even reverse.
This year marked the halfway point to 2030. But the UN's 2023 Global Sustainable Development Report warned that the goals are “far off track”.
This echoes the findings of other reports this year.
For instance, SDG7 aims to achieve affordable, reliable, sustainable and modern energy for all by 2030.
However, the annual Energy Progress Report says the rate of global progress in electricity access, renewable deployment and other areas is too slow.
Governments remain committed to achieving the SDGs.
For example, Singapore is on track to achieve 61% of the targets.
This year, the Singapore government completed a second Voluntary National Assessment highlighting its progress.
This included a Cooperation Programme to provide technical assistance to help other governments meet their targets.
The SDGs are still achievable.
But reversing the global trend will require higher levels of ambition, transformative policies, capacity building and a coordinated approach across all countries, according to the UN report.
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