A new ICE policy programme will explore how to boost investment in adapting the UK’s infrastructure to climate change.
Climate change is already causing irreversible effects on the planet.
Effects the UK’s infrastructure is not ready to face.
Too little is being spent on ensuring that the systems people and the economy rely on can withstand more frequent and extreme weather events.
Whereas before political parties agreed on the need for climate action, that consensus – which the UK has benefited from – is now splintering.
Why isn’t the government investing more in resilience?
Cost and uncertainty have been the key challenges.
One of the main barriers to investment is that the resilience and adaptation of infrastructure assets lack a market value.
In our 2023 paper How can the UK’s infrastructure system be made more resilient?, the ICE recommended that the UK government undertake a national review of the economics of adaptation.
A more complete understanding of the costs and benefits, as well as the costs of inaction, can help encourage the required levels of investment.
Our new policy programme will set out how the government could and should achieve that understanding.
The current UK government has signalled it will strengthen climate resilience efforts. But strategic intent must quickly turn into delivery.
This programme aims to strengthen the case for the government to urgently embed climate resilience and adaptation into its spending plans, including the 2027 Spending Review.
Reducing uncertainty
The inherent uncertainty in climate projections makes it difficult to assess the risks to infrastructure and how much it will cost to adapt to them.
Adaptation is often less attractive to investors than net zero – which has more predictable returns. Asking taxpayers and billpayers to pay more to prevent or reduce the impact of unknown scenarios is a difficult sell.
The focus on the negative impacts of climate change and the immense costs of dealing with them can also overshadow the economic case for resilience, including the benefits it can bring – for example, making places more attractive and enjoyable to live in.
A better understanding of the economic value of adaptation and resilience would reduce some of that uncertainty.
It could be a valuable tool for communication around climate change, provided it’s accessible and easy to understand for the public.
That would enable an honest debate about the trade-offs involved – as well as clarity about the benefits of investing now.
In turn, this would also help to rebuild the public and political consensus around the need for more urgent climate action.
Challenges and opportunities
The government’s ability to conduct an economic review will depend on the quality and availability of data.
Information about existing asset health or how infrastructure systems perform in response to extreme weather is often lacking or fragmented across multiple bodies.
To help fill those gaps, our 2023 paper recommended making adaptation reporting mandatory under the UK Climate Change Act for all infrastructure owners and operators.
A government-led review could also be an opportunity to evaluate how UK economic regulators factor climate risks into their decisions.
Governments and regulators need to work together so that rules and policies incentivise investment in resilient infrastructure.
But it’s unclear how current regulatory frameworks value this resilience.
For example, there can be tension between the political and economic goal of keeping customer bills low and the need to spend money now to maintain and adapt infrastructure for the future.
Share your views
The ICE is keen to hear from interested stakeholders regarding the following questions:
- Which sectors and timescales should the review examine?
- Which department, institution or individual should lead and coordinate the review?
- What climate-risk and infrastructure-asset datasets exist, who owns them and where are the gaps?
- What methodologies should be used to estimate the economic cost of inaction?
- What economic valuation methods are most appropriate for adaptation projects?
- What lessons can be learned from international approaches and other sectors?
- How can the review evaluate the role of economic and safety regulators in embedding adaptation into decisions?
- How should success be monitored over time, given the often-invisible benefits of adaptation and resilience?
Please contact [email protected] with your views by 12 June. All responses will be treated confidentially.
The findings from responses will inform a policy paper later this year with a series of recommendations for government and decision-makers.
Sustainable Development Goals:
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