Infrastructure in both urban and rural areas is subject to significant risks in the face of climate change. It is at the heart of the climate change mitigation challenge: efforts to reduce emissions from energy, buildings, transport and cities require fundamental shifts to the way in which relevant infrastructure services are built and delivered. Efforts to increase the resilience of water supply systems can also affect relevant infrastructure choices. The challenge for the Fund will be to help shift investment decisions so these facilities are both less emission-intensive, and more resilient to climate impacts. Reducing basic service deficits and building resilient infrastructure systems can reduce exposure to hazards and vulnerability to climate change. Developing countries face particular challenges raising finance for infrastructure. Perceptions of country risk and the long time frames of the investments involved compound the challenge.
Infrastructure cuts across multiple result areas of GCF. One obvious risk to infrastructure from climate change is in coastal areas as a result of sea level rise and flooding. In some regions, a large percentage of populations are particularly affected by sea level rise and flooding due to their elevation and proximity to coastal areas. This is especially true in countries with substantial delta regions or those with large urban populations. In addressing development needs, massive infrastructure investments are underway in some countries. Strengthening the resilience of these investments to climate change and ensuring their coherence with the imperatives of realising low emission and climate resilient pathways in the long term is a key challenge. Through a focus on financing climate-compatible cities, GCF may be able to help support an integrated approach to infrastructure that offers both resilience and mitigation benefits. However, the risk of “maladaptation,” or investments that do not support the ability to respond to climate change impacts, needs to be managed carefully.