Water-related infrastructure investments in a changing environment: a perspective from the World Bank

Abstract

At present, there is a global deficit in infrastructure and the World Bank Group (WBG) is one of the major sources of financing to reduce this gap worldwide. The WBG has policies and protocols for approving investments taking into consideration financial and economic indicators while ensuring social and environmental safeguards. In recent years, these safeguards have been updated to include the effects of climate change and robustness and resilience to support climate-informed project investment decision-making. A series of tools for screening projects for climate vulnerabilities and identification of risk management options have been developed to help project teams comply with these requirements. One of these tools is the hierarchical four-phased Decision Tree Framework (DTF) that, beyond screening, helps to analyze plans and project vulnerabilities, climate-related or otherwise, using a decision scaling approach, and explore risk management options, if necessary. The four phases of the DTF are (i) project screening, (ii) initial analysis, (iii) stress test, and (iv) climate risk management. This paper reviews applications of the DTF from the climate change screening phase to non-climate uncertainty screening and decision-making for project investments and prioritization. A peek into work in progress for incorporating resilience in the decision-making process, both for projects and through projects, is also provided, as well as next steps, looking forward. HIGHLIGHTS Since 2010, the World Bank Group has developed several tools that facilitate climate risk assessment and evaluation to inform decision-making.; The Decision Tree Framework (DTF) integrates them within a bottom-up approach which accounts for various uncertainties that challenge the water sector while narrowing the gap between science and its practical applications.; The DTF permits the consideration of resilience aspects beyond the physical dimensions of water infrastructure including the integration of human, economic, and institutional-governance systems.; The DTF pilot studies suggest its practicality, flexibility, and scientific coherence for its application in the wide diversity of water projects across various geographies.; Apart from its progress, the DTF still needs to adequately refine the incorporation of green infrastructure, water quality risks, energy efficiency and renewable, sea-level rise, and others.;

Keywords

• climate change
• climate-informed investments
• decision-making
• development
• infrastructure
• uncertainty