BCG and CDRI Unveil Landmark Report at COP29: Urgent Call for Resilient Transport Infrastructure to Safeguard South Asia’s $2 Trillion in Climate-Exposed Assets

• More than US$2 trillion worth of infrastructure assets are exposed to climate risks in South Asia, with 30% being attributed to the transport sector alone.
• By proactively addressing vulnerabilities in both existing and planned infrastructure for the transport sector, the region could mitigate more than US$7 billion in direct losses till 2030.

Baku, November 19, 2024 – The Boston Consulting Group (BCG) in partnership with the Coalition for Disaster Resilient Infrastructure (CDRI) has today published a report titled “Transport Infrastructure Reimagined: Forging Resilient Connections – An Integrated Framework to Unlocking Resilience Dividends for South Asia”. The report was launched at COP 29 in Baku, Azerbaijan, over a Side Event co curated by BCG and CDRI, on the topic of “Unpacking Systemic Resilience of Infrastructure Networks”, hosted at CDRI Pavilion. The event was attended by global leaders from governments, multilateral organizations, financial institutions and businesses, and witnessed eminent panelists deliberate upon the crucial topic of infrastructure resilience over a fireside chat and panel discussion.

Transport infrastructure is the backbone of economic development in South Asia, a region that accounts for 4-8% of global GDP. At least $575 billion worth of transport assets are currently exposed to climate-related hazards, including floods, cyclones, landslides, and heat waves. However, as climate change accelerates and irreversible impacts become more severe, the region faces a growing challenge: South Asia is set to incur significant damage to infrastructure assets worth

$2Trillion and 30% of this figure would stem from transport sector. Without immediate and strategic interventions, this figure is projected to increase, threatening the economic and social well-being of over 2 billion people in South Asia.

India has prioritized the adaptation action for long, and intends to submit the country’s first national adaptation plan in the coming year, mentioned Rajasree Ray, Economic Advisor and India Focal Point for Green Climate Fund, MoEFCC, Govt. of India.

"The climate challenges facing South Asia are immense, but so are the opportunities. By reimagining transport infrastructure through a resilience lens, we can unlock significant economic, environmental, and societal dividends for the region." stated Amit Prothi, Director General,  CDRI.

“The global infrastructure funding gap is set to exceed $15 trillion by 2040, according to the World Economic Forum, and estimates of the money needed to slow climate change rise as  high as $50 trillion over the next 25 years”, mentioned Suresh Subudhi, Managing Director and Senior Partner at BCG.

Below are the Key Insights from the Report:

1. Vulnerable Assets: The transport sector, accounting for over 50 percent share of exposed infrastructure globally at approximately US$ 90 trillion (as of 2022), faces acute vulnerability  to climate disruptions.
2. Projected Economic Impact: The South Asian region faces cascading economic losses due to climate risks, with disruptions in transport having cascading effect on key sectors such as manufacturing, agriculture, and services among others. The report projects that without resilience measures, these disruptions could generate risks threatening 4-8% of SA’s GDP by impacting the transport sector, with ripple effects across supply chains and employment.
3. The Climate Imperative: The frequency and severity of climate events in South Asia have escalated sharply in recent years. In 2023 alone, over 93 million people were affected by 400 disasters globally, with more than $202 billion in economic damages. The cost of inaction in South Asia is staggering—without strategic interventions, climate risks could derail decades of development progress.
4. Resilience Dividends: In the face of a changing climate, resilient transport systems emerge as the foundation for continued economic stability and growth. By proactively addressing vulnerabilities in both existing and planned transport infrastructure, the region could avert over US$ 1 billion in direct damages annually. These returns extend beyond economic gains, fostering environmental sustainability, improved public services, and strengthened social stability.
5. Resilience remains largely underfinanced: while resilience financing has progressed, it still represents only 20-30 percent of the US$ 215-387 billion needed annually by 2030 in developing countries.

This report delves deep into the transport sector, identifying the success factors that make an infrastructure project resilient. It establishes the pressing need for a synergistic, interlinked strategy, calling for a renewed approach in how resilience initiatives in transport are considered today. The report also prompts a diverse range of stakeholders, from governments and infrastructure entities to financial institutions and think tanks, to create a unified front in building resilient transport systems.

“With $400 Billion worth transport assets in India being severely exposed to the perils of disaster and climate change, rapid deployment of resilience measures is a must; innovation has a major role to play”, mentioned Vineet Vijayavargia, Managing Director and Partner at BCG.

The panel discussion moderated by Tania Banerjee, Associate Director, BCG had eminent experts deliberate upon the role of science & technology, capacity and finance, and collaboration in mainstreaming resilience across infrastructure, old and new. Key recommendations that emerged from experts during the session:

• A cohesive approach to address challenges on data, policy and finance is key to ensure that resilience in infrastructure is embedded across sectors.
• Systemic thinking in developers and infrastructure providers is necessary for resilient infrastructure development; capacity building in this regard is the prime success factor
• Adaptation remains underfunded, and within this share, finance for resilient infrastructure needs significant impetus through innovative outcome indicators and instruments such as adaptation bonds.
• To speed up pace of implementation, as well as enhance accuracy of planning and design, innovation is key across evidence generation, informed policymaking and financing instruments.

 

“India accounting for 80% of the South Asian region’s asset exposure to geo climatic hazards stands at an opportune moment to avert significant infrastructure losses by adopting an integrated approach to embed resilience across existing and planned projects”, stated Anirban Mukherjee, Managing Director and Partner at BCG.

Public and private sector partnership in resilient infrastructure development is a must, and governance and capacity are key to this transformation, explained Ranjini Mukherjee, Director – Research, Knowledge Management & Capacity Development at CDRI.

Annika Zawadzki, Managing Director & Partner at BCG further highlighted the role of private sector in infrastructure resilience, stating the need to incentivize corporates towards enhance resilience uptake.

Ashish Kulkarni, Partner and Associate Director, BCG in his closing remarks mentioned “Resilience embedded in standards and implementation of these standards in all future transport infrastructure will ensure derisked finance flows in a changing world.”

The report concludes with six clear calls to action, identifying leadership roles by various stakeholders to make resilience in transport infrastructure a reality going forward.

About BCG and CDRI:

Boston Consulting Group

Boston Consulting Group partners with leaders in business and society to tackle their most important challenges and capture their greatest opportunities. BCG was the pioneer in business strategy when it was founded in 1963. Today we work closely with clients to embrace a transformational approach aimed at benefiting all stakeholders—empowering organizations to grow, build sustainable competitive advantage, and drive positive societal impact.

Our diverse, global teams bring deep industry and functional expertise and a range of perspectives that question the status quo and spark change. BCG delivers solutions through leading-edge management consulting, technology and design, and corporate and digital ventures. We work in a uniquely collaborative model across the firm and throughout all levels of the client organization, fueled by the goal of helping our clients thrive and enabling them to make the world a better place.

Coalition for Disaster Resilient Infrastructure (CDRI)
Launched by Hon. Prime Minister of India at the UN Climate Action Summit in New York in 2019, the Coalition for Disaster Resilient Infrastructure is a partnership of national governments, UN agencies and programmes, multilateral development banks and financing mechanisms, the private sector, and academia that aims to promote the resilience of new and existing infrastructure systems to climate and disaster risks in support of sustainable development.

For further queries, please contact:

Mallika Srinivasan | (M): +91 9818094372 | mallika.srinivasan@cdri.world