A new report released by the World Bank Group, AXA Climate, and Scientific Climate Ratings highlights the significant economic and social benefits of investing in resilient infrastructure. Titled “Low Cost, High Yield: The Adaptation and Resilience Investment Opportunity for Infrastructure,” the report demonstrates that relatively small investments in climate adaptation can generate substantial financial returns while protecting critical infrastructure, jobs, and essential services in emerging markets.
According to the report, natural hazards currently cost low- and middle-income countries approximately $390 billion annually, representing around one to two percent of their combined GDP. Without stronger resilience measures, climate-related risks could result in the loss of up to 43 million jobs across 49 countries by 2050. These findings underline the growing urgency of integrating climate adaptation into infrastructure planning and investment decisions.
The analysis focused on infrastructure assets across three sectors in Brazil under high-emissions climate scenarios. Researchers found that targeted resilience measures can protect up to $8.60 in asset value for every $1 invested. The study also revealed that interventions costing between 2.4 and 8 percent of an asset’s value often provide the highest returns, making resilience investments both effective and financially attractive even in budget-constrained environments.
The report argues that resilient infrastructure should be viewed not as an additional cost but as a strategic investment that safeguards long-term economic performance. By reducing the risk of service disruptions and asset damage, resilience measures help maintain business continuity, preserve employment opportunities, and support sustainable growth. These benefits are particularly important for developing countries that face increasing exposure to climate-related disasters.
Another key finding highlights the importance of long-term financing. The report concludes that extending financing tenors can improve project bankability more effectively than reducing interest rates alone. This underscores the role of multilateral development banks and development finance institutions in providing long-term capital, blended finance solutions, and risk-sharing mechanisms that encourage greater private sector participation in resilience investments.
The report emphasizes that resilient infrastructure plays a critical role in protecting communities during extreme weather events and other climate-related shocks. By investing modest amounts upfront, infrastructure operators and investors can preserve significant asset value while ensuring that essential services remain operational when they are needed most.
Overall, the findings present a compelling case for scaling up investment in climate adaptation and resilience. As climate risks continue to intensify, resilient infrastructure is increasingly viewed as a practical and cost-effective solution for protecting economies, creating jobs, reducing financial losses, and supporting sustainable development in emerging markets.
