Source:Global Center on Adaptation
Extreme weather events are growing in frequency and scale. Bushfires. Droughts. Tropical cyclones. Floods that should be one in 100-year events happening every few years. The recent horrific flooding in South Africa that killed more than 400 people, wiping out large segments of transport infrastructure and real estate is, sadly, climate change theory becoming reality.
Building in climate resilience into infrastructure and real estate investments is no longer an optional extra. It’s an imperative. A necessity for citizens and communities who rely on economic and social infrastructure to run their businesses, get to work or school, and pay the bills. Essential, also, for the developers and owners of infrastructure. In some countries, the natural long-term owners of infrastructure are pension funds and insurance companies. Ultimately, that includes everyone with some savings or a pension – increasingly domestic pools of savings capital. Infrastructure and real estate assets that adapt to climate change impacts are going to be more resilient financially and operationally.
Large-scale retrofitting of existing infrastructure to adapt to climate change is possible and, as risks become reality, is increasingly used around the world. For example, one of the solar energy projects that Macquarie’s Green Investment Group has invested in through our green finance partnership with the UK Government, is in an arid region that is already experiencing water stress. Look ahead 25 years and this is going to snowball into a bigger problem, resulting in more dust on the solar panels, which will require more cleaning due to frequent drought conditions. There will be greater pressure on water supplies for social, agricultural, and other economic uses. With our fellow shareholders, we invested in retrofitting a waterless cleaning system.More info