IDB report highlights need for resilient infrastructure regime
Speaking to The Bahamas’ particular vulnerability following Hurricane Dorian, a just released Inter-American Development Bank (IDB) report on infrastructure resilience in the region highlights the effects of climate change on infrastructure services and the need for them to be strengthened.
The report, entitled “From Structures to Services: the Path to Better Infrastructure in Latin America and the Caribbean”, noted that given climate change, electricity pricing structures will need to shift from a pricing scheme based on the volume demanded to one with a higher fixed component, to cover the investment required to expand and maintain the electricity transmission and distribution network.
“Although Hurricane Dorian was an outlier historically, it may not be an outlier looking forward as the effects of climate change proliferate and intensify. Importantly, the effects of climate change on infrastructure services go well beyond natural disasters; changing temperature and precipitation, for example, can have a dramatic impact on the provision of energy, water and transportation services. Governments must heed warnings of this ‘new normal’, they must acknowledge the uncertainty they face due to future climatic trends and events and their increasing exposure to natural disasters by planning resilient infrastructure services,” the report notes.
“By establishing constructive regulatory and policy regimes and incorporating principles of decision-making under uncertainty, governments across the region are beginning to make important investments in infrastructure that will be resilient to natural disasters and the uncertainty of climate in the future. These investments pay off in lower maintenance costs and fewer service interruptions, thereby minimizing economic losses for businesses and individuals and reducing disruptions to the daily lives of citizens.”
The report also highlighted that infrastructure will be key to spur post-pandemic recovery.
“Infrastructure will be a critical component as we build our post-pandemic economies and aim to reduce inequality,” IDB Chief Economist Eric Parrado said.
“Budgets will be tight, so we must invest wisely and sustainably. Our report recommends areas where government policies can promote innovations and bring a service-oriented vision to infrastructure.”
The IDB said even small improvements in service efficiency by increasing digitalization and other actions can boost growth by 5.7 percentage points over a 10-year period, which for Latin America and the Caribbean, represents approximately $325 billion in additional income over ten years.
On September 1, 2019, Hurricane Dorian struck The Bahamas with devastating force. Media attention focused on the US$7 billion in losses to residential, commercial and industrial property, but property damage was far from the only lasting consequence. Grand Bahamas International Airport was under water. Roads were flooded, stymieing rescue efforts. Well water became contaminated. The island of New Providence suffered a total blackout. On Abaco and Grand Bahama, life ground to a halt as residents were left with “no electricity, no running water, no banks, no grocery stores, or gas stations”, notes the report.