Governance for greening infrastructure
The magnitude and urgency of the climate crisis calls for a new holistic public governance approach to infrastructure to make the green transition happen. This implies the mobilisation of all public policy and expenditure tools for an effective green transition, taking present and future environmental impacts of today’s policy decisions into account.
Explicit alignment of long-term national infrastructure plans with environmental or climate action plans in OECD countries, 2020
Support to procurement workforce on how to promote environmental protection in infrastructure procurement in OECD countries, 2020
Why is this important?
With infrastructure increasingly playing a major role in governments’ environmental agendas, governments will require the right set of tools to navigate difficult policy choices in the short- and medium-term. The green transition will depend to a large extent on governments’ ability to deliver environmentally sustainable infrastructure. Strengthening the quality of governments’ steering is thus key to deliver on greener and cleaner infrastructure targets nationally and internationally, and to engage with the private sector and the civil society to work collectively towards achieving these objectives.
How to guide sustainable infrastructure investments to ensure effective delivery?
Steering the green agenda: aligning the strategic long-term infrastructure vision with environmental policy objectives
Countries can improve infrastructure long-term planning to ensure that the long-term vision is aligned with climate and environmental objectives and can be used as an instrument to steer the green agenda by:
- Demonstrating clear and credible commitment to long-term climate goals, international biodiversity targets, and other environmental objectives;
- Ensuring that infrastructure long-term planning takes into account environmental and climate considerations, and the link with other government priorities such as inclusion and territorial development;
- Using the vision to underline a clear investment strategy that sends a message to financial markets of strong government leadership and will for low-carbon infrastructure;
- Accommodating future uncertainties resulting from climate change and technological innovation;
- Estimating the potential effect of the long-term strategic vision on the environment;
- Ensuring cross-sector synergies and introducing a systemic approach to improve resilience in the long-term;
- Developing a strategy to scale up financing of sustainable infrastructure in the medium and long-term;
- Developing transparent pathways to create greater investment predictability and strengthening the demand for sustainable investment.
Strengthening project alignment with green objectives and delivery for a sustainable infrastructure pipeline
Countries can ensure that the project appraisal and prioritisation process fosters sustainable infrastructure by:
- Better integrating environmental considerations into project prioritisation, while also broadening the scope of the cost-benefit analysis;
- Including sustainability as part of a rigorous project assessment process to inform the capital budgeting process;
- Ensuring decisions on infrastructure investments are informed by robust evidence-based analysis;
- Accurately accounting for the financial cost of carbon and environmental externalities in the financial evaluation of infrastructure projects;
- Supplementing cost-benefit analysis with other methodological tools to analyse both monetary and non-monetary costs, such as multi-criteria analysis;
- Integrating sustainability considerations into the evaluation of projects;
- Valuing ecologically sustainable project design;
- Adopting a life-cycle perspective to estimate environmental benefits and costs of an infrastructure asset;
- Engaging stakeholders to ensure infrastructure needs are addressed in a sustainable, inclusive and effective way;
- Aligning existing evaluation tools and processes with green objectives to streamline implementation.
Capacity building for sustainable infrastructure investment
Countries can foster capacity building for sustainable infrastructure investment by:
- Identifying key challenges and reasons for project failure and providing support to develop a mitigation strategy;
- Increasing awareness and providing capacity building on green infrastructure;
- Improving capability to translate climate objectives into functional specifications for PPP and project tenders;
- Leveraging public development finance institutions to play a catalytic role and strengthening the public sector’s capacity;
- Improving visibility and technical assistance to projects and making smart use of financial resources.
Country case studies
- U.S. International Development Finance Corporation
- Infrastructure Investment and Jobs Act
- Commercial Law Development Program
- Multi-criteria analysis manual
- Waterford Greenway
- Milan’s 2020 Adaptation Strategy
- National Development Plan 2021-2030
- Infrastructure Development Bank
- Investing in Canada Plan
- Canada Infrastructure Bank
- Balancing Priorities (UNEP, 2021)
- Fiscally sustainable wind farms (UNEP, 2021)
- Clean Energy Finance Corporation (GIH, 2019)
- John Hart Generating Station (GIH, 2019)
- Mersin Integrated Health Campus (GIH, 2019)
- PPP Prisons Program (Lots 1-3) (GIH, 2019)
- Pan Am Games Athletes’ Village (GIH, 2019)
- Milton District Hospital Expansion (GIH, 2019)
- Samuel De Champlain Bridge (GIH, 2021)
- Infrastructure Economic Account (GIH, 2021)
- Incheon Bridge Project (GIH, 2021)