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Want Green Infrastructure? First, Invest in Infrastructure

That’s not all that needs to be done, but it may be a necessary first step, researchers argue.

By Nathan Collins


(Photo: Donald Miralle/Getty Images)

Throughout the election, one of the few points Donald Trump and Hillary Clinton could agree on was the country’s need for improved infrastructure—transportation systems, energy, and so on. But tradeoffs between sustainability and economic growth make it unclear how exactly to proceed. Now, researchers argue that, to create environmentally sustainable infrastructure, we need to pay attention to what’s keeping us from investing in infrastructure more broadly.

“For the world to meet the twin challenges of improving human welfare whilst preventing the worst impacts of climate change, it will need to develop and follow a model of emissions minimizing, resource-efficient ‘green’ economic growth,” Ilmi Granoff, J. Ryan Hogarth, and Alan Miller write in a Nature Climate Change perspective. Meeting those challenges may require a new approach.

“First, scaling up infrastructure investment is a necessary condition to achieving green growth, but not a sufficient condition: it can lock in emissions or efficiency,” the team writes. “Second, mobilizing capital for low-carbon infrastructure investment will have less to do with establishing billions of dollars in ‘new’ resources for low-carbon infrastructure, and more to do with unlocking and decarbonizing the trillions of dollars in annual infrastructure investment yet to be deployed under any growth scenario.”

Those conclusions stem from several observations about the state of infrastructure spending around the world. First, despite evidence of economic benefits, investment in buildings, roads, and transportation has fallen in countries like the United States and Germany in recent years, according to an International Monetary Fund report. At the same time, much of the infrastructure in those countries is starting to crumble. In developing countries, there’s simply less infrastructure to begin with.

Low-carbon infrastructure—such as sustainably built buildings that use less energy—also doesn’t cost much more than traditional infrastructure. So the problem is not really one of additional cost, or even a shortage of cash.

Basically, it’s a collective action issue: The benefits, whether economic or environmental, are shared by everyone, while the costs are more concentrated. That makes it unlikely private companies will invest to improve roads or office buildings. Governments, already under pressure to reduce expenditures and lower taxes, have had a tough time obtaining the financial resources needed to improve infrastructure. That problem is exacerbated for sustainable infrastructure: Because they’re newer, low-carbon alternatives are perceived as riskier investments.

Solving those problems is not likely to be easy. The researchers argue that governments will need to strengthen institutions for investment and planning, and adopt new strategies for valuing those investments—for example, changing infrastructure budgets to allow amortizing costs over a time frame comparable with the benefits. As if that isn’t hard enough, governments will need to end fossil fuel subsidies and find a way to attract private investment for public projects.

“The conversation must shift away from narrow discussions about the projects to which ‘climate finance’ should be allocated,” the research team writes. “A more sensible discussion looks to questions of how public policy, government institutions and development choices can shift much more of the vast pool of global capital resources, public and private, towards infrastructure.”