Financing Infrastructure for Climate-Change Adaptation in Developing East Asia

Date:

7 July 2023

Category:

ASEAN, Environment and Climate Change, Infrastructure

Type:

Research Project Reports

Editors:

Fauziah Zen, Usha Iyer-Raniga

Tags:

Infrastructure, Climate Change, Finance, East Asia

Print Article:

Climate change has resulted in a surge in natural disasters, and the Asia-Pacific region alone contributes to over half of the global carbon dioxide emissions. Addressing climate change through adaptation measures is crucial for effectively dealing with these natural calamities and ensuring environmental resilience. It also demands the development of infrastructure that can withstand such disasters and adapt to changing environmental conditions. However, financing climate-adaptive infrastructure poses significant challenges, as it requires substantial resources, research, and transitional processes. These challenges are particularly pronounced in emerging economies with limited government funding.

To address this financing gap, innovative approaches such as public–private partnerships and mixed finance schemes have been introduced. These schemes involve pooling funds from international organisations, development agencies, the corporate sector, charitable foundations, and public sources, enabling risk diversification and indirect investment. By implementing climate-change adaptation strategies throughout the infrastructure lifecycle, including planning, design, implementation, management, and utilisation, we can not only reduce emissions but also safeguard the environment.

This report offers an analytical overview of the key characteristics of infrastructure funding in selected East Asian economies, focusing on the context of climate change adaptation. It delves into the various financing mechanisms and strategies employed to support climate-adaptive infrastructure development.