Water-related infrastructure investments in a changing environment: a perspective from the World Bank

Abstract

Abstract At present, there is a global deficit in infrastructure and the World Bank Group (WBG) is one of the major sources of financing to reduce this gap worldwide. The WBG has policies and protocols for approving investments taking into consideration financial and economic indicators while ensuring social and environmental safeguards. In recent years, these safeguards have been updated to include the effects of climate change and robustness and resilience to support climate-informed project investment decision-making. A series of tools for screening projects for climate vulnerabilities and identification of risk management options have been developed to help project teams comply with these requirements. One of these tools is the hierarchical four-phased Decision Tree Framework (DTF) that, beyond screening, helps to analyze plans and project vulnerabilities, climate-related or otherwise, using a decision scaling approach, and explore risk management options, if necessary. The four phases of the DTF are (i) project screening, (ii) initial analysis, (iii) stress test, and (iv) climate risk management. This paper reviews applications of the DTF from the climate change screening phase to non-climate uncertainty screening and decision-making for project investments and prioritization. A peek into work in progress for incorporating resilience in the decision-making process, both for projects and through projects, is also provided, as well as next steps, looking forward.