The dawning of a new era of sustainable infrastructure

For sustainable infrastructure, the canvas has become broader

The pandemic gave us an opportunity to pause, think, and ponder upon how we do things, how business is conducted, facets of growth, and even sustainability.

The subsequent fallout of the pandemic has also led to questions pertaining to the resiliency of existing infrastructure.  As most countries have eased lockdowns, the next challenge for the government is to build roadmaps that address the worsening socio-economic challenges.  Undoubtedly, infrastructure would be the key to sustaining the growth momentum in a post pandemic world. For some, it is an opportunity to re-imagine and re-think how entire social ecosystems are built.

With all of the world’s major nations and blocs (the EU, the US, China, and Japan) recently announcing plans for climate or carbon neutrality, the canvas for green and sustainable infrastructure has become broader. This new infrastructure investment surge will be underpinned by decarbonization and digitization, with sustainability and ESG principles at its core. The question you are probably asking is will it work? Based on insights from ISPI, let’s examine the way forward for sustainable infrastructure initiatives.

Infrastructure demand is ever-increasing

Global infrastructure demand has not only remained unaffected by the pandemic but has increased due to the need for rapid growth after lockdowns. Infrastructure will catalyze the revival in international economies heavily impacted by the pandemic-induced crisis, as recovery plans in countries throughout the world demonstrate: Many governments have already asked for stimulus measures that include infrastructure, which will be a crucial component of the reconstruction process. These plans will vary by location, but they are expected to result in a pipeline acceleration.

The two pillars of decarbonization and digitization will support recovery in a way that is consistent with the need to address the most pressing issues of the day, with a focus on the application of ESG principles to business activities and solutions that are compatible with a circular economy: An economy that is self-sustaining to a degree as it depends on materials that can be recycled and reused while harnessing renewable energy.

Green and sustainable infrastructure will also be critical in achieving carbon neutrality targets, which are becoming a national priority in many nations. The European Union, the United States, and Japan have all pledged to become carbon-neutral by 2050, with China aiming for 2060. This means that decarbonization measures will require a significant amount of fresh investment, with sustainable infrastructure playing a key role.

A collaborative approach

Is it any surprise here that developing sustainable infrastructure cannot happen without the involvement of the private sector?

Public resources are inadequate to address the massive global infrastructure gap, estimated by the G20 Global Infrastructure Hub to be roughly US$640 billion per year until 2040. Ageing infrastructure, particularly in advanced economies, necessitates immediate additional funding to provide security, climate resiliency, and upgrade. As a result, private investors must be enlisted to help shoulder the burden and play a leading role in green infrastructure development. Being sustainable must become the part of the socio-economic ethos of world nations.

Ostensibly, policymakers, developers, and investors ought to build long-term plans that incorporate sustainable infrastructure as soon as possible. To boost social mobility and equity, increase access to healthcare and education, digital connectivity and technology, and change to a greener, more efficient energy usage, sustainable infrastructure must improve the inherent systems in cities. We already see some momentum in this direction across nations. However, it needs to far less disparate and better concerted to achieve the maximum impact as well as garner greater momentum.

Further, as global business models are period of transition to seamless digital ecosystems, the right investments can have a major impact on long-term business success:  Investing in infrastructure that gives possibilities for higher education and other technical training programmes to stakeholders such as investors, the government, landowners, farmers, and businesses would result in a greater regional GDP. Spillover effects will be observed if critical investments in digital infrastructure are made in a time, allowing stakeholders to stay connected and access opportunities that will help promote long-term growth.

Disclaimer: The views expressed in this article are those of the author and do not necessarily reflect the views of ET Edge Insights, its management, or its members

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