Institution of Civil Engineers calls for government review of economic case for climate resilience
The Institution of Civil Engineers (ICE) has called on the UK government to commission an independent review of the economic value of climate adaptation, arguing that a better understanding of the costs of extreme weather and the benefits of resilience investment could help unlock funding for infrastructure.
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The recommendation is contained in a new ICE policy paper, Making resilience count: the economic value of climate readiness. ICE says climate resilience and adaptation are consistently undervalued in infrastructure investment decisions, partly because their benefits can be difficult to quantify and much of the relevant data is fragmented.
The call comes after a summer of extreme heat. Research from the Grantham Research Institute at the London School of Economics estimated that the June heatwave resulted in around 24m lost working hours and a £1.15bn reduction in economic output. The researchers based their assessment on a survey of 1,950 adults and estimated the effects of changes to working hours during the week beginning 22 June.
The ICE argues that such impacts demonstrate the wider economic consequences of climate risks, which extend beyond direct damage to infrastructure. Its report proposes a government-led review covering infrastructure sectors and multiple timescales, with a whole-system approach that considers interdependencies between transport, energy, water and other critical services.
The review would also examine the data available to infrastructure owners and decision-makers, the methodologies used to assess the costs of climate impacts and inaction, and the role of economic and safety regulators in encouraging adaptation.
ICE says the review should have an independent element but be commissioned from the centre of government, with a senior minister accountable for implementing its findings. It compares the potential role of the review with the influence of the Stern Review on the economics of climate change.
The government has already identified climate adaptation as an area of potential economic activity. In July a government report estimated a potential UK climate-adaptation market of £254bn between 2026 and 2035, covering areas including physical interventions, insurance and financial services.
The government's Third National Adaptation Programme also identifies infrastructure resilience as a priority, covering risks including flooding, drought and heatwaves.
ICE's report makes the now familiar argument that earlier investment would reduce future costs as climate impacts intensify. It says better evidence of the economic value of resilience would help government, regulators and asset owners make more informed decisions about spending on adaptation alongside investment in new infrastructure.