The report released by Intergovernmental Panel on Climate Change (IPCC) in August 2021 suggests that the 1.5°C global warming threshold is likely to be breached in the next 20 years, resulting in irreversible impacts on nature and ecosystems. While continuous efforts are essential to mitigate climate change, we must simultaneously accelerate the investment in climate adaptation to build resilience to climate change and reduce any associated damage. To effectively reduce the potential economic losses caused by increasing extreme weather events, all countries, especially developing ones, urgently need to accelerate investment in climate adaptation while enhancing their climate mitigation efforts.
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This report systematically defines and analyzes climate risks and the corresponding climate-resilient infrastructure (CRI) in China. Building on three case studies, it evaluates future agricultural drought risks, urban waterlogging, and coastal storm surges faced respectively, in three locations—Ningxia, Wuhan, and Shenzhen—and discusses the necessity of promoting CRI. Based on a Triple Dividend Framework (i.e., avoid damage loss, economic benefit, and social and environmental benefit), this report systematically analyzes the return on investment of three types of CRI such as water-saving irrigation facilities, sponge city construction, and green-grey sea dike construction in the three case study areas. The report estimates that every 1 RMB invested can generate RMB 2—20 of returns over a period of 30 years.
China is among the countries most affected by climate change. It is estimated that under a “worst-case climate change scenario,” the frequency of heatwaves in China could triple by the end of the 21st century. Water availability could be affected in the arid and semi-arid regions of western China, and the area of drought-affected farmland could increase by more than 2.5 times (Xie et al. 2019). An increase of 1.5°C in global average temperature could lead to $112 billion of direct economic losses from heavy rainfall and flooding in China, four times higher than between 2006 and 2018 (Jiang et al. 2020). Warming temperature and sea-level rise will exacerbate typhoon storm surges in China’s coastal areas. Shanghai, for example, could be submerged entirely under an extreme high tide scenario, with total economic losses estimated at round RMB 203.565 billion ($ 31.318 billion) (Yin 2011). Climate change has directly or indirectly caused damage to infrastructure, taking a heavy toll on human life and the economy.
Although the Chinese government’s firstly introduced the concept of climate change adaptation back to 1994, when China’s Agenda 21 was issued. However, the implementation of the adaptation policy is still in its infancy. Therefore, China urgently needs to build robust legislative policy and regulatory systems for climate adaptation and develop clear action plans and jurisdictional or sectoral coordination mechanisms to promote climate adaptation nationwide (Yang and Fu 2018).
As one of the founders of the Global Commission on Adaptation and a world-leading infrastructure developer, China must increase its investment in s CRI as early as possible.
China faces significant financial shortfalls of climate-resilient infrastructure (CRI). The annual funding gap of nearly RMB 500 billion must be filled quickly over the next five years by leveraging private capital and developing new financing mechanisms. Scaling up CRI more broadly in China is extremely important. For instance, the adoption of water-saving irrigation facilities nationwide can ensure national food security; sponge city construction can protect inland cities against stormwater damage; and green-grey sea dike protection can strengthen coastal resilience and protect coastal populations against storm surges. The three case studies suggest that innovative financial instruments—such as Resilience Bonds (RB), Public-Private Partnerships (PPPs), and Resilience Impact Bonds (RIB)—can create effective new finance streams to fund CRI.
The findings of this study are expected to inform China’s National Climate Change Adaptation Strategy 2035, and support the acceleration of climate adaptation action across governments at all levels during the 14th Five-Year Plan. As the first of its kind in China, this report could provide policymakers and researchers with a concrete research base and a standard methodological framework to advance climate adaptation actions.
