27 February 2019

New report identifies critical investment needs for climate-friendly infrastructure

IIASA researchers contributed to a new World Bank report that provides a comprehensive estimate of spending needs for infrastructure goals in developing countries. It shows that smart investments could allow countries to achieve climate goals while simultaneously filling basic needs such as water and energy.

© Thierry Vialard | Dreamstime

© Thierry Vialard | Dreamstime

A new World Bank report finds that investments of 4.5 percent of GDP will allow developing countries to achieve their infrastructure-related Sustainable Development Goals and stay on track to limit climate change to less than 2°C. That amount is similar to what many countries already spend on infrastructure and no more expensive than options that add further stress to the environment, according to the report.

Today, an estimated 40 million people live without electricity, 663 million lack improved sources of drinking water, 2.4 billion lack improved sanitation facilities, one billion live more than two kilometers from an all-season road, and four billion people lack internet access.

The new report, entitled Beyond the Gap: How Countries Can Afford the Infrastructure They Need while Protecting the Planet, includes analyses of investments needed to solve these challenges. It addresses a variety of areas including water, sanitation, and irrigation, clean electricity, transport, flood protection, and decarbonization. These estimates provide the first comprehensive numbers for investors and policymakers working to support sustainable development.

IIASA researchers contributed to two chapters of the report, focused on energy systems and irrigation, and also provided data to an interactive database published along with the report.

Amanda Palazzo, a researcher in the IIASA Ecosystems Services and Management Program, led an analysis focused on irrigation investments. Working with co-authors Hugo Valin, Miroslav Batka, and Petr Havlik, she found that ambitious public support for irrigation, on the order of $50 billion per year until 2050, could improve food security globally while limiting expansion of cropland area. However, the effectiveness of irrigation to achieve a larger set of goals depends on the regional context. A more achievable scenario could achieve some of the climate and land SDG goals, and would cost only $26 billion per year.

“We found that investments in irrigation infrastructure could play an important role in adaptation to the most adverse climate change; however, increased water scarcity may also limit adaptation potentials,” says Palazzo.

The investments required for energy system transformation are substantially larger than other sectors, according to research contributed by IIASA Energy Program researchers David McCollum, Wenji Zhou, and Energy Program Director Keywan Riahi. That analysis estimated that to meet countries’ Nationally Determined Contributions to the Paris Climate Agreement, an additional US$130 billion of annual investment will be needed by 2030. To achieve the 2°C target the gap is US$320 billion and for 1.5°C it is US$480 billion. These investment figures represent more than a quarter of total energy investments foreseen in the baseline scenario, and up to half in some economies such as China and India. This contribution to the report was also published in Nature Energy last summer.

In addition, IIASA researchers provided estimates of investments needed to achieve other SDGs including water, education, and reducing air pollution.

World Bank Press Release: Price Tag for Sustainable Infrastructure Spending in Developing Countries is 4.5% of GDP


Rozenberg, Julie; Fay, Marianne. 2019. Beyond the Gap: How Countries Can Afford the Infrastructure They Need while Protecting the Planet. Sustainable Infrastructure; Washington, DC: World Bank. © World Bank. License: CC BY 3.0 IGO

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Last edited: 27 February 2019


Amanda Palazzo

Research Scholar

Ecosystems Services and Management

T +43(0) 2236 807 457


Keywan Riahi

Program Director


T +43(0) 2236 807 491

Press release

World Bank: Price Tag for Sustainable Infrastructure Spending in Developing Countries is 4.5% of GDP

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