“To improve infrastructure countries not need money, but plans"

Is there a link between the quality of municipal services for waste collection and the growth of greenhouse gas emissions? What are overlap areas of the ordinary city water distribution and the increasing global climate change? Can we stop climate change by improving financing, for instance, for the city infrastructure? These are quite strange comparisons and questions according to an ordinary dweller. But it’s only the first impression…

During the last decade the structure of global financing for combatting climate change has grown in the volumes and the level of complexity. Financing goes through multiple multilateral funds, bilateral channels and the private capital markets, which makes it more difficult and longer to realize projects. Therefore, today the issues of possibilities for fast and effective access to financing from international funds, exchange of experience to realize financing programs in the countries of Central Asia and beyond, as well as possibilities for studying new financial instruments accessible for farmers and entrepreneurs among others – are high on the agenda. 

In her speech at the Second Central Asia Climate Change Conference (CACCC 2019) in April 2019 in Tashkent (Uzbekistan), Virginia Marshall representing the Organization for Economic Cooperation and Development (OECD) directly specified the ever-increasing link between investments to development and improvement of infrastructure and prevention of negative impacts of climate change, based on the examples from the Central Asian region. 

Virginia Marshall started her speech with the words on “action in relation to climate change must be taken immediately – in the nearest 5, 10 or 20 years. If we do not use this window now, the situation will deteriorate, and it will be impossible to change it even for decades. It is important to use the remaining time for “creation of low-carbon society”. To do this we need to develop low-carbon or “green” economy, which is characterized by low consumption of fossil fuels, and accordingly, decreasing human impact on the environment. Transition to a low-carbon economy is implemented through realization of such policies as energy efficiency, climate and environmental safety policy.

Unfortunately, today the energy, transport, construction and water management infrastructures are responsible for over 60% of greenhouse gas emissions, therefore the growth of GHG emissions is the most pressing issue, resolving which is part of the UN Sustainable Development Goals (SDGs). Therefore, investments in improving and developing infrastructure of the countries in the next 15 years will take around 6.9 USD trillion. Where would these finance flows be directed in the first place? To resolve this issue countries must objectively assess their needs and demands, and identify existing gaps, and then only direct their financial flows. 

“At the moment”, Virginia Marshal notes, “there is around USD 3 trillion available and the remaining USD 3.9 trillion needs to be found. In doing so it’s important that investments in the proper infrastructure type enable economic benefits and advantages for investing countries. And not only in long-term prospect. The examples of such “fast” projects are improving employment and increasing the living standards of the people. These types of investments make sense for any government”. Further she said that “access to infrastructure services in Central Asia has serious gaps without doubt. The distinction of the region is that the existing infrastructure is in unsatisfactory state. For example, 75% of transport roads need road construction work and if we want the region to really come alive, transport flows be effective, roads need to be revived. And not only highways between the states, but domestic road infrastructure in each particular country”.

It sounds as a paradox, but the most important factor of improving infrastructure happens to be not the financing, but long-term planning for at least year 2050. Only ten countries parties to the UN have long-term strategic planning and “roadmaps”. And these are not just documents collecting dust on shelves but enforced guidelines that exist. Why haven’t other countries yet developed such needed and important documents for them and started their implementation? The problem is that to work on a strategy, all agencies, ministries and other government structures need to join efforts. It needs collective efforts.  In addition, the developed strategy needs to be updated regularly to take into account new and affordable innovations, “green” technologies and methods, which increase its effectiveness and reduce costs. 

There is no doubt that a long-term strategy needs to include projects necessary for climate change adaptation, which need to be selected based on the real picture in a specific individual country. Virginia Marshall emphasized that “…in working with the governments of the countries we would like to have some options. Have a right to say that possibly it’s better to invest in “this”, but not “that” infrastructure, leaving the natural ecosystem alone, for example. If there is a possibility to not develop a project, to not develop it at all”. Also, the expert noted the importance of attracting private capital to investments in projects with the goal of climate change adaptation. While doing so the priority should be to link the interests of private businesses with addressing climate issues and create necessary conditions for working with the support of the government. In addition, reliable and proven information about climate situation and related gaps should be accessible to everyone, including businesses that risk their capital. 

For reference:

- The Second Central Asian Climate Change Conference (CACCC 2019) was held on April 3-4, 2019 in Tashkent (Uzbekistan). The main objective of the conference is to promote regional cooperation and partnership in climate change adaptation and mitigation in Central Asia. The conference is a continuation of the World Bank's initiative to knowledge and information sharing on climate change in Central Asia and is supported by the CAMP4ASB project. The first conference was held on January 24-25, 2018 in Almaty (Kazakhstan).

- Organization for Economic Cooperation and Development (OECD) – is an international economic organization for developed countries, recognizing the principles of representative democracy and free market economy. Established in 1948 under the Organisation for European Economic Co-operation (OEEC) to coordinate projects of European economic reconstruction within the Marshall plan. The steering body of OECD is the Council of representatives of country members to the organization. All of the decisions are adopted based on a consensus. 

This publication is available in Russian