*This blog originally appeared on the IDB’s Viva Sustainability blog on Monday, May 2, 2016
At the IDB we set ourselves the complex task of not only achieving a common agreement on what sustainable infrastructure entails, but making it a top development priority in Latin America and the Caribbean. The IDB’s Sustainable Infrastructure Strategy states that our efforts must be focused on providing inclusive public services through infrastructure that is socially, fiscally and environmentally sustainable. To deliver on this, we recognize that it is critical to define specific criteria and to constantly assess and identify areas for improvement. Many rating systems available in the market are hugely helpful in this sense.
With that in mind, the IDB has been working hand-in-hand with the Harvard University’s Zofnass Program for Sustainable Infrastructure, which has established a comprehensive set of criteria “The Envision Rating System” which can be applied to several infrastructure sectors. The focus of the IDB’s work with Zofnass has been to systematically incorporate sustainability considerations into the Bank’s infrastructure operations. Last year we developed a series of case studies applying the Envision criteria, ex-post, to a number of IDB-funded infrastructure projects to better understand how rating systems work, and to see what lessons we could learn to build more sustainable projects in the future[i].
To discuss the results of this exercise, in April, we gathered together key IDB decision makers, notably Pablo Pereira, Head of the IDBs Infrastructure Department and Juan Pablo Bonilla, Head of IDBs newly created Climate Change and Sustainability Department for a discussion with experts Andreas Georgoulias, from the Zofnass Program, and Amar Bhattacharya, Senior Fellow at Brookings Institution and a prominent contributor to the global sustainability discussion. The discussion provided a great platform to consolidate our understanding of what sustainability infrastructure means to the IDB, our progress to date in supporting Latin American and Caribbean countries developing sustainable infrastructure projects, and perhaps most importantly, what the road ahead looks like.
Mr. Bhattacharya was emphatic in pointing to the critical importance of providing more and better –sustainable– infrastructure, as a way to help achieve the UN Sustainable Development Goals. Furthermore, he asserted that with many countries facing fiscal and monetary policy limitations, investments in sustainable infrastructure could help boost demand in the short run, while ensuring stable and inclusive long-term growth.
Mr. Georgoulias set out that, as shown by the results of the case studies, the policies that IDB applies to ensure technical soundness, including its social and environmental safeguards, are crucial to ensure project sustainability. He highlighted some prevailing gaps that should be addressed, including the need to conduct climate change assessments and incorporate robust adaptation strategies in IDB investment projects to ensure long-term climate resilience. The latter, reflects a globally recognized problem, since global efforts to date have focused predominantly on climate change mitigation, rather than on adaptation measures.
Our work to date with Zofnass, together with the advice of global experts and discussion with our clients and project specialists, has helped us to better understand what sustainable infrastructure looks like and understand the challenges at the sector and project level. This has led us to recognize a significantly more complex challenge, which goes well beyond the project-specific scope: the need for countries to adopt a long-term, integrated planning approach to infrastructure investment.
Planning for sustainability entails adopting a holistic approach to development, through which the countries’ infrastructure needs are assessed on the basis of the available -human, natural and fiscal- resources, and considering the potential contradictions and synergies between different infrastructure systems and sectors. The decision of building new housing solutions, for example, should be taken by considering as well how public services in the area will be provided (water, sewage, electricity, transportation), how the construction and its maintenance will be paid for, and what are the likely environmental impacts of the new construction— all of which can only result from an adequate planning process.
Thus this is unquestionably the most critical step we need to take–defining investment strategies on the basis of a planning and prioritization process is critical to ensure an optimal use of the limited natural and financial resources available for countries. And it is also a key requirement to develop a suitable pipeline of sustainable infrastructure projects that attract enough potential funding sources—particularly from the private sector.
This is a road fraught with complexities, but we have a unique opportunity to shape the region’s sustainable development. We know that the IDB, as well as the other Multilateral Development Banks, is in a privileged position to push this agenda: not only can MDBs help leverage greater private sector financing; we can also support institutional reforms needed to facilitate the development of viable investment plans.
The IDB’s Emerging and Sustainable Cities Initiative (ESCI) is an excellent example of the support MDBs are able to offer: ESCI prepares technical, multi-sectoral analyses to diagnose emerging cities’ main development bottlenecks, in three dimensions-climate change and environmental sustainability, urban sustainability, and governance and fiscal sustainability. And on the basis of such diagnostic it helps cities develop, implement and monitor effective and feasible action plans. ESCI’s methodology recognizes planning as the sole viable approach to come up with optimal solutions to cities’ sustainable development.
What’s next? At the IDB we will continue to promote and support governments in planning for sustainable infrastructure and we look forward to an ongoing discussion with the experts and stakeholders on how we can improve our approaches to doing so.
[i] The Envision case studies will be published shortly. In the meantime, 3 of the projects (that underwent an Envision assessment are profiled in the IDBs Sustainability Report (Ref: pp22 “The Bahamas: Easing Traffic Problems and Flooding with a Road and a Pond”; pp24 “Ecuador: Controlling Water through Restoration”; and pp58 “Brazil: Encircling South America’s Megacity”).
María Cecilia Ramírez is a consultant for the Infrastructure and Environment Sector at the IDB. She has a Master in Economic Theory from the Paris School of Economics and a Master in Public Administration from Columbia University. Follow her on Twitter: @macramirezb