Sustainable Infrastructure: we want it, we need it, and we can live better with it

I just came back from spending three days in Panama at the Sustainable Mega-Infrastructure and Impact Assessment symposium, jointly organized by the IDB and the International Association for Impact Assessment. We visited perhaps the best known infrastructure project in Latin America and the Caribbean – the Panama Canal – and learned how they have managed water, biodiversity, and stakeholder engagement to move forward with the canal expansion in a sustainable manner.

From the discussions in the symposium, it was clear that infrastructure is crucial for inclusive economic growth and integration in Latin America and the Caribbean, and for delivering key transport, water and sanitation, energy, and communications services to a growing urban populace.

Since infrastructure projects have such a big impact on people and places for so long, they are subject to growing public scrutiny. Projects that have negative effects on people or the environment can often be slowed or blocked by litigation or by civil society actions, often fueled by social media.

A major challenge is emerging in Latin America and the Caribbean. On the one hand, the need for new and rehabilitated infrastructure projects to deliver services in increasingly complex urban and rural environments. And on the other hand, the need to effectively manage the risks and impacts associated with infrastructure projects that have consequences for many different stakeholders and environments, often over several decades and over large areas.

Approaching infrastructure though a sustainability perspective provides a mechanism to respond to this challenge, by potentially offering tools that can address the economic, social, environmental, and governance aspects related to infrastructure, in an integrated way.

During the symposium, three major challenges emerged

1. How to clarify and agree on what sustainable infrastructure entails
2. How to shift from a project-centric view to one that takes a much broader approach, encompassing project portfolios, landscapes, and multiple sectors, among others
3. How to develop, share models and provide the right incentives to support more sustainable infrastructure.

So, what is sustainable infrastructure? An increasing number of tools and approaches describe and measure sustainability. These approaches take the broad aspirational goals of sustainability and break them into different areas that are relevant to infrastructure projects. During the symposium participants discussed draft sustainable infrastructure principles. The idea is to better define the concept. These principles can help serve as a vision of what we should be striving for in terms of sustainable infrastructure. Without such a vision, it will be difficult to know what we are trying to aim for, or assessing if we are getting closer to our goals.

One principle stood out: good governance to set projects in a broader, integrated planning context, at the sector or regional level.  This includes ensuring that the strategic infrastructure need has been established and that planning is integrated with other infrastructure development, other sector developments, and with all other users of resources. In particular, the broader planning process should take into account the needs and values of civil society and engage them directly from the planning process onward. Indeed, sustainable infrastructure projects can, and should be, a powerful tool for conservation and for the promotion of human rights.

Clearly, achieving this is a major challenge in Latin America and the Caribbean, where the government’s role in infrastructure planning has changed over the years with the incorporation of the private sector and the decentralization of decision making to regions and municipalities. In this sense, international organizations like the IDB have a key responsibility in demonstrating to our counterparts in the Region, with facts and hard data, that building sustainable infrastructure might be expensive today, but not doing so will definitely be even more expensive tomorrow.

For example, as highlighted by Roberto Roy, Board Chairman of the Panama Canal Authority, the Canal’s business is essentially “selling water.” Thus it would be highly misguided to design the Canal expansion without including water conservation measures that mitigate the effects of climate change on water availability, and therefore on the project’s adequate operation over time.

Another issue that arose from the discussions was that sustainability is often about integration of, and tradeoffs between, different needs of different stakeholders. As such, there is no holy grail of sustainable infrastructure – rather, there are projects and project portfolios that exhibit the characteristics of sustainability to different degrees. What is increasingly important is the ability to measure, describe, and share examples of sustainability as a way to encourage change. Of equal importance is to share innovative approaches to incentivizing sustainability – both through identifying areas for improvements in projects and identifying potential sources of concessional or grant financing to support change.

The IDB’s Sustainable Infrastructure Strategy focuses on how to provide the region’s citizens with high quality public services through properly planned infrastructure that is environmentally, socially, and fiscally sustainable. The strategy also makes a fundamental paradigm shift, from viewing infrastructure as an “asset,” to viewing it as a “service.” This shift in perception also drives a shift in not only in thinking about the purpose of infrastructure but also in ensuring that we look at infrastructure throughout its lifecycle.

Alexandre Meira da Rosa was appointed Vice President for Countries in July 2014. Between 2010 and 2014 he served as Manager of the IDB’s Infrastructure and Environment Sector. Before joining the IDB, Mr. Rosa held different positions in Brazil’s Federal Government, most recently Vice-Minister of International Affairs at the Ministry of Planning, Budget and Management. Mr. Rosa has a Bachelor’s degree in Law from the Federal University of Minas Gerais, a Master’s degree in Economics from the New School for Social Research in New York and a Graduate Certificate in Finance from the University of California, Berkeley.

Main Photo: Autoridad del Canal de Panamá