# EUR-Lex - 52013SC0137 - EN

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# 52013SC0137

**COMMISSION STAFF WORKING DOCUMENT Adapting infrastructure to climate change Accompanying the document COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE AND THE COMMITTEE OF THE REGIONS An EU Strategy on adaptation to climate change /* SWD/2013/0137 final */**

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COMMISSION STAFF WORKING DOCUMENT

Adapting infrastructure to climate change

Accompanying the document

COMMUNICATION FROM THE COMMISSION
TO THE EUROPEAN PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL
COMMITTEE AND THE COMMITTEE OF THE REGIONS

An EU Strategy on adaptation to
climate change

Contents

1........... Introduction. 2

1.1........ Scope of this paper 2

1.2........ Definition. 3

1.3........ Risks and opportunities. 3

2........... Impacts of climate
change on infrastructure. 4

2.1........ Trends and patterns. 5

2.2........ Territorial aspects. 5

2.2.1..... Cities and urban areas. 6

2.2.2..... Coastal areas. 7

2.2.3..... Mountainous regions. 7

2.2.4..... Outermost regions. 8

2.3........ Sector-specific impacts. 9

2.3.1..... Transport infrastructure. 9

2.3.2..... Energy infrastructure. 10

2.3.3..... Construction and buildings. 11

3........... Addressing common
challenges. 12

4........... EU policy
mainstreaming. 16

5........... Instruments. 18

5.1........ EU instruments for
improved climate resilience. 18

5.1.1..... Technical Standards. 19

5.1.2..... Environmental Impact
Assessment and Strategic Environment Assessment 20

5.1.3..... Framework for the assessment
and management of flood risks. 21

5.1.4..... Climate “proofing” of
infrastructure. 21

5.2........ Financing climate
resilient infrastructure. 23

5.2.1..... EU financing. 24

5.2.2..... Private-sector investment
and business opportunities. 25

5.2.3..... The role of insurance. 27

6........... Annex. 29

6.1........ Annex 1: Climate risk and
impacts on transport infrastructure. 29

6.2........ Annex 2: Climate risks
and impacts on energy infrastructure. 32

6.3........ Annex 3: Climate impacts
on buildings/construction sector 34

1.           Introduction

This staff working document accompanies the
Communication "An EU strategy for adaptation to climate change".
Together with the Impact Assessment, it provides further background material
supportive of the narrative and arguments put forward in the Communication. It
also presents, for some areas, an outline of actions that the Commission will
be undertaking, as announced in the Communication.

1.1.        Scope
of this paper

Section 4.3 of the
Communication stresses that due to the long life span of much of our infrastructure
and its great economic value, preparedness for current and increasing future
impacts of climate change over the life time of infrastructure is critical.

Left unmanaged, climate
change may significantly affect the operational, financial, environmental and
social performance of large fixed assets and infrastructure. This paper
presents the contribution of the European Union to climate change adaptation in
selected infrastructure sectors. It covers energy and transport
infrastructure as well as buildings in the EU – sectors which were
given priority for adaptation policy mainstreaming in the 2009 White Paper on
Climate Change Adaptation.[1]
The paper also discusses the instruments and financing provided by the European
Union to make Europe's infrastructure more climate resilient.[2]

Adapting infrastructure
to climate change is a fast-growing, global business in which European know-how
and experience could open up new economic opportunities. By promoting public and private investment in climate-resilient
buildings and in smart, upgraded and fully interconnected transport and energy
infrastructure, EU climate action makes an important contribution to delivering
growth and jobs in Europe. In
line with Europe 2020, it simultaneously contributes to progress towards more
sustainable transport and a secure and clean energy market.

1.2.        Definition

The term "infrastructure" usually
refers to physical assets in a wider range of policy areas, including
communications, emergency services, energy, finance, food, government, health,
education, civil protection, transport or water. Buildings, from private
households to schools or industrial installations, are the most common type of
infrastructure and the basis for human settlement. In addition, network
infrastructure is crucial for the functioning of today's economy and society, notably
infrastructure for energy (e.g. grids, power stations, pipelines), transport (fixed
assets such as roads, railways or airports), ICT (e.g. data cables) and water
(e.g. water supply pipelines, reservoirs, waste water treatment facilities).
They are sets of interconnected networks which facilitate the production and
distribution of goods and economic services, and form the basis for the
provision of basic social services.

Overall,
there are many interdependencies between the infrastructure sectors and failure
in one area can quickly lead to cascade failure. Energy, water, ICT and
transport infrastructure are also often co-located (e.g. power cables laid
below roads and beside communications cables, adjacent to water and gas mains
and above sewers), especially in urban areas. Extreme weather events could
conceivably affect (or disrupt) all of these infrastructure assets
simultaneously[3],

All types of infrastructure have an
enormous value, both directly as a capital asset and indirectly as an essential
element contributing to a productive economy.[4]
However, costs for non-operation or disruption can differ significantly,
depending on the type and sector: While damage to a local public building
usually only has local economic impact, damage to energy transmission
infrastructure can potentially have wider, macro-economic consequences.

1.3.        Risks
and opportunities

Climate change already has
far-reaching impacts on infrastructure and can put their operation and
reliability partially at risk. This trend
is likely to accelerate in the coming decades (see chapter 2). Main threats
to infrastructure assets include damage or destruction caused by extreme
weather events, which climate change may exacerbate; coastal flooding and
inundation from sea level rise; changes in patterns of water availability; and
effects of higher temperature on operating costs, including effects in
temperate and/or permafrost. Some infrastructure may not be affected directly
but be unable to operate if physical access or services to it (such as
electricity and ICT) are disrupted.

The need for infrastructure
investment over the coming decades is enormous (see chapter 5.2). Climate
change does not alter this need but may increase its costs[5]. Climate change may also affect
where infrastructure is built and how it is designed and operated. There will
also be a need for additional infrastructure, dedicated to climate protection,
such as improved sea defences and flood protection, interconnections in water
supply, as well as retro-fitting to improve resilience of existing
infrastructure.

Making infrastructure
resilient to climate change is an important and early adaptation challenge.
This might not come cheap as infrastructure adaptation usually dominates
adaptation cost estimates.[6]
It also requires sophisticated decision-making, given how little we know about
future climate effects at the regional level.[7]
However, starting this process is important, including at the earliest planning
stages. Infrastructure assets are long-lived and have the potential to lock in
development patterns for a long time.[8]

Changes towards more
climate resilient infrastructure investments present some specific challenges.
First, they often have higher up-front capital costs, even if their climate
resilience makes them more profitable over the lifetime of the infrastructure. Second,
investors may calculate an additional risk premium for
projects to develop climate resilient infrastructure, due to the uncertainty
surrounding the implications of climate change in the long run. Third,
ecosystems provide some critical services (for example, well-functioning
natural habitats on coasts or in floodplains protect against extreme weather
events). Investing in protecting these habitats can be less costly than
developing or adapting man-made infrastructure, but market structures or
incentives are not yet sufficiently implemented to make such investments always
profitable.

However, addressing
climate risks in investment and operating/management decisions can not only
mean avoiding costs at a later state but also opening up new economic
opportunities.[9]
Adapting infrastructure to climate change impacts presents opportunities if
early action is taken and expertise developed. This includes new skills and
technologies as well as additional adaptation capacity to enable infrastructure
to be adapted such as new engineering practices or IT-based technology. What is
a risk for city planners, utility firms, businesses and homes, can in turn be
an opportunity for those who build and maintain infrastructure. This know-how
and expertise can also be an important asset in global competition and be
exported to other parts of the world.

From a territorial perspective, the urban
dimension of infrastructure adaptation is crucial. As a large share of important,
often closely inter-linked infrastructure is concentrated in Europe's cities, urban
adaptation has to deal with a large number of multiple, cross-sectorial issues
in infrastructure development and operation.

2.           Impacts of climate change on infrastructure

The severity of climate
impacts on infrastructures will vary across the EU according to individual
locations and their geophysical risk exposure, the existing adaptive capacity
and resilience, and the level of regional economic development. Long- and
medium term climatic trends (e.g. increasing average temperatures, modified
rainfall patterns) and an inherently rising frequency of extreme weather events
impact differently from site to site. Climate impacts not only show regional
and seasonal patterns (e.g. North/South, winter/summer) but also differ between
territorial settings (e.g. urban/rural/coastal). Therefore, adapting
infrastructure usually requires a complex, site-based analysis of different
trends and impact patterns.

2.1.        Trends and patterns

The impacts of
climate change vary considerably across Europe, in terms of the regions, territories and sectors affected.[10] The warming of the earth has far-reaching consequences on several
climatic parameters, triggering changes in precipitation and temperature patterns,
changes in intensity and frequency of extreme weather events (e.g. extreme
precipitation, heat waves, cold spells, storms), sea level rise and changing
wind patterns.[11] All of these climate phenomena may impact on the stability and the
functioning of infrastructure. Therefore they also need to be considered when
making climate-resilient investment decisions for new infrastructure and
upgrades of existing infrastructure.

The location of an infrastructure, together
with the adaptive capacity of local businesses, governments and communities,
usually determines an asset's climate sensitivity and vulnerability. This
vulnerability to various climate parameters is also strongly sector-specific
and closely linked to the technology used for construction and operation (e.g.
less precipitation causing decreased efficiency of hydro-power plants).

Climate change will also affect the
environmental and social systems around infrastructure assets and their
interactions with these systems. For instance, reductions in rainfall may
affect the availability and quality of water resources on which industrial
assets depend. At the same time, farmers may find they need to irrigate crops
for the first time in response to rising temperatures and lower rainfall. Such
changes may create competition and could potentially lead to conflict. This
highlights the importance of thinking in an integrated, cross-sectoral way to
consider climate risks and resilience[12].

2.2.        Territorial aspects

Europe is
characterised by a great territorial diversity. Questions related to the
resilience of infrastructure are usually closely linked to (local or regional)
territorial conditions. In addition to global trends and different seasonal and
regional patterns, territorial aspects form an additional layer which
determines the vulnerability of a given location. This site can be part of
different territorial categories at the same time (e.g. urban area in a coastal
zone) – a factor which can emphasise certain impacts (e.g. heat island effect
combined with heat waves in cities) or lead to deviations from more general
regional patterns (vulnerability "hotspots", e.g. high risk-exposure
of mountainous villages in an otherwise low-risk region).

Coastal cities and adaptive responses: the example of Hamburg (D) Recent sea level rise projections taking into account the impact of artic ice melt suggest that increases of between 0.9 to 1.6 metres above the 1990 level could be expected by 2100. These increased sea levels have the potential to interact with storm surges to present a serious flood threat to Europe’s coastal area, where large cities and urban centres are located. Cities along the coast of the Netherlands, Germany, Belgium and northern Italy are most likely to be significantly affected. As a response, and already facing increasingly significant impacts of climate change, many cities on (or near) the coast are acknowledging their need to adapt. The metropolitian region of Hamburg, for instance, has put climate adaptation already into action. Its geographical position makes it especially prone to storm floods and risk of inundation. Moreover sea level rise is affecting the level of the river Elbe and its tidal system. In 2007 Hamburg experienced flooding due to storms and high tides on the German coast, raising the river Elbe by 3.5 metres. Hamburg's Climate Action Plan for 2007-2012 therefore included a series of concrete adaptation measures, such as coastal flood defences, water management, inland flood protection, as well as adaptive measures for waterways, urban and landscape planning, transport infrastructure. Adaptation considerations were also integrated in the urban planning of the 'HafenCity' – a newly developed, inner-city district in the port area.

The following sections explain four categories of
territories in which climate impacts on infrastructure is expected to be most
significant.

2.2.1.     Cities
and urban areas

Cities are sensitive to
many impacts, especially extreme weather events. Due to
the concentration of population, physcial assets, and socio-economic
activities, cities play an essential role in providing infrastructure to
citizens. Many climate impacts are acceleratated or accentuated in built up
areas which can create unique microclimates in terms of temperatures, wind and
precipitation (e.g. urban heat island effect).

Challenges to operating
infrastructure under changing climate conditions include a.o. coping with
potentially higher operating temperatures during summer (with an increasing
frequency and intensity of heat waves), protecting built environments against
floods or ensuring water and energy supply during consumption peaks (e.g.
cooling in "hotter" summers, heating in "colder" winters).
City dwellers may also be particularly susceptible to vulnerabilities in ageing
infrastructure. This includes drainage and sewer systems, flood and storm
protection assets, transportation systems, and energy supply.

Urban sprawl and an
unbroken trend to soil sealing can have additional negative externalities, for
instance a lack of flood areas. In Europe at least 1,000 km2 of land
– more than the size of the city of Berlin – are converted for new
infrastructure annually[13].

With a growing urban
population in Europe, city and regional authorities will play an increasingly
important role in climate change adaptation in the future. Many European cities
have already developed local adaptation strategies, including measures aiming
to ensure the future operation of existing urban infrastructure (e.g. cooling
in metro-systems or trams) or increasing the share of urban green space. For
new infrastructure, examples show that construction codes or planning
legislation (e.g. for new residential zones) partially already incorporate
climate change parameters.[14]

2.2.2.     Coastal
areas

Infrastructure in coastal
areas as well as off-shore installations (e.g. transmission lines, wind
turbines) will be particularly affected by sea level rise (of between 0.18m and
0.58m by 2100),by changes in ocean currents (which could potentially cool the northern
hemisphere by -1.7°C and lead to a significant increase of frost and snow
cover) and by coastal erosion (which will be accelerated by sea level rise and
an increase frequency of heavy storms). Sea level rise will exacerbate coastal
inundation and magnify the effect of storm surges, thus threatening vital
infrastructure, settlements and facilities that support the livelihoods of
local communities.

Historically, much
attention has focused on using hard structures such as seawalls to protect
infrastructures and coastlines susceptible to sea level rise. More recently,
integrated coastal zone management and ecosystem-based adaptation, including
coastal forest rehabilitation or beach dune restoration, have proven to be more
suitable frameworks in this respect[15].

A comprehensive analysis of climate impacts
in coastal areas and potential further action is discussed in the Commission
Staff Working Paper "Climate change adaptation: marine and coastal
issues".

2.2.3.     Mountainous
regions

The functioning of infrastructure in
mountainous areas can be increasingly threatened by an increased frequency and
intensity of natural hazards (such as landslides, rock falls or floods). Most
phenomena are linked to the increasing ambient temperature which leads to a
loss of glacier mass
and consequent
morphological transformations, reduced snow cover,
thawing of permafrost and changing precipitation patterns. Climate change is
projected to result in later seasonal snow, less snow coverage, earlier wet
snow avalanches, and generally shorter snow seasons.

Apart from the physical destruction of (or
damage to) infrastructure in risk zones, in particular water cycles are
expected to change significantly (e.g. increasing/decreasing water availability
for hydropower generators, depending on local and regional conditions). In
addition, increasing temperatures and decreasing snow cover will affect regionally
economically important winter activities and connected infrastructure (e.g.
installations for artificial snow, ski lifts).

Examples show that especially investing in
natural solutions to protect infrastructure has a large potential. Approximately
780,000 ha (20 per cent) of Austrian forests are classified as ‘protection’
forests ("Bann- und Schutzwälder"), by the Austrian Forest Act.[16] The primary benefits of these
mountainous forests to human society are in particular protection from natural
disasters (such as avalanches, mudslides, rock falls) but their benefits cover
as well biodiversity enhancement, recreation and tourism.

2.2.4.     Outermost regions

Given their remoteness,
insularity, small size and difficult topography and climate, the EU's outermost
regions[17]
are particularly sensitive to the impacts of climate change. Indeed, these
permanent constraints render these regions all the more vulnerable to global
climate challenges. While the deterioration of the shoreline and the increase
of average temperature represents a common challenge, many other phenomena are
linked to specific territorial conditions: Caribbean islands and French Guiana
are expected to be hit by increased dryness, more intense cyclones and sea
level rise, Macaronesian islands will be particularly threatened by changes in
wind and precipitation patterns, and in Réunion rising temperatures will
accentuate water scarcity problems.

The outermost regions'
particular territorial characteristics (such as being islands, mountainous or
coastal locations) and their sensitivity to the impacts of climate change put
additional pressure on infrastructure and urban settlements. Flooding, sea-level
rise, drought, heat waves or temperature rise will impact spatial planning and
development in the OR and all have implications for infrastructure resilience.

Adapting infrastructure: A challenge for the EU's outermost regions As most of the infrastructure (i.e. energy, water supply, transport and communications) is concentrated along the coastal zones, climate impacts such as coastal erosion, loss of available land area due to sea level rise and increased frequency of extreme weather events such as storms, typhoons and hurricanes pose significant challenges. For example, of the 300 km coastline of French Guiana 45% is currently subject to erosion, 14% in Guadeloupe. Due to their small size economies, remoteness and often fragmented nature of their territories (given some outermost regions are archipelagos), disruption to transportation and communication networks could have a severe impact on vital economic sectors, particularly the food-supply and tourism sectors. For example, in the Canary Islands, tourist infrastructure has spilled over into the coastal areas, with more than 10 million visitors a year and a high population density (200 inhabitants/ km2 on average). Furthermore, impacts on energy production (particularly hydroelectricity), distribution and supply facilities are likely to cause significant energy security concerns. Freshwater availability in most outermost regions is dependent upon storage of rainwater or upon seawater desalination facilities, which may respectively be at high risk due to changes in precipitation patterns and to their coastal location. Thus, adaptation measures to increase the resilience of infrastructure have become vital for these regions. Current policy responses are focusing on the enhancement of technical and scientific knowledge, on the review of building and construction standards, on sustainable urban planning solutions and on the development of renewable energy sources that will increase energy self-sufficiency.

2.3.        Sector-specific impacts

2.3.1.     Transport
infrastructure

The infrastructure of
all four transport modes are subject to climatic pressures and are subject to
corresponding adaptation policies: rail (railways), road (roads and highways in
general and specific cases of coastal and mountain roads), shipping (inland and
ocean shipping, ports) and aviation (airports).

Rising temperatures and
sea levels as well as an increasing frequency and intensity of extreme weather
events (e.g. storms, heat waves, flooding) already have significant impact on
the functioning of transport infrastructure in the EU.[18] However, climate change
affects not only transport infrastructure, but also the distribution of
transportation and traffic flows, e.g. as a result of changing tourism
patterns. This can consequently alter infrastructure needs. Furthermore, the
vulnerability of the transport sector is also influenced by human behaviour and
societal changes. As different transport modes are differently affected by
climate change, the kind of mobility chosen by individuals is influencing the
vulnerability of the whole sector.

The consequences of
climate change are both negative and positive for transport infrastructure such
as for rail, road, shipping and aviation, but will differ from region to
region. In particular, the projected increase in the frequency and intensity of
extreme weather events such as heavy rain (e.g. causing floods), heavy
snowfall, extreme heat and cold, drought and reduced visibility can enhance
negative impacts on the transport infrastructure, causing injuries and damages
as well as economic losses, transport disruptions and delays. For road
transport infrastructure, weather stresses represent from 30% to 50% of current
road maintenance costs in Europe (8 to 13 billion € p.a.). About 10% of these
costs (~0.9 billion € p.a.) are associated with extreme weather events alone,
in which extreme heavy rainfalls & floods events represent the first
contribution.[19]
However, also some beneficial impacts on transport can be expected, such as from
reduced snowfall for most of the European regions in the longer-term.

A detailed assessment
of relevant climate impacts on transport infrastructure is presented in annex
1.

Responding to climate impacts: railways between Copenhagen and Ringsted (DK) [20] Increased precipitation and increased water flow in watercourses can affect the new railway line between Copenhagen and Ringsted. In connection with the project on expanding the track capacity between Copenhagen and Ringsted on Zealand, the Public Transport Authority, which has analysed the track capacity, has carried out a climate change impact assessment for the project. The goal of the impact assessment is to investigate a future rail track’s robustness to climate change over a 100-year operating period. The assessment shows that especially increased precipitation and increased water flow in watercourses can impact on railway constructions, whilst other factors such as increasing temperatures, rising sea levels and rising groundwater will not have a significant impact. Of particular importance is an expected 20% increase in the intensity of rainfall in heavy downpours in the year 2100. In areas where watercourse cross the track, under a bridge or tunnel, climate changes mean there is a risk that water cannot flow quickly enough and thereby build up and risk eroding the railway construction. Therefore a new track between Copenhagen and Ringsted will have a 30 per cent greater capacity for water flow than the norm that is used at present. The Public Transport Authority assesses that the recommendations for adaptation to climate change are robust in relation to the variations in the expected climate changes.

2.3.2.     Energy
infrastructure

Impacts of climate change, such as an
increased frequency of extreme weather events or changing water and air
temperatures have effects on energy transmission, distribution, generation and
demand. Recent studies[21]
 suggest important impacts of climate change on the energy sector and underpin
the need for adaptation, notably in the electricity sector.

The transmission and distribution grids
are increasingly challenged by new seasonal and regional demand patterns as
well as direct physical effects of extreme weather events (e.g. storms or
floods). At the same time, they are also subject to new balancing requirements arising from the integration of significant volumes of electricity
produced from renewable sources (typically sparsely distributed). Despite this
dual challenge, a high degree of reliability needs to be ensured. Due to their comparatively lower physical robustness, older regional
distribution networks are particularly vulnerable to extreme weather events
(e.g. flashovers in rural areas).[22]
 The generation of electrical energy is affected by efficiency decreases
due to climate change (e.g. decreasing availability of cooling water for
electricity generators). However, in some parts of Europe, increased
precipitation or more wind may also lead to new opportunities for hydropower or
wind energy generation. Overall, floods are identified as a particular threat
to electricity generators and related physical assets. Regional and seasonal demand
and consumption patterns will change with an increasing ambient temperature.
Projections suggest a reduction in space-heating in northern Europe and an
increase in demand for cooling in southern Europe.[23] Additionally, extreme weather
periods such as heat waves, cold spells, and droughts will lead to increasingly
significant demand peaks, potentially causing demand-driven overstress of
energy infrastructure. Scientific evidence suggests that regional and seasonal
demand shifts are the most important, climate-induced change to the energy
system.[24]

Table 1: impacts
of changing climate parameters on different energy supplies. Source: European
Commission (2011)

Technology || Δ air temp. || Δ water temp. || Δ precip. || Δ wind speeds || Δ sea level || flood || heat waves || storms

Nuclear || 1 || 2 || || || || 3 || 1 ||

Hydro || || || 2 || || || 3 || || 1

Wind onshore || || || || 1 || || || || 1

Wind offshore || || || || 1 || 3 || || || 1

Biomass || 1 || 2 || || || || 3 || 1 ||

PV || || || || || || || 1 || 1

CSP || || || || || || 1 || || 1

Geothermal || || || || || || 1 || ||

Natural gas || 1 || 2 || || || || 3 || 1 ||

Coal || 1 || 2 || || || || 3 || 1 ||

Oil || 1 || 2 || || || || 3 || 1 ||

Grids || 3 || || || || || 1 || 1 || 3

Note: 3 = severe impact, 2 = medium impact,
1 = small impact. A detailed assessment of relevant climate impacts on energy
infrastructure is presented in annex 2.

2.3.3.     Construction
and buildings

Investments in buildings and other
infrastructure are increasingly put at risk by changing climatic conditions and
related extreme weather events. Due to the long lifespan of many buildings and
other infrastructure and their great economic value, their preparedness and
resilience to future impacts of climate change are critical.

The impact of climate change is particularly pertinent to the
construction industry given the life expectancy of buildings and the fact that
there is a need to adapt the existing built environment, to deal with a climate
that may be significantly different from that in which it evolved. Major
threats to construction and buildings requiring short-term action include
(1) extreme precipitation, which can be expected European wide, e.g.
leading to water intrusion, damage to foundations and basements, destruction of
buildings and infrastructure, overflowing sewers, land- and mud-slides,
flooding, etc.; (2) extreme summer heat events, especially but not only in
South Europe, e.g. leading to material fatigue and accelerated aging, decreased
comfort and potentially severe health implications, high energy use for
cooling, et cetera; (3) exposure of constructions to heavy snowfall;
(4) rising sea levels that increase the risk of flooding. In addition, soil
subsidence risks[25]
are likely to increase, depending on the stability of building structures and
their foundations.

Buildings and infrastructure can be
vulnerable to climate change because of their design (low resistance to storms)
or location (e.g. in flood-prone areas, landslides, avalanches). Flooding is
(after earthquakes) one of the most costly kinds of disasters and this is
mainly due to floods in built-up areas. Many European cities have been built
along a river; and these rivers will respond to extreme rainfall or snowmelt
events with extreme discharges, threatening the cities with floods. There is
also a growing problem with overheating of the built environment being exposed
to rising temperatures and extreme heat, which is not only an issue for the
construction material but also affects the occupant's comfort and health. In
coastal areas, coastal protection (e.g. sea walls) may require increasing
maintenance costs and higher frequency of readjustments.

A detailed assessment of relevant climate
impacts on buildings is presented in annex 3.

3.           Addressing
common challenges

While climate impacts
and adaptation challenges differ from sector to sector, the on-going adaptation
process also includes several common elements which will be highlighted in the
following sector.

Adapting infrastructure
to a changing climate needs to be considered in two ways. First, when constructing
new infrastructure, climate resilience can be ensured by locating,
designing and operating an asset with the current and future climate in mind. This
is particularly important in the case of large infrastructure which usually has
a lifespan of at least 20 years and investment decisions therefore influence
future generations' well-being. Secondly, existing infrastructure can be
made more climate-resilient by retro-fitting and/or ensuring that maintenance
regimes incorporate resilience to the impacts of climate change over an asset’s
lifetime.

Design thresholds which are built into infrastructure project designs may be breached
more frequently in a future changing climate. A changing climate may result in
threshold failures once considered exceptional but acceptable, becoming
unexceptional (i.e. normal) and unacceptable. Infrastructure may have to
function within tighter margins between “normal” operation and critical
thresholds. This may manifest itself in decreased efficiency of equipment and
provide less margin for error before drastic management measures (such as
reduced operation or throughput) need to be implemented.

Figure 1: The
relationship between coping range, critical threshold, vulnerability, and a
climate-related success criterion for a project. [Source: Willows and Connell
(2003) modified].

Infrastructure is generally constructed in
a manner that is resilient to the weather conditions of the past. Climate
change makes it increasingly important to enhance and disseminate knowledge on
the present and future climatic conditions.

Examples from the energy sector show that
different types of infrastructure are built, maintained and operated following
well proven construction codes, regulations and good practices in operating
them. They take due account of siting characteristics, among which
weather extremes (e.g. temperature, rainfall, water supply or wind) and other
inputs (geology, earthquake, use of land etc...) are fixed based on historical
records plus an engineering "safety" margin. New energy
infrastructure projects integrate those factors in their feasibility analysis,
both from an economic and a safety point of view. Variations in any of the
above parameters due to climate change result in the need to perform scheduled
revisions of the construction (when project is progressing) or operation
specifications, in order to ensure that the operation and integrity of the
infrastructure remain within the required safety margins at all time.

To achieve sector- and location specific
climate resilience, there is thus a need for a thorough and coherent assessment
of local climate impacts – based on historical records, but also including
projections on future climatic conditions. Only detailed local assessments can
provide greater confidence in understanding current and future climate
variability and its impacts on installations. Subsequently, making climate
change assessments and system-wide vulnerability checks for interconnected
installations[26],
developing long-term (investment) strategies and incorporating climate issues
into planning and maintenance procedures can not only ensure the timely
adaptation of installations but also avoid future negative externalities.

Land-use policies and spatial planning play a central role when developing new infrastructure. Overall, the
climate resilience of infrastructure is not limited to its outfit but starts
with sound spatial planning and the right choice for the site and necessary
compensation measures.[27]
The appraisal of options against the background of climate change and
its impacts on a given site is crucial. As a result of local impact
assessments, installations might be located differently, not necessarily
causing any additional costs for the investor.

In order to enhance climate resilience for
a given building or physical asset, also green infrastructure[28] or protective elements can
make important contributions. In rural areas, multi-functional resilient
ecosystems offer cost-effective options when integrated into land planning,
e.g. using floodplain forests acting as a "safety valve" to store
water and reduce the risk of flooding instead of 'grey' infrastructure. Such
green infrastructure solutions are often cheaper in one-off and maintenance
costs than purely technical protection solutions such as building dams and
floodplain reservoirs. In cities and built-up areas, green roofs and walls
through shading and evaporation, help to avoid the heat island effect, filter
the air and can also contribute to the energy efficiency of buildings. Thus
they also positively impact human health and contribute to emission reduction.

While engineering measures (such as
additional cooling circuits for power plants or design standards for
distribution poles) can significantly increase the robustness and reliability
of installations, also non-engineering measures should be considered.
They may include more robust operational and maintenance procedures, better
demand management and forecasting or early-warning systems.

Enhancing the resilience of buildings and
other infrastructure to the adverse impacts of climate change should take place
within an integrated and synergistic approach giving due consideration
to other relevant issues (such as embodied and operating energy, insulation,
air conditioning, on-site generation of renewable energy, water efficiency,
materials efficiency, waste and toxics reduction and/or minimising urban
sprawl). Where relevant, the development and revision of appropriate
construction and maintenance standards for the construction of different
types of infrastructure should be envisaged (see chapter 5.1.1).

Greening of roofs and facades in Austrian cities (AT) Climate change will increase the urban heat island effect in the years to come. This meteorological phenomenon is linked to high density areas and characterized by high annual average air and surface temperatures, little cooling occurring at night, air pollution, an increased vegetation period and changing wind and rainfall patterns. Strategies to improve the urban climate include reducing the heat stored in cities, stimulating evaporation and storing rainwater for lengthy periods. Greening of the roofs and facades of buildings helps ameliorating the urban climate, while also being a means of adapting to climate change. Green roofs and green facades smooth temperatures or humidity changes, naturally cooling down temperatures during the summer and keeping warmth in winter. They also isolate from noise, provide clean and oxygenated air, store humidity and protect from extreme weather events. They are a natural habitat for fauna and flora, have a positive impact on the local microclimate and are actively contributing to the conservation of the environment and nature and to reducing operational costs in the long run. To promote the greening of roofs and facades, many Austrian regional and local governments provide financial incentives and practical guidance on how to make Austria's cities greener – and buildings more climate resilient.

Additionally, guidelines for project managers in the field of infrastructure
planning and operation can support adaptation processes. It may also be
relevant to expand on the “climate proofing” and not only consider the
resilience to the adverse impacts of climate change but also minimise the
emission of greenhouse gases over the lifespan of the physical assets in
question. The cost-benefit analysis usually applied to transport infrastructure
projects needs to give due attention to the impacts of climate change including
extreme weather events, climate proofing, and the range of relevant options.

Developing and managing infrastructure
usually involves a wide range of public and private actors. Therein,
public authorities at European, national, regional and local levels play a
pivotal role not only in financing, but also in promoting climate resilient
infrastructure by providing appropriate policy and regulatory frameworks,
information and expertise. However, it is also action by others – investors,
owner, operators, insurers and engineering/construction businesses[29] – which will determine the
success and effectiveness climate risks management and other adaptation action.
Considering for instance the current European energy market, the private
sector, notably utility and electricity companies as well as transmission and
distribution system operators, will play a central role in the adaptation
process. Close cooperation between different levels of government and between
the private and public sectors is therefore essential.

Electricity grid adaptation to climate change in Sweden and Norway Scientific research suggests that national regulations and culture, company size and experience with weather incidents have far-reaching influence on adaptation to climate change in electricity distribution companies.  A study[30] on four electricity grid companies in Norway and Sweden – two countries with similar climate conditions, but business environments – underlines this aspect. Of the four companies investigated in this study, investments by the two Norwegian companies were found to be strongly based on economic efficiency. This approach reflects the influence of the national regulatory framework that is efficiency-focused, in addition to an organisational culture where economic efficiency has a higher profile than other issues, such as the robustness of the system and the grid. In contrast, the two companies in Sweden focused on investments that have more of a balance between increasing the robustness of the grid and economic efficiency, reflecting the national regulatory framework. The Swedish companies have consequently been able to invest more in adaptation measures than the Norwegian companies. A major storm (Gudrun) in Sweden in 2005 that caused wide-spread damage has influenced the views on climate change by Swedish electricity companies. Such an extreme weather event exposed the vulnerability of the grid to future severe storms. One consequence has been for the larger Swedish company to speed up investment in underground cables to replace overhead transmission lines. Such investments are also seen as economically feasible in the long term. In Norway, the companies have experienced an increased frequency of heavy snow. Whilst the companies regard the replacement of overhead lines with underground cables as being too costly, the larger Norwegian company has adapted by increasing maintenance of the system, in addition to investing in insulated overland lines which are stronger and better able to withstand the weight of the snow. The study also highlights that the larger companies have more resources to plan for adaptive measures to cope with future climate change than the smaller companies. Local knowledge in small companies does not provide enough expertise for adapting to future vulnerabilities.

Awareness-raising and exchanges amongst these key stakeholders[31]
will be vital to achieve a full penetration of the sector regarding its climate
vulnerability and adaptive capacity.  Overall, the stakeholders' adaptive
capacity and knowledge will be decisive to achieve the right results.

In this respect, the development of professional
skills and the exchange of experience, both for engineering and
non-engineering adaption measures appear as vital. This area also represents a
major economic opportunity, also to export know-how to outside the EU. In
particular the engineering and construction sectors are challenged to develop
further their ability to embrace probabilistic methods and flexible solutions,
and to deal with complex risk scenarios. Adaptation, mitigation measures, and
the needs of an evolving population and economy all make demands on engineering
capacity.[32]

4.           EU
policy mainstreaming

Within its competences
and building on the 2009 white paper, the European Union is engaged in
mainstreaming climate change adaptation in various EU policies and financial
instruments including the European Transport Policy, the Connecting Europe
Facility or EU cohesion policy. As outlined in the communication "...",
these efforts will continue throughout the implementation period of the
strategy. The following section provides an overview of the current EU policy
approach and the uptake of climate change adaptation in EU legislation.

The transport sector
fulfils crucial economic and social functions and is highly depending on
the environmental situation. Investment in transport infrastructure is
increasingly put at risk by changing climatic conditions and related extreme
weather events. Due to the long life span of the majority of transport
infrastructure and their great economic value, their preparedness and
resilience to future impacts of climate change are critical.

The proposal for the new TEN-T Guidelines[33] includes climate resilience,
in particular under article 41: during infrastructure planning due
consideration shall be given to risk assessments and adaptation measures
adequately improving the resilience to climate change. Additionally, where
appropriate, due consideration should be given to the resilience of
infrastructure to natural or man-made disasters.

TEN-T projects,
co-financed under the Connecting Europe Facility, are expected to contribute to
promoting the transition to a climate- and disaster-resilient infrastructure. All
transport modes are eligible for funding. Co-financing rates may be increased
by up to 10 percentage points for actions enhancing climate resilience.[34]

Next to
adaptation to climate change, the trans-European transport (TEN-T) network
should provide the basis for the large-scale deployment of new technologies and
innovation, which, for example, can help enhance the overall efficiency of the
European transport sector and curb its carbon footprint. This will contribute
towards the Europe 2020 strategy and the Transport White Paper's target of a
60% cut in greenhouse gas emissions by 2050 (based on 1990 levels) and at the
same time contribute to the objective of increasing fuel security for the
Union.

With its policies and within its
competences, the European Union actively contributes to adapting energy
infrastructure to climate change. The energy sector is of vital importance
for Europe's economic performance. Climate change has consequences for the
sector's stability, sustainability and resilience. Both mitigation and
adaptation are policy responses which need to be taken on board. Energy
infrastructures, from overhead lines and pipelines to power stations, play a
critical role for supplying European citizens and businesses with energy. Significant
investment, both from the private and the public sector, will be needed in the
next decades to adapt some of the sector's physical assets to a changing
climate.

The 2008 Commission Green
Paper on a secure, sustainable and competitive energy network stated that
"the implications of climate change for Europe's energy networks, for
example the positioning of plants, power lines and pipelines, need to be taken
into account."[35]

The new guidelines for
trans-European energy infrastructure (TEN-E Guidelines)[36] therefore also include "climate
resilience" as a parameter for the energy system-wide
cost-benefit-analysis for projects of common interest in electricity transmission
and storage and in gas (Annex 5). The objective of preventing and increasing
the Union's energy infrastructure to natural or man-made disasters, adverse
effects of climate change and threats to its security are also highlighted in
recital 8.

Future EU investment
under the TEN-E policy, in particular through the Connecting Europe Facility (2014-2020)[37], is expected to contribute to enhancing
the system's resilience and to tackling part of the investment needs for the
adaptation of electricity grids.

Overall, electricity
systems have to become more interconnected and flexible, and new infrastructure
development and reinforcement will be necessary. In particular, the deployment
of smart grid technologies[38] will play a part in managing the variability
of demand and supply. The 2012 Ten Year Network Development Plan[39] of the European Network of
Transmission System Operators identifies an overall investment need in
trans-European transmission infrastructure of about 100 billion EUR, addressing
both mitigation and adaptation objectives. [40]
While adapting energy infrastructure to cope with changing temperatures and to
withstand extreme weather events is crucial to guarantee the energy systems
(current and future) reliability, mitigation measures (e.g. energy efficiency
in buildings) can make important contributions to deal with energy demand peaks
and/or system overstress.

Buildings,
from private households to hospitals or industrial installations, are the most
common type of infrastructure which is also relevant to other infrastructure
sectors (e.g. railway stations, airport buildings). Given the important role of
the private sector, adaptive action will – in most cases – be taken by private
owners. National, regional and local bodies play a role in both adapting their
physical assets to climate change and in considering climate adaptation in
legal planning frameworks and permission granting procedures. The European
level can however play also an important role in stipulating the uptake of
climate considerations in planning and construction: firstly, by ensuring the
uptake of climate resilience in EU infrastructure investment policies, and
secondly, by promoting new construction standards.

5.           Instruments

5.1.        EU
instruments for improved climate resilience

Improving the climate resilience of
existing and future infrastructure from the impact of climate change is predominantly
a Member State responsibility. Both, the private and the public sector play an
essential role. The EU nevertheless has an important role in providing several instruments
which can help improving a project's adaptive response and resilience. This may
apply during design and planning but also in the course of retrofitting.

Most infrastructure sectors are strongly regulated,
which means that policies governing these sectors play an important role and
might need to be revised in the light of current and future climate changes.
One of the most important type of instrument used to regulate infrastructure
sectors are standards at EU level, which often include references to (directly
or indirectly) weather/climate related pressures. Furthermore, revised guidelines
for the Environmental Impact Assessment and the Strategic Environment Assessment
as well as the Floods directive contribute to climate resilient investment. Additionally,
guidelines for climate-proofing infrastructure projects can support this process.

5.1.1.     Technical
Standards

When revising existing or building new
structures, technical standards are used in every phase during the lifetime
cycle of an infrastructure. Standards can apply during the planning phase (e.g.
risk assessments, environmental standards), the design phase (e.g. Eurocodes),
the construction phase (European and national product standards, implementation
standards) and the maintenance phase (e.g. environmental standards, safety
standards). Thus standards have an important impact on the resilience of
products, processes and construction. In this process, both
European/international standards as well national or sector-specific
requirements play a central role.

At European level, Eurocodes can be
a suitable instrument for addressing climate resilience in different
infrastructure sectors. Eurocodes are a set of European Standards (EN) for the structural
design of buildings and civil engineering works, produced by the European
Committee for Standardisation (CEN) to be used in the European Union. They
provide for compliance with the requirements for mechanical strength, stability
and safety as basis for design and engineering contract specifications. The
Eurocodes embody national experience and research output together with the
expertise of CEN Technical Committee 250 (CEN/TC250) and of International
Technical and Scientific Organisations and represent a world-class standard for
structural design. The Commission has asked CEN to prepare a proposal for how
to incorporate climate change and extreme weather events in the Eurocodes.

Based on ISO Guide 64, CEN has developed
and adopted CEN Guide 4 "Guide for the inclusion of environmental
aspects in product standards", which aims to provide a helpful tool for
people involved in standardization who are not necessarily environmental
experts to take the potential environmental aspects related to their standards
into account. Following discussions with the Commission, CEN is currently
considering how to amend Guide 4 to take into account climate change in the
development and revision of standards.

Furthermore, the Commission is currently in
dialogue with the three European standardisation organisations (CEN, CENELEC
and ETSI) to prepare a programming and standardisation mandate. Its main
objective is to contribute to building and maintaining a more climate resilient
infrastructure in three selected sectors (transport, energy and buildings/construction).
The scope of the mandate is both to identify and prioritise all standards relevant
for climate change adaptation and to revise "priority standards"
accordingly. Additionally, if deemed necessary during this exercise, new
relevant standards could be developed. The mandate also includes the
development of tools (i.e. guidance or other type of documents) that will
ensure that adaptation to climate change is taken into account in a systematic
way when new European standards are developed. The Commission intends to
receive first results by 2015.

5.1.2.     Environmental
Impact Assessment and Strategic Environment Assessment

The Environmental Impact Assessment (EIA)
and the Strategic Environmental Assessment (SEA) can be appropriate instruments
to mainstream adaptation, helping to improve the climate resilience of
infrastructure.

The Environmental Impact Assessment
(EIA) is a procedural and systematic tool that is in
principle well suited to incorporate considerations of climate change impacts
and adaptation within existing modalities for project design, approval, and
implementation.

The EIA Directive
requires that environmental impact assessments shall identify, describe and
assess the direct and indirect effects of a project on the human beings, fauna
and flora, soil, water, air, climate, the landscape, material assets and
cultural heritage and the interactions between these factors (Article 3). 
The Directive is currently under revision[41], proposing new, clearer
amendments towards addressing new challenges, i.e. biodiversity, climate
change, disaster risks and availability of natural resources throughout the whole
EIA process... In addition, a new “Practical Guidance for Integrating Climate
Change and Biodiversity into Environmental Impact Assessment (EIA) Procedures”
is under way, aiming at supporting EU Member States, its administration, public
and private authorities and planning bodies.

The Strategic Environment Assessment
(SEA) can also serve as an effective tool for climate change adaptation, especially
by introducing climate change considerations into development and planning
processes. The Intergovernmental Panel on Climate Change (IPCC) concluded that consideration of climate
change impacts at the planning stage is key to boosting adaptive capacity: “One
way of increasing adaptive capacity is by introducing the consideration of
climate change impacts in development planning, for example, by including
adaptation measures in land-use planning and infrastructure design.”[42]

The SEA provides a framework for assessing
and managing a broad range of environmental risks which may contribute to the
integration (or “mainstreaming”) of climate change considerations into plans
and programmes (P/Ps) that fall into the scope of the SEA Directive[43]. The integration of climate
change into strategic planning through the application of SEA should lead to
better informed, evidence-based PPs that are more sustainable in the context of
a changing climate, and more capable of delivering progress on human
development.

As evidence for and awareness of the risks
associated with climate change and its impacts grows, plans and programmes
subject to SEA often need to incorporate considerations of climate change.
However, experience and empirical evidence on the inclusion of climate change
adaptation considerations in P/Ps through SEA is not yet fully developed. This
is partly linked to the fact that the notion of climate change adaptation in
planning processes is relatively recent. Moreover, the primary focus of SEAs so
far has been to evaluate the impact of a P/P on the environment rather than the
impact of environmental change on a P/P. However, additional guidance for
integrating climate change and biodiversity in SEA is under way, also providing
a clearer picture of how to target climate change adaptation in the context of
the Strategic Environmental Assessment (SEA) Directive.

The early assessment of climate resilience
of proposed projects could also be advised in the context of the intended streamlining
of environmental assessment procedures under the new TEN-E Guidelines, with
a view to achieving faster, better and more sustainable permitting of energy
infrastructure projects of common interest.

5.1.3.     Framework for the assessment
and management of flood risks

Floods can have major negative impacts on
infrastructure with damages to human health, the environment, cultural heritage
and economic activity. Infrastructure therefore needs to be designed to
withstand potential flooding, also taking into account the potential impact of
climate change on the frequency and intensity of floods. In the design of flood defense infrastructure, changing flood intensities and patterns
need to be considered.

The European Union's Floods Directive
(2007/60/EC) is an existing legal instrument which establishes a framework for
the assessing and managing flood risks. It aims at reducing adverse consequences
for floods and calls for adequate information tools. The Directive requires the
establishment of flood hazard maps, flood risk maps and flood risk management
plans.

From the end of 2013, flood hazard and risk
maps shall be made publically available for the following scenarios:

a) floods with low probability, or extreme
event scenarios,

b) floods with a medium probability (likely
return period ≥ 100 years),

c) floods with a high probability.

These flood risk maps shall display the
flood extent, the water depths and the water flow. They are helping to identify
which already existing infrastructure is under risk or which infrastructure
might be at risk if it would be built within an area of potential significant
flood risk. The maps can serve as a valuable tool for identifying current and
future flood risks and thus support investment decisions and spatial planning.

The Directive also asks Member States to
develop cross-sectorial flood risk management plans which include measures on
prevention, protection and preparedness. They are based on existing land-use
policies, planning processes, engineering and non-engineering options and
involve both public and private actors. Regular updates of maps and plans
(every six years) will enable authorities to base their scenarios on the latest
findings of climate change research.

5.1.4.     Climate “proofing” of infrastructure

An assessment of
an infrastructure 's risk-exposure and vulnerability to climate change impacts
is vital to guarantee its long-term sustainability. Accordingly, for some EU
policy areas, climate resilience has already been taken up as a parameter in
obligatory cost-benefit analyses during the the project development phase.[44] Evidence[45] also suggests however, that there is a certain lack of awareness of
project promoters for climate issues and insufficient knowlegde on how to
conduct the climate resilience checks for projects, especially private
sector-driven projects.

To support
project managers to make their physical assets more climate resilient, the
Commission will publish, as part of the EU Adaptation Strategy package, "Guidelines
for project managers: Making vulnerable investment climate resilient"[46]. They include a methodology and step-by-step guidance to
systematically assess the climate resilience of infrastructure projects and
improve their sustainability and liability in changing climate conditions. The
guidelines are intended to complement existing project appraisal and
development procedures but not to replace them.

Such
climate proofing can be expected to increase costs for infrastructure projects.
A World Bank study[47] found that the net cost of adapting infrastructure
to climate change is no more than 1-2% of the total cost of providing that
infrastructure. However, at the same time, climate resilience may decrease
costs over a longer period as it helps preventing damages to and interruptions
of infrastructures. Overall, the cost of adaptation appears small in relation
to other factors that may influence the future costs of infrastructure.

The Commission
strongly encourages the use of the guidelines, both in EU-funded projects and more
widely. They sit within the evolving policy context on adaptation in the
Commission, which is seeing climate resilience being incorporated into a number
of policy areas and financing instruments of relevance to asset and
infrastructure.

Given the important
role of EU-funded infrastructure projects in Europe's infrastructure
investment, a coherent climate proofing of EU-funded infrastucture projects[48] (e.g. in the cost-benefit analysis or environmental impact
assessment) could not only help in ensuring greater sustainability of action
but also in promoting climate change adaptation as a EU policy priority.
'Leading by good example' could also trigger important spill-overs to project
development approaches for other public and private infrastructure projects.

Examples of European financial institutions addressing climate risk and adaptation in project appraisal and development[49] European Investment Bank (EIB) have recently developed a number of sector strategies which include addressing climate change adaptation. The EIB will only finance projects that fulfil the requirements described in their Environmental and Social Statement and Handbook. This includes projects applying cost effective, appropriate adaptation measures where there is a risk of significant adverse impacts from climate change and increased frequency of extreme weather events. The EIB also actively promote adaptation projects such as water resource management. European Bank for Reconstruction and Development (EBRD) undertook a project to develop a methodology for understanding the risks posed by climate change and impacts on the bank’s operations. This is helping climate resilience to be included in investment projects where appropriate. The project developed guidance and practical tools to integrate climate risk assessment and adaptation into EBRD’s project cycle. EBRD is also participating in the Pilot Programme for Climate Resilience (PPCR), which is pioneering pro-adaptation technical assistance and investment projects. KfW Entwicklungsbank’s projects undergo a systematic two step climate change assessment to ensure potential impacts are managed and opportunities are capitalised. The first step is an initial assessment to assess risks of anticipated climate change and opportunities for additional mitigation measures. If significant climate change risks or mitigation potentials are identified, a more detailed second stage is undertaken. A modification of the project design, the implementation of risk mitigation measures or an additional project phase could result from this in-depth analysis.

5.2.        Financing climate resilient infrastructure

Financing
the adaptation of existing and the climate-resilient construction of new
infrastructure is a major challenge. This investment need cannot be met by traditional
sources of public financing alone. Indeed, public capital investment in
infrastructure has on average declined in OECD countries over the last decades.[50] This is linked to a potentially new role of the
public sector for infrastructure investment. Infrastructure was viewed as a
public good, and most countries’ infrastructures have been built and maintained
with public money. With increasing constraints on public finances, the maintenance
of existing systems and the construction of new facilities are delayed in many
parts of Europe.

This
significant infrastructure investment gap will need to be bridged by both the
public and the private sector, including institutional investors. Public-private partnership structures
(PPP) are emerging as popular models for funding infrastructure investment.
Aside from the simple need for new financing sources, PPPs can deliver
extra-benefits, such as skills brought by the private sector or faster implementation
of projects.

Failure
to make significant progress towards bridging the infrastructure gap could
prove costly in terms of slower economic growth and loss of international
competitiveness. Economic infrastructure drives competitiveness and supports
economic growth by increasing private and public sector productivity, reducing
business costs, diversifying means of production and creating jobs.[51]

The
following section will focus on three aspects which should deserve particular
attention in the on-going debate on climate adaptation financing:

1. 
the EU's contribution to
financing climate-resilient infrastructure investment;

2. 
private-sector
infrastructure investment; and

3. 
the role of institutional
investors, such as pension funds and insurance companies.

5.2.1.     EU financing

The European
Union is a major investor in public infrastructure projects. European,
investment-based development policies such as EU cohesion policy, TEN-T and
TEN-E, help overcoming gaps in infrastructure needs, especially in Convergence
regions in order to generate the preconditions for growth and jobs.

The EU primarily
addresses this issue through EU cohesion policy and in particular in
less developed Member States and regions which have a low endowment of basic infrastructure.
The policy aims at creating growth and jobs through delivering Europe 2020 and thereby strengthening social, economic and territorial cohesion in the
EU. For EU cohesion policy, the funds at its disposal
amount to some € 344 billion in the current 2007–2013 period. The largest share
is allocated to the Convergence Objective (€ 212 billion) covering significant
shares in infrastructure investment in the 100 least prosperous NUTS 2 regions.
Planned investment in transport infrastructure alone amounts to some EUR 81.7
billion. In addition, the cohesion fund (€ 70 billion) supports investment in
transport and environmental infrastructure in the 15 Member States with the
lowest levels of national income. Combining different EU sources, it is
estimated that some EUR 400 billion have been invested in the TEN-T network
projects since 1986 – almost a third coming from EU sources, much of it from
the Cohesion Fund. [52] The
TEN-T budget for 2007-2013 amounts to EUR 8 billion.

EU grants for
infrastructure projects are often combined with loans from the European
Investment Bank. The Bank’s targeted lending programmes are structured on
the basis of its public policy objectives of economic and social cohesion,
growth and employment, environmental sustainability and climate action. In 2012,
individual loans for a total of € 23.4 billion (equivalent to 52.3%
of total lending inside the EU) were made for infrastructure (i.a. energy,
transport, water supply). The Bank recognises that adaptation to climate change
is necessary and aims to actively promote climate resilience and adaptation in the
projects it finances.  In 2011 the EIB's lending volume for dedicated adaptation
projects inside the European Union was € 873.56 million.

Overall, the
share of financing provided by the European Union for climate-resilient
infrastructure illustrates a high – and growing – demand for climate
investment.

The European
Union will step up its efforts in financing climate-resilient infrastructures
in the 2014-2020 budgetary period. It is foreseen[53] that a minimum of 20% of the overall 2014-2020 EU budget will go in
climate-related investments. This is expected to have significant impact on
infrastructure in Europe's less developed regions (formerly "converenge
regions"), where most EU funding will be allocated. However, the newly
introduced Connecting Europe Facility will also be available in more developed
regions. The proposed funding plan is intended to speed up long-term
investments in roads, railways, energy grids, pipelines and high-speed
broadband networks. Using a significant, dedicated EU budget, the facility
unites different networking infrastructure policies under one umbrella and is
expected to create additional synergies between different sectors.

EU climate investment in action: the Port of Rotterdam (NL) In 2012, the European Investment Bank has granted a € 900 million loan for a 20% expansion of the Port of Rotterdam. The funds are part of the 'Maasvlakte 2' project and will finance part of the € 3 bn in land reclamation. The port authority will enlarge the port area by 2000 hectares, bring the coastline 3.5 km further in the sea and build a deep-sea container and specialist facilities. Europe's largest port will see important improvements that will benefit inside and outside the European Union by accommodating increasing traffic and economic links. The EIB provides a long-term loan over 30 years for an important project that will improve road and rail tracks, waterways, including 5 km of quayside and 12 km of seawalls, all of which have been designed to adapt to future climate change impacts, such as storms and sea-level rise. Furthermore, environmental aspects are cured, such as including a cycle path, a beach, a railway line, a sea bed protection area reservoir and enlarging the dune area.

5.2.2.     Private-sector investment and business opportunities

A changing
climate represents both a threat to economic activity and physical assets and
an opportunity for new businesses and investment. Considering these risks and
opportunities, the private sector's adaptive practices are two-fold:

First,
companies aim at value protection to ensure the resilience of physical
assets and planning responses to maintain business as usual. Companies are
increasingly expected to demonstrate their long-term resilience, helping shareholders
to understand the risk that climate change presents to their portfolios. Physical
risks to fixed assets and infrastructure, impacts on supply chains, and
shifting patterns in demand for goods and services could potentially also become
material factors in the corporate credit risk assessment of banks.[54] When ensuring a company's business resilience, the protection of
infrastructure plays a central role, both in terms of company buildings and of
other assets ensuring supply chains (e.g. transportation fleets). Therein,
regional events can have global impacts (e.g. the floods in Thailand in 2011 caused significant physical damage and major disruption to supply chains
across the globe).

Secondly,
climate change adaptation offers possibilities for value creation.
Adaptive practices are targeted at devising solutions that contribute to the
ability to pursue new revenue-generating opportunities and help suppliers,
stakeholders, and customers adapt to a changing climate.[55] Innovation
in infrastructure solutions to meet new needs stemming from climate change
effects can be considered as an important driver of future business and growth
in the SME sector – provided that the right mix of skills and expertise is
developed to respond to such demand.

Overall,
the necessary investment in private infrastructure is expected to trigger
additional investment and to create jobs. Finding new solution to better adapt
infrastructure to climate risks and unlocking this potential for value creation
can additionally foster economic growth in Europe. Adaptive business practices
which are strategic, not reactive, can make an important contribution to Europe
2020. [56]

Climate risk awareness of businesses: Carbon Disclosure Project The Carbon Disclosure Project's "Global 500 Climate Change" report (2012)[57] which provides information on adaptation in the world's 500 largest companies shows that increasing incidents of extreme weather events have significant impact on commercial infrastructures. Disrupted business operations and supply chains, caused by droughts in the Russia or floods in the USA, can have global business impacts. In 2012, 81% of reporting companies identified physical risk from climate change, with 37% perceiving these risks as a real and present danger, up from 10% in 2010. 2012 has also seen a 10% increase year-on-year in companies integrating climate change into their business strategies (2012: 78%, 2011: 68%). Overall, climate change hasn’t dropped off the board’s agenda during the economic downturn. In 2012, 96% of the world's largest companies reported that they have board or senior executive oversight of climate change.

5.2.3.     The role of insurance

Insurance plays a central role in handling climate risks related to
infrastructure and physical assets. The 2013
Commission "Green Paper on the prevention and insurance of disasters"
discusses this aspect further and consults the wider public on possible future
legislative action.

Insurance can be considered from three perspectives: as a market, as
an instrument for adaptation, and as an industry and investor. All three
perspectives are important when considering climate change and infrastructure.

Climate change could severely affect the functioning of insurance
markets for infrastructure. The impacts are likely to be in the same areas
where the catastrophe insurance markets already experience difficulties. These
may intensify as a result of climate change. Three main areas are identified
that might be affected by potential impacts: the risk transfer conditions (price/coverage),
the availability[58]
and the demand. It might be expected that climate change will increase the
demand for insurance, due to higher risk. Also, if not addressed, climate
change could lead to insurance becoming less affordable or unaffordable, particularly
for lower income population. The forthcoming Commission Green Paper on the prevention and insurance of disasters will
discuss these aspects more in detail.

Insurance can also be a valuable tool for adaptation. It can
support adaptive practices in three main ways: by helping to manage climate
change risks; by providing incentives for climate risk prevention; and by
disseminating information on climate change risks and risk prevention
measures.  Insurance should be part of strategic
risk management which needs to be observed for existing assets and activities,
as well as new ones. In order to give incentives for risk prevention, insurance
prices should be risk based and adequately adjusted according to risk
prevention efforts taken by customers. Finally, insurance sector organisations
are among the entities which could provide climate change risk related
information to clients, since they are already involved in the business of risk
management.[59]

Together with other institutional investors (such as pension funds
or mutual funds), the insurance sector can also play a role in future
infrastructure investment. With over US$65 trillion in assets held at the
end of 2009 in OECD countries alone, institutional investors could be key
sources of capital, financing long-term, productive activities that support
sustainable growth, such as green energy and infrastructure projects. [60]

Availability of insurance for physical assets As a result of increasing climate risks insurance might become unavailable in certain areas. It is widely accepted that natural events that are less frequent than 1 in 75 years are readily insurable. Swiss Re[61] indicates that for risks with a 100 to 200 years return period (0.5% to 1.0% probability), the risk premium is 3.5% of the value of the assets. For more extreme risks, the premium therefore becomes too high as an annual charge. Practice in the UK broadly confirms this – the limit for an insurable flood risk when there is no adverse selection, and the risk is bundled with other hazards is a 75 year frequency, i.e. 1.3% probability.[62] In a press release on 31st January, 2012, the Association of British Insurers warned that as many as 200,000 homes face difficulty obtaining flood insurance when the current agreement with the Government on flood insurance ceases in 2013. Those houses face a risk of greater than 1-in-75 years, and the vast majority are significantly undercharged, due to cross-subsidies from less risky homes.[63]

6.           Annex

6.1.        Annex
1: Climate risk and impacts on transport infrastructure

|| TYPE || CLIMATIC PRESSURES || RISKS || TIME FRAME of expected impact || REGIONS mainly affected

RAIL infrastructure || Rail || Summer heat || · Rail buckling; · material fatigue; increased · instability of embankments; · overheating of equipment (e.g. engine ventilation, acclimatisation); · increase wildfires can damage infrastructure || Medium negative (2025; 2080) to high negative (2080) || Southern Europe medium negative until 2025 and high negative until 2080; West, East and Central EU medium negative until 2080

Winter cold/ice || · Ice on trains and catenary || Medium negative (2025; 2080) || Northern Europe, Central Europe

Extreme precipitation || · Damage on infrastructure due to flooding and/or landslides; · scour to structures; · destabilization of embankment || Medium negative (2025) to high negative (2080) || European wide

Extreme storms || · Damage on infrastructure such as signals, power cable etc. (e.g. due to falling trees, etc. || No information || No information

In general: || · Reduced safety; · increased cost for reparation and maintenance; · disruption of “just in time" delivery of goods and passengers

ROAD infrastructure || Roads (including bridges, tunnels, etc.) || Summer heat || · Pavement deterioration and subsidence; · melting tarmac; · reduced life of asphalt road surfaces (e.g. surface cracks); · increase wildfires can damage infrastructure; expansion/buckling of bridges || Medium negative (2025; 2080) to high negative (2080) || Southern Europe (2025), West, East and Central EU (2080)

Extreme precipitation/ floods || · Damage on infrastructure (e.g. pavements, road washout); · road submersion; · scour to structures; · underpass flooding; · overstrain drainage systems; · risk of landslides; · instability of embankments || Medium negative (2025)  to high negative (2080) || European wide

Extreme storm events || · Damage on infrastructure; roadside trees/vegetation can block roads || No information || No information

In general: || · Speed reduction; · road closure or road safety hazards; · disruption of “just in time" delivery of goods; · welfare losses; · higher reparation and maintenance costs ||

Coastal roads || Sea level rise || · Damage infrastructure due to flooding; · coastal erosion; · road closure || Medium negative (2080) || European wide

Extreme storm events || No information || No information

Heavy precipitation events || Medium negative (2025) to high negative (2080) || European wide

Mountain road || Permafrost degradation || · Decrease of stability; rockfalls; landslides; road closure; || No information || No information

Sewerage system || Heavy precipitation events || · Overloaded sewerage system can cause road flooding and water pollution || Medium negative (2025) to high negative (2080) || European wide

AVIATION infrastructure || Airports (including runways) || Summer heat || · Greater need for ground cooling; · degradation of runways and runways foundations; · higher density altitudes causing reduced engine combustion efficiency; · decrease airport lift and increased runway lengths || Medium negative (2025; 2080) to high negative (2080) || Southern Europe (2025), West, East and Central EU (2080)

Heavy precipitation events || · Flood damage to runways and other infrastructure; · water runoff exceeds capacity of drainage system || Medium negative (2025) to high negative (2080) || European wide

Extreme storms || · Wind damage to terminals, navigation, equipment, signage || No information || No information

Sea level rise || · Flooding of runways, outbuildings and access roads || Medium negative (2080) || European wide

In general: || · Interruption and disruption to services supplied and to ground access; · periodic airport closures; · higher maintenance costs

SHIPPING infrastructure || Inland shipping || High river flow (e.g. extreme precipitation, snow melt) || · Problems for the passage of bridges; · speed limitations because of dike instability; · some restrictions to the height of vessels || Medium negative (2080) || European wide

Low river flow (e.g. drought) || · Strong restrictions to the loading capacity; · navigation problems, speed reduction || Medium negative (2025) to high negative (2080) || South, East and Central Europe; in 2080 also Western Europe

Change in ice cover || In general shorter periods of ice cover can be expected; Nevertheless warm and early winters, followed by a rapid decrease in air temperature, may result in thicker or rougher ice cover formation and thus, lead to ice jams, damage to navigation signs and infrastructure (e.g. locks) || No information || No information

In general: || · Disruption of “just in time" delivery of goods; · stop of inland shipping; · welfare losses

Maritime transport || Sea level rise || · Navigability could be affected by changes in sedimentation rates and location of shoals; more frequent closure || Medium negative (2080) || European wide

Change in sea conditions || · More severe storms and extreme waves might affect ships || No information || No information

Less days below freezing || · Reduce problems with ice accumulation on vessels, decks, riggings and docks; · Occurrence of dangerous ice fog || Medium positive (2080) || European wide

Reduced sea ice || · Improved access; · longer shipping seasons; · new shipping routes || Summer sea ice could completely disappear in the Arctic Ocean somewhere between 2013-2040 || No information

Ports || Extreme storm events || · Devastation of infrastructure; · Interruptions and bottlenecks in the flow of products through ports || No information || No information

Sea level rise || Medium negative (2080) || European wide

Floods/ landslide || Medium negative (2025) to high negative (2080) || European wide

In general: || · Disruption of “just in time" delivery of goods; · welfare losses; · increased cost for reparation and maintenance

URBAN TRANSPORT || Urban transport (road infrastructure, bike lanes, walkways, rail infrastructure, waterways, public and private transport) || Temperature increase and heat waves || · Increase of the heat island effect  (e.g. melting asphalt, increased asphalt rutting due to material constraints, thermal expansion on bridge expansion joints and paved surfaces, and damage to bridge structure material) || Medium negative to  extreme negative || 2025: Southern, Eastern EU 2080: Northern, Southern,  Eastern, Central EU

Heavy precipitation events (extreme flash floods) || · Damage to infrastructure due to flooding, property at risk due to location, heavy water runoff || Medium negative (2025;2080) to high negative (2080) || 2025: Southern, Western 2080: Eastern, Southern, Northern, Western, Central

Sea level rise and storm surage flooding || · Risk of inundation of road infrastructure and flooding of underground tunnels, · Degradation of the road surface and base layers from salt penetration || Medium negative to extreme negative || 2025: Southern, Western, Northern EU 2080: Southern, Western, Northern EU

Extreme storms, strong winds || · Damages, increase of maintenance cost || Small to medium impacts || European wide

6.2.        Annex
2: Climate risks and impacts on energy infrastructure

|| TYPE || CLIMATIC PRESSURES || RISKS || TIME FRAME of expected impact || REGIONS mainly affected

Transmission and distribution infrastructure || Primarily electrical transmission and distribution networks || Extreme high temperatures || · Decreased network capacity || Medium negative (2025) to extreme negative (2080) || EUwide

Snow, icing, storms || · Increased chances on damages to energy networks/blackout || Medium negative to low positive (2050) || NWEU

Heavy precipitation || · Mass movements (landslides, mud and debris flows) causing damages || Time frame, magnitudes and frequencies uncertain || Especially mountainous regions

Primarily Transmission networks (oil and gas) || Melting permafrost || · Ties of gas pipelines in permafrozen ground cause technical problems (this is touching only arctic supply pipelines and not the EastWest gas pipelines, since the latter ones are not grounded in permafrost) || Low for 2025 and gradually increasing || Arctic Eurasia

Higher Temperatures || · Reduced throughput capacity in gas pipelines || Low for 2025 and gradually increasing || EUwide

Primarily Storage and Distribution || Storms in connection with high tides and SLR || · Threats to refineries and coastal pipelines · due to SLR/high tide/storms

|| TYPE || CLIMATIC PRESSURES || RISKS || TIME FRAME of expected impact || REGIONS mainly affected

Energy supply and demand || Hydropower,  largescale (downstream facilities) || Decreased glacial run off (mid to longterm) Extreme low rivers and stream flows during drought periods || · Increased chance on shortage of hydropower supply in summer at downstream (pluvialregime fed) stations || Medium negative (2025; 2080) to high negative (2080) || EUwide

Hydropower, small scale (upstream/alpine) || Increased glacial runoff in the short run || · Loss of "buffer capacities" for summer droughts in the mid and long run due to losses in glacier volumes || Short term: positive, Mid to long term: high negative (with individual glacial volumes, regional climates and thus different time scales) || Mainly Alps and Scandinavia

Solar energy (PV and thermal) || Increasing temperatures || · Loss in solar cell effectivity due to higher ambient temperatures || Medium (2050) and longterm (2080) negative || EUwide

Cloudiness || · For some regions with high potential (and existing capacities) a decrease in cloudiness seems likely || Highly uncertain: medium negative (2025), No information for 2080 (depending largely on the uncertain climate parameters irradiation and cloudiness) || Southern Europe: positive Northern Europe: negative (highly uncertain)

Solar irradiation || · Inverse proportional to cloudiness

Thermal power plants (incl. nuclear) || Water temperature increase || · Lower CARNOT efficiency due to higher ambient and cooling water temperatures || Medium negative (2025) to extreme negative (2080) || EUwide

Floods || · Risk of flood damages due to location of most thermal facilities at water bodies (rivers)

Extreme low water flows || · Reduced cooling water availability

6.3.        Annex
3: Climate impacts on buildings/construction sector

CONSTRUCTION Infrastructure || CLIMATIC PRESSURES || RISKS AND IMPACTS || TIME FRAME of expected impact || REGIONS mainly affected

RISK || Potential ENVIRON-MENTAL impacts || Potential ECONOMIC impacts || Potential SOCIAL impacts

Changing precipitation patterns || Fluvial /urban drainage flooding || Pollution (waste dumps, gas stations) || Through physical damage to buildings Maintaining infrastructure || Water safety of inhabitants Maintaining infrastructure || 2020 Medium /low || Cities on rivers and cities with inadequate drainage systems

High snow load || || Through physical damage to buildings, Maintainining infrastructure || Safety problem Maintaining infrastructure || 2020 || Mountain areas, northern Europe

Building and infrastructure subsidence and landslides || NA || Through physical damage to buildings Maintaining infrastructure || Safety Maintaining infrastructure || 2050 Medium /low || Mountain areas

Water scarcity, drought and implications for water resources || Limitations for green roofs || Internal water use limited. Subsidence of clayrich soils and peat soils causing foundation damage || NA || 2020 Medium /medium || Southern Europe

Temperature increases || Heat/ cold related deaths || NA || Decreased labour productivity, higher costs for cooling,  Increased costs for emergency /medical services /supplies || Health impacts || 2050 Medium /medium || Improving in NE, deteriorating in SE

Diseases (vector and waterborne diseases) || NA || 2050 Medium /low || Europewide

Air quality and health || NA || 2020 Medium /low || Europewide, notably south

Sea level rise || Sea level rise and storm surge flooding Salt water intrusion || Pollution (waste dumps, gas stations) || Through physical damage to buildings Maintaining infrastructure Higher maintenance/upgrading for/of protective installations || Water safety of inhabitants Maintaining infrastructure || 2080 Medium /low || Coastal cities

Extreme events (storms) || Direct wind  storm damage || NA || Physical damage to buildings Maintaining infrastructure || Inconveniences by service disruption of electricity and water || 2080 Low /low || Europewide, coastal areas

Disruption of power, communication, other services || NA || 2050 Low /low || Europewide, coastal areas

|| Wind power generation || Storm frequency (not severity, since facilities are capable to handle highest wind speeds) || Wind power generation has to be turned down beyond certain wind speed thresholds in order to avoid overheating/overload of distribution systems || Referring to climate model outputs, future storm frequencies are highly uncertain, but might increase in North and Baltic Sea (where offshore wind power generation is concentrated) || North Sea and Baltic Sea regions

Melting inland glaciers and water expansion due to temperature increase || SLR  (only in very few offshore cases and considering high SLR scenarios) || Long term (2080) negative ||

Reduction of electricity demand by consumer (through selfsupply of e.g. small PV units) || Higher temperatures || Reduced PV efficiency || Highly uncertain || cf. solar energy

Passive heating (geothermal) || Altering precipitation regime || Fluctuating groundwater levels || Unpredictable || Regions with sensitive aquifers

Energy demand || Higher temperatures || High AC demand in summer; high cooling demand by food industry || Short term medium to long term strong negative (i.e. raise in electricity demand in summer season) || EU wide

Low heating demand in winter || Positive

Droughts || High energy demand by pumping for irrigation || Low negative || Southern and Eastern Europe

[1]           White paper Adapting to climate change:
towards a European framework for action, COM (2009) 0147 final, Brussels.

Further infrastructure sectors (e.g.
water or ICT infrastructure) will be addressed in the implementation phase of
the EU adaptation strategy from 2013 on.

[2]           The forthcoming Communication
from the Commission on Green Infrastructure will provide additional
information on how "green" infrastructure can contribute to the
resilience to "hard" infrastructure.

[3]           Royal Academy of Engineering (2011), "Infrastructure, Engineering and Climate Change Adaptation – ensuring
services in an uncertain future", London.

[4]           HM Government (2011),
"Climate Resilient Infrastructure: Preparing for a Changing Climate",
  London.

[5]           European Policy Center (2012), "The climate is changing – is Europe ready? Building a common approach to
adaptation", EPC Issue paper No. 70, Brussels. The report argues
that while the World Bank points out that the cost of adapting to climate
change, given the baseline level of infrastructure provision, is no more than
1–2 percent of the total cost of providing that infrastructure, the costs of
adaptation within infrastructures can be high, and thus it is important to
ensure that investments are smart, cost-effective and far-sighted.

[6]           Fankhauser, S. (2010), "The costs of
adaptation", Wiley interdisciplinary reviews: climate change, John
Wiley & Sons, Ltd., 1 (1), pp. 23-30.

[7]           Ranger et al. (2010), "Adaptation in the UK: a decision-making process", Policy Brief, Grantham Research Institute on
Climate Change and the Environment and Centre for Climate Change Economics and
Policy, September.

[8]           World Bank (2010), Economics of Adaptation to Climate
Change, Synthesis report,
http://climatechange.worldbank.org/sites/default/files/documents/EACCSynthesisReport.pdf

[9]           UK Trade & Investment
(2011), Adapting to an Uncertain Climate: A World of Commercial
Opportunities, Economist Intelligence Unit, The Economist, London.

[10]          EEA (2010), The European environment – state and
outlook 2010, Copenhagen.

[11]          Altvater, S.; van de Sandt, K.; Marinova, N.; de Block,
D.; Klostermann, J.; Swart, R.; Bouwma, I.; McCallum, S.; Dworak, T.;
Osberghaus, D. (2011a), Assessment of the most significant threats to the EU
posed by the changing climate in the short, medium and long term – Task 1
report. Ecologic Institute, Berlin.

[12]          Approaches such as Integrated Water Resources Management
or integrated urban development can help to facilitate this integrated
thinking. See, for instance, http://www.gwp.org/The-Challenge/What-is-IWRM/ and
http://www.future-cities.eu.

[13]          COM(2012) 46, 13.02.2012: Report on the Implementation of
the Soil Thematic Strategy.

[14]          Examples from European cities are included on:
http://eucities-adapt.eu/

[15]          EEA (2010),
"Thematic assessment Marine and Coastal Environment", The European
environment – state and outlook 2010, Copenhagen.

[16]          Mazza L., Bennett G., De Nocker
L., Gantioler S., Losarcos L., Margerison C., Kaphengst T., McConville A.,
Rayment M., ten Brink P., Tucker G., van Diggelen R. 2011. Green
Infrastructure Implementation and Efficiency. Final report for the European
Commission, DG Environment on Contract ENV.B.2/SER/2010/0059. Institute for
European Environmental Policy, Brussels and London.

[17]          The outermost regions are
Guadeloupe, French Guiana, Martinique, Réunion, Saint-Martin, the Azores,
Madeira, and the Canary Islands (and from January 2014 also Mayotte). They are
covered by Article 349 of the Treaty on the Functioning of the European Union
which recognizes their specific constraints and provides that the Council, on a
proposal from the Commission and after consulting the European Parliament,
shall adopt specific measures to lay down the conditions of application of the
Treaties to those regions, including common policies.

[18]          For research on extreme weather events and their impact on
the transport sector see_ EWENT project http://ewent.vtt.fi or WEATHER project www.weather-project.eu.

[19]          Nemry F, Demirel H. Transport and Climate Change: a focus
on road and rail transport infrastructures. EUR 25553 EN. Luxembourg (Luxembourg): Publications Office of the European Union; 2012.  JRC72217)

[20]          Available in the Danish Portal for Climate Change
Adaptation: http://klimatilpasning.dk/en-US/Service/Cases/Sider/Adaptingrailwaystoclimatechange.aspx

[21]          European Commission (2011), Investment needs for future
adaptation measures in EU nuclear power plants and other electricity generation
technologies due to effects of climate change, final report, conducted by ECORYS Nederland BV, contract TREN/09/NUCL/SI2.547222, Brussels. Asian Development Bank
(2012), Climate risk and adaptation in the electric power sector, Manila.

[22]          The UK's 2012 climate risk assessment suggests that
upgrading the existing distribution networks to cope with climate impacts will
require between 1 and 100 million GBP per year by the 2080s.  Department of
Food and Rural Affairs (2012), UK Climate Change risk assessment (CCRA),
  London.

[23]          EEA (2010), "Adapting to climate change", The
European Environment – State and Outlook 2010, Copenhagen.

[24]          JRC (2012) "PESETA II. The Impact of climate change
on the European energy system", Report to the European Commission, DG
Climate Action, Ispra.

[25]          Swiss Re. (2011), " The
hidden risks of climate change: An increase in property damage from soil
subsidence in Europe", Zürich.

[26]          As an example see: RESNET - Resilient Electricity Networks
for Great Britain (UK), http://www.arcc-cn.org.uk/project-summaries/resnet/

[27]          To support decision makers,
planners and other keyplayers involved in infrastructure development as well as
the interested public the Commission's services have recently published a
working document containing Guidelines on Best Practice to Limit, Mitigate or
Compensate Soil Sealing. This document provides information on the magnitude of
soil sealing in the European Union, its impact on the environment – including
the climatic aspects – and examples of best practice.

European Commission [SWD(2012) 101] - Guidelines on best practice to
limit, mitigate or compensate soil sealing. Available at
http://ec.europa.eu/environment/soil/sealing_guidelines.htm

[28]          Green infrastructure investment is generally characterised
by a high level of return over time and global reviews of restoration projects
typically show cost-benefit ratios in the range of 3 to 75. See: Nellemann,
C.E. Corocran (eds) 2010. Dead Planet, Living Planet – Biodiversity and
ecosystem restoration for sustainable development. A rapid response Assessment.
UNEP, GRID-Arendal. More information on http://ec.europa.eu/environment/nature/ecosystems/index_en.htm

[29]          HM Government (2011), Climate
Resilient Infrastructure: Preparing for a Changing Climate, London, p.33-40.

[30]          Inderberg, T.H. and Løchen, L.A. (2012), "Adaptation
to climate change among electricity distribution companies in Norway and Sweden: lessons from the field", Local Environment: The International Journal of
Justice and Sustainability, 17 (6-7): 663-678.

[31]          While all European nuclear facilities had assessed the
effects of climate change within their mandatory periodic safety reviews by
2011, around 30% of fossil-fuelled power generators had made similar climate
change assessments. In other areas, notably renewable electricity as well as
transmission/distribution, only up to 5% of all facilities had undergone a
climate check.

European Commission (2011), Investment
needs for future adaptation measures in EU nuclear power plants and other
electricity generation technologies due to effects of climate change, final
report, conducted by ECORYS Nederland BV, Brussels, on page 76.

[32]          Royal Academy of Engineering (2011), Infrastructure,
Engineering and Climate Change Adaptation – ensuring services in an uncertain
future, London.

[33]          Proposal for a regulation of the European Parliament
and of the Council on Union, Guidelines for the development of the
trans-European transport network, COM(2011) 650 final/2 of 19/12/2011, Brussels.

[34]          Proposal for a Regulation of the European Parliament
and of the Council, Establishing the Connecting Europe Facility, COM
(2011) 0665 final of 19/10/2011, Brussels.

[35]          Green Paper A European
Strategy for Sustainable, Competitive and Secure Energy, COM (2006) 105
final of 8/3/2006, Brussels; and  Green Paper Towards a secure, sustainable
and competitive energy network, COM (2008) 782 final of 13/11/2008, Brussels.

[36]          Proposal for a Regulation of the European Parliament
and of the Council, Establishing Guidelines for trans-European energy
infrastructure. COM(2011) 658 final of 19/10/2011, Brussels.

[37]          Proposal for a Regulation of the European Parliament
and of the Council, Establishing the Connecting Europe Facility, COM
(2011) 0665 final of 19/10/2011, Brussels.

[38]          Communication from the Commission
to the European Parliament and the Council, Renewable Energy: Progressing towards the 2020 target, COM (201) 0031final of 31/01/2011, Brussels.

[39]          European Network of Transmission System Operators for
Electricity (2012), 10-Year Network

Development Plan 2012, Brussels.

[40]          A recent study estimates the
investment needs for adaptation between €637 and €654 million per year for
EU-26 without Malta; Institute for European Environmental Policy (2012), "Optimal
use of the EU grant and financial instruments in the next multi-annual
financial framework to address the climate objective", Interim Report,
  London.

[41]          Proposal for a Directive of the European Parliament and of
the Council amending Directive 2011/92/EU on the assessment of the effects of
certain public and private projects on the environment COM(2012)628.

[42]          IPCC (2007), "Summary for
Policymakers", Climate Change 2007: Impacts, Adaptation and
Vulnerability,[Contribution of Working Group II to the Fourth Assessment
Report of the Intergovernmental Panel on Climate Change, M.L. Parry, O.F.
Canziani, J.P. Palutikof, P.J. van der Linden and C.E. Hanson, Eds.], Cambridge
University Press, Cambridge, UK, p.20.

[43]          Directive 2001/42/EC of 27/06/2001of the European Parliament and of the
Council of 27 June 2001 on assessment of the effects of certain plans and
programmes on the environment.

[44]          For example, the proposal for 'guidelines for
trans-European energy infrastructure' COM(2011) 658 includes, in annex V, the
'system resilience, including disaster and climate resilience, and system
security, notably for European critical infrastructure as defined in Directive
2008/114/EC' as an aspect to be considered for cost-benefit analyses for
electricity transmission and storage.

[45]          Agrawala, S., et al., (2011), "Private
Sector Engagement in Adaptation to Climate Change: Approaches to Managing
Climate Risks", OECD Environment Working Papers, No. 39, OECD
Publishing.

[46]          European Commission (2012), Guidelines for Project
Managers: Making vulnerable investments climate resilient, conducted by
Acclimatise and COWI A/S, contract no. 071303/2011/610951/SER/CLIMA.C3.

[47]          The World Bank (2009), The
Costs of Adapting to Climate Change for Infrastructure, Washington.

[48]          The 2009 White Paper Adapting to climate change: towards a European
framework for action:
"Infrastructure projects which receive EU funding should take
climate-proofing into account based on methodologies to be developed. These
methodologies would then be incorporated into the TEN-T, TEN-E guidelines and
EU Cohesion Policy."

[49]          Summary results of a review of eight financial
institutions and their screening criteria and appraisal tools for climate
related finance. The study for DG CLIMA, Cooperation with EU financial
institutions: climate related standards in assessing investments and
infrastructure projects is in progress at the time of writing these
Guidelines, and is being undertaken by the consortium AEAT, ODI and Adelphi.

[50]          The OECD average ratio of capital
spent in fixed investment (mainly infrastructure) to GDP fell from above 4% in
1980 to approx 3% in 2005. See OECD (2011)

[51]          Kennedy, C. and J. Corfee-Morlot (2012), Mobilising
investment in low carbon, climate resilient infrastructure, OECD
Environment Working Papers, No. 46, Paris.

[52]          European Commission (2010), Investing
in Europe's future: Fifth report on economic, social and territorial cohesion,
  Brussels.

[53]          Amended proposal for a Council
Regulation laying down the multiannual financial framework for the years
2014-2020, COM (2012) 388 final of 6/7/2012, Brussels.

[54]          HSBC Case study on New insurance products and climate
risk, Available at:
http://unfccc.int/files/adaptation/nairobi_work_programme/private_sector_initiative/application/pdf/hsbc.pdf

[55]          Finley, T. and Schuchard, R. (2011), Adapting to
Climate Change: A Guide for the Energy and Utility Industry, BSR.
http://www.bsr.org/reports/BSR_Climate_Adaptation_Issue_Brief_Energy_Utilities.pdf

[56]          According to the Flash Eurobarometer 342 on "SMEs,
Resource efficiency and Green markets" only a minority of EU SMEs (26%) is
providing green services and products to adapt, mitigate or restore
environmental quality. At the same time, SMEs are discouraged to adopt a more
pro-active stance on climate change adaptation and mitigation because of
specific obstacles, such as limited knowledge, information and technical
support as well as lack of time and resources to make the necessary invesments.

[57]          CDP – Carbon Disclosure Project (2012): Climate Resilient
Stock Exchanges – Beyond the Disclosure Tipping Point. Carbon Disclosure
Project, London. Available at https://www.cdproject.net/CDPResults/CDP-Global-500-Climate-Change-Report-2012.pdf

[58]          ‘Availability’ means is the hazard covered at all, as
opposed to ‘coverage’ i.e. how extensive is the insurance in terms of items and
values.

[59]          Andrew Dlugolecki (2012): "Insurance
and climate change: A report for DG Climate Action (CLIMA) under the project
'Support to the development of the EU strategy for adaptation to climate change'”.

[60]          OECD (2011), “Pension Funds Investment in Infrastructure:
A Survey”, International Futures Programme, Project on Strategic Transport
Infrastructure to 2030.

[61]          Swiss Re (2007) Flood: an
Insurable Risk. Swiss Re, Zurich.

[62]          ABI (2008) Revised Statement
of Principles on the Provision of Flood  Insurance. July 2008. Association
of British Insurers, London.

[63]          ABI (2011) Under-pricing of
the flood element of home insurance for domestic customers at significant risk.
Research Brief. Association of British Insurers, London.