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Outline

Infrastructure Victoria is an independent infrastructure advisory body to the Victorian Government, in Australia.

In April 2024, Infrastructure Victoria released Weathering the storm: adapting Victoria’s infrastructure to climate change. It includes a research report, supplementary methodology and consultancy reports.

Why was this research undertaken?

The research was undertaken to assess the benefits of adapting infrastructure to the changing climate. Victoria’s climate policy framework was assessed to see how departments and agencies are assessing resilience and adapting the infrastructure they own and manage.

The research follows the recommendation in Victoria’s infrastructure strategy 2021–2051 for the Victorian Government to strategically review the climate consequences for public infrastructure, after delivering sector-based adaptation action plans under the Climate Change Act 2017. The government published the 7 adaptation action plans in 2022.

The research found many departments still do not always consider climate risks and take action to adapt their infrastructure. Infrastructure managers reported that they do not yet have the obligation, tools or confidence to propose adaptation actions. The report makes recommendations to better consider adaptation in their normal activities.

The assessment method can help governments decide how and where to invest in adapting infrastructure to more frequent and extreme weather. It shows how to assess the risks from extreme weather and compare different solutions to better protect infrastructure assets.

Which stakeholders were involved?

Many stakeholders were consulted throughout the project including Victorian Government departments and agencies, asset managers, academics, regulators and think tanks.

What road network, connection or object has been assessed?

The research explored the economic costs and benefits of investing in climate adaptation for a site-specific road network. There were 2 cost-benefit analyses for roads and one for electricity. This case study focuses on the 2 road assessments.

The first examined how floods might affect a major suburban Melbourne arterial road, and how the costs and benefits of adaptation measures performed against a ‘do nothing’ base case. The hypothetical scenario was based on real-world data, featuring a 7-kilometre, 2-lane road in a flood zone. Eleven thousand vehicles used the road each day.

A second cost-benefit analysis considered how bushfires might affect a regional road in Victoria, and how the costs and benefits of adaptation measures compared to a ‘do nothing’ base case.

The additional risk of post-bushfire-induced landslides was examined. The hypothetical case study was based on site-specific real-world data, consisting of a 50-kilometre undivided road carriageway in a bushfire zone. The road connects 3 small towns with a total population of 600 people and provides essential access for residents, freight, tourists and emergency services. Aside from unsealed roads, the surrounding area has few alternative roads.

What did it show?

Both cost-benefit analyses demonstrated that adaptation measures can have a positive return on investment. They found governments may also benefit from coordinating and sequencing different adaptation measures.

The flooded road case study showed preventative maintenance had a high return on investment under current (5.10) and future scenarios (8.29). Other solutions including foamed bitumen stabilisation, water-sensitive urban design and programmed maintenance also performed well under both scenarios.

The bushfire/landslide impacted road case study showed programmed drainage clearing and vegetation had a high return on investment under current (5.88) and future (11.52) scenarios.

It showed that infrastructure managers can adapt a cost-benefit analysis to account for climate change risks and use it to carefully select adaptation measures. Some adaptation options were found to cost very little and deliver a positive return on investment. The case studies show the benefits of investing in more resilient infrastructure can outweigh the costs of repairing and rebuilding it after extreme weather events.

Analysis of climate hazards

The hazards were analysed in 3 stages:

Firstly, a high-level assessment of climate risks to Victorian infrastructure for transport, utilities infrastructure, and the built environment was done. The interrelation of the tasks was also assessed. Over 40 climate-related risks to Victoria’s government-owned and regulated infrastructure were identified. The project chose 2030 and 2070 as target dates to analyse climate risks and selected climate scenarios based on the Intergovernmental Panel on Climate Change’s Representative Concentration Pathways (RCPs).

These risks were tested with stakeholders, using a multi-criteria analysis. Risks were prioritised that:

  • had fewer effective controls in place
  • had more flow on impacts, including direct and indirect impacts on other sectors
  • had limited adaptive capacity, such as limited redundancy, back-up solutions or where recovery would take a long time
  • can add value to future infrastructure strategies or the government’s adaptation action plans.

In the second stage of the project, different types of extreme weather events, exposure and high-level infrastructure vulnerabilities were examined. This process was used to select more specific climate change risks to infrastructure, which would be used later to economically assess possible adaptation measures. Three risks from the high-level risk screening were examined in more detail, namely:

  • damage to, or degradation of electricity transmission and distribution assets caused by extreme weather events
  • damage to roads or disruption of access caused by extreme weather events
  • damage to public hospital building structures caused by extreme weather events

The 3 risks were interrogated by developing more specific risk statements, geospatial mapping regional exposure to climate hazards, and identifying potential sensitivity and adaptive capacity factors that can influence infrastructure’s vulnerability. Compounding events, cascading effects, current controls and adaptation actions were also examined.

Thirty-six detailed risks in the 3 infrastructure categories were identified. A risk matrix was used to rate each for their likelihood and consequence. They were rated for both a low emissions scenario (RCP 4.5) and a high emissions scenario (RCP 8.5). The risks were documented in a risk register.

The project geospatially mapped the location of infrastructure and overlaid data representing hazards. The maps show the potential exposure of hospitals, roads and electricity networks to different climate hazards. Infrastructure in different Victorian regions shows different exposure to these hazards. Each detailed risk was assigned a regional exposure score and calculated an average regional exposure score to provide a statewide view.

An assessment was made of the adaptive capacity for infrastructure or a system to successfully adjust to, take advantage of, or respond to the consequences of climate change impacts, and assessed the compounding and cascading impacts. The economic case for adaptation options was evaluated.

Resilience assessment

A high-level, statewide risk assessment of certain types of Victorian infrastructure was undertaken, including geospatial mapping of regions across the state exposed to flood and bushfire risk. Two types of infrastructure (roads and electricity distribution) were selected for a cost-benefit analysis incorporating hazards.

The cost-benefit analysis comprised a unique approach. It assessed direct and indirect costs and benefits, maladaptation, and embodied emissions associated with the measures and compared adaptation pathways.

How are adaptation solutions considered?

Infrastructure Victoria demonstrated a new cost-benefit analysis method that can be repeated across different sectors, infrastructure types and locations. The physical adaptation measures were divided into 4 categories:

•       higher-cost investment options, such as large-scale projects requiring the construction of infrastructure or higher-cost materials

•       lower-cost investment options, including nature-based solutions

•       maintenance, including increasing periodic maintenance and incorporating preventative maintenance

•       hazard management solutions, such as communication and early warning systems, removal of hazards and temporary structures.

To conduct an economic analysis, a base case ‘do nothing’ scenario was created under current climate conditions for flooding and bushfire risks for roads and high wind risks on electricity distribution networks. The project then projected future climate conditions for 2070 against which the costs and benefits of selected adaptation measures were compared using RCP8.5. The cost of implementing and maintaining each adaptation measure, including replacement costs where appropriate, was measured. The analysis also included the embodied carbon emission cost of each adaptation measure. A long list of adaptation measures for 2 hypothetical scenarios for roads was then created.

These included damages to roads due to flood events for a major arterial road, and service interruptions of roads caused by bushfires and subsequent rainfall-induced landslides in a regional location of Victoria.

A multicriteria analysis was created to create a short list of adaptation measures and assess the efficacy of each measure, and the embodied carbon associated with producing and transporting the materials for each one. Assessment criteria were developed for community impacts during construction and maintenance, recovery time, cost of construction, level of net impact on the environment, maladaptation risks and embodied emissions.

Matched pairs analysis was used to weight each criterion by its relative importance. This involved comparing 2 criteria at a time and deciding which was more important. The process was repeated until all criteria had been ranked against each other. This necessarily involved some subjective judgement, but it offered a way to actively consider and document each element and make the choices transparent.

Scores against each criterion were assigned on a scale of 0 to 5 for each adaptation measure and applied the weighting. A review of the scores guided the selection of 8 adaptation measures for each exemplar. Further details of the analysis can be found in the technical report[1].

For the road analysis, each adaptation measure was assessed for its ability to reduce the risk level originally quantified by the vulnerability assessments. This evaluation estimated the residual risk after adopting the adaptation measure. It resulted in values for the average annual loss, average annual damage days, and indirect tangible and intangible losses.

The road example relating to bushfires and landslides also included an estimate of the annual probability of loss of life.

Specific flood modelling tools were used for the metropolitan road flood example and bushfires and landslides for the regional road example. Compared to doing nothing, it was found that good adaptation does not have to be expensive.

For floods, 5 adaptation measures produced a positive return on investment in all conditions: foamed bitumen stabilisation, water-sensitive urban design, preventative maintenance, and optimising the road grade now to absorb one-in-20-year flood events. Preventative maintenance and foamed bitumen stabilisation produced the highest returns on investment under both current and future conditions, using a 7% discount rate. Preventative maintenance produced $5.10 for every $1 spent in current climate conditions, increasing to $8.29 under future conditions. This was shown to extend the lifespan of infrastructure assets, helping to avoid costly repairs and premature replacements. Foamed bitumen stabilisation showed $2.98 for every $1 spent in current conditions and $4.83 under future conditions.

An adaptation pathway approach was adopted to show that some adaptation measures that do not produce a high return on investment by themselves may work better when coordinated with other measures or implemented using a staged approach.

How is the adaptation strategy implemented in practice?

Infrastructure Victoria does not implement policy but is an adviser to the government. The Victorian Government must decide if, how and when they implement the recommendations.

There are many actions the Victorian Government can take to improve the resilience of public infrastructure in Victoria to climate change. They can change systems and requirements for departments and agencies, so they can better adapt their assets to climate change. The government can develop new policy settings that give clear direction, and supply asset managers with easy-to-use climate data.

New tools can better support infrastructure managers to embed adaptation into everyday practices. This includes asset management, risk management, and financial analysis and disclosure. Clear guidance for infrastructure managers and other government staff can be provided on how to develop a quality business case to demonstrate the benefits of funding high-performing adaption solutions.

Infrastructure Victoria developed 7 recommendations to better assess and prepare Victoria’s infrastructure for the impacts of a warming climate:

  1. Boost priority and oversight for infrastructure adaptation
  • Make public infrastructure resilience a priority in Victoria’s climate change strategy.
  • Develop an adaptation action plan for Victoria’s energy system.
  • Include all infrastructure types in future adaptation action plans.
  • Specify the responsible agency for each adaptation action.
  • Regularly publish a progress and evaluation report on adaptation actions.
  1. Coordinate and standardise climate projections
  • Establish an agreed set of climate projections for use in government infrastructure planning and management, especially projections of extreme weather events.
  • Keep improving local-level data that infrastructure managers can use for site-specific analysis.
  • Deliver training and ongoing support for infrastructure managers to apply the data to climate risk assessments.
  1. Use asset management systems to improve resilience
  • Release climate change guidance on assessing climate vulnerability and risk, designing for resilience, and adopting preventative maintenance.
  • Support agencies to develop the processes, tools and expertise to embed climate considerations in asset management practice.
  1. Integrate climate risk into government risk management
  • Develop detailed guidance to accompany the Victorian Government Risk management framework on how to assess climate-related risks to infrastructure and integrate them into decision-making.
  1. Align climate and financial risks to infrastructure
  • Include climate adaptation in the government’s long-term financial management objectives for infrastructure.
  • Require departments and agencies with infrastructure holdings to prepare climate-related financial risk disclosures.
  1. Update business case and investment guidance
  • Update existing business case guidelines, technical guidelines and templates to include the risks and impacts of climate change.
  1. Build confidence that good adaptation measures will receive funding
  • Attach funding to the 2026 updates of the system-wide adaptation action plans, to encourage government agencies to evaluate and prioritise assets for adaptation and incorporate adaptation into business cases

Lessons learned?

Assessing where and when to invest in infrastructure adaptation is a complex challenge for governments. Governments own manage and maintain many different assets across their jurisdictions. They cannot do everything, everywhere, all at once.

Researchers and governments are still developing methods to assess climate risk, vulnerability and adaptations for infrastructure. The research extends and applies these developing methods, with the hope that governments and other researchers can apply and further develop the methods. This can help governments to better prepare infrastructure for the impacts of climate change and select sensible adaptation actions to protect it. By doing so, governments can avoid some of the worst impacts of climate change and better protect their citizens and economies from its most harmful effects.

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