Article

Responding to the Climate Crisis, Pt. 1: A New Model for Resilience

As natural disasters intensify and infrastructure struggles to keep up, unprecedented government investment is fueling new opportunities.

The climate emergency is no longer an abstract threat. Droughts and heatwaves are scorching Europe; North America is reeling amid storms, floods, and wildfires; and Earth’s poorest nations are enduring almost eight times as many natural disasters as they suffered four decades ago.1 Crises that scientists have warned of for decades are now real and present, and across the globe both public and private sectors are facing up to the challenges of adaptation and resilience.

From redesigning the world’s energy systems to renewing almost every building on the planet to preparing people and infrastructure to withstand new and frightening weather extremes, challenges don’t get more complex than the climate emergency. Some of our most basic and fundamental systems require a complete redesign. Making energy production sustainable, electrifying transport, and decarbonizing buildings are huge—and global—challenges.

In this first part of this two-part series, we examine new approaches to address the escalating climate emergency and environmental justice, the need for new collaborations, and innovative ways of thinking.

Across the globe, governments and the private sector are investing in sustainable energy and resilient infrastructure on an unprecedented scale—and targeting much of those investments to the most at-risk communities. With many trillions of dollars in assets at risk2 and opportunities at a similar scale, the numbers are dizzying. The European Union has committed to spending 30% of its budget on climate action.3 The U.S. Inflation Reduction Act will unleash about $386 billion over 10 years4 and could spur as much as $3 trillion in renewable energy investment;5 the Bipartisan Infrastructure Deal unlocks around $1 trillion,6 spending only really comparable to FDR’s New Deal and LBJ’s Great Society.7

 

A New Convergence of Public and Private

Big, intractable problems demand innovative, bold solutions. And resilience is a knotty web that extends across traditional boundaries. It entangles public and private, micro and macro, individual and communal, political and commercial. Re-envisioning societal resilience entails navigating the complex interplay of physical, environmental, socioeconomic, and financial resilience that organizations often silo into separate verticals.

Building resilient societies requires changing systems and practices no single entity controls: reinsulating privately owned homes, redirecting the flow of private capital, rethinking how we consume and generate energy, reengineering how we move people and goods around the world, and redesigning assets to withstand harder and more frequent shocks. And that necessarily involves a delicate dance between government and business, even as many national and local governments and agencies struggle with outdated or failing assets, skill sets, systems, and supply chains.

When we think of federal government involvement in resilient infrastructure, our minds naturally gravitate to big national projects, like the $5 billion National Electric Vehicle Infrastructure Formula Program,8 which is creating a network of fast chargers across US highways. But the German government’s International Climate Initiative (IKI) shows how an approach that crosses not just public-private boundaries but continents and disciplines can yield dividends.

 

Global Problems Demand International Solutions

One of the most savage climate feedback loops is this: As our world gets hotter, we demand more cooling, which burns more energy, driving even greater extremes of heat. Air conditioners already contribute almost 4% of global greenhouse gas emissions9—not only through the energy they consume, but through the refrigerants they rely on, most of which are potent greenhouse gases.

IKI’s Cool Up program aims to develop economic ecosystems centered on more sustainable cooling in four partner countries: Turkey, Egypt, Jordan, and Lebanon. That won’t just help the planet. It will enable nations that have historically contributed little to the climate crisis and are already disproportionately suffering its consequences to benefit from the new green economy.

Rethinking infrastructure can often mean rewriting the old rules of the business game. The US government’s $8 billion hydrogen hubs program, for example, aims to build six to 10 green hydrogen centers across the nation, enabling communities and organizations to revitalize areas in need.10 The government requires that successful consortiums raise private capital, but many consortiums are raising multiples of the public sector investment. So huge is the opportunity—both economic and existential—that planning meetings often see companies and nonprofits that traditionally compete dividing up roles and responsibilities as partners.

 

Equity Above All

Both in the U.S. and globally, government funds are often tied to environmental justice outcomes, and new forms of collaboration between public and private entities can help achieve the required equity. Making energy and infrastructure more sustainable often aids communities in need, not least because the people most burdened by dirty infrastructure11 and most at risk from extreme weather12 tend to be socioeconomically disadvantaged too.

For example, working with a logistics provider to decarbonize a community’s port infrastructure can slash both engine noise and particulate pollution. Green banks can bring in private capital to help disadvantaged communities slash their household bills through cheap, accessible, clean solar. Developing more sustainable cooling industries can lift families out of poverty even as it protects them from heat illnesses.

From home insulation to clean energy, equity lies at the heart of the reimagining resilience megatrend. A laser focus on equity is the best way of ensuring that public, private, and civil societies rise together to meet not only the challenges but the opportunities that the climate crisis presents.

The need to reimagine resilience is just one of five megatrends converging around the climate crisis. Read on to explore how the new technology megatrends are shaping climate response.

  


1 Akihiko Nishio, “When Poverty Meets Climate Change: A Critical Challenge That Demands Cross-Cutting Solutions,” World Bank Blog, November 5, 2021, https://blogs.worldbank.org/climatechange/when-poverty-meets-climate-change-critical-challenge-demands-cross-cutting-solutions.
2 IPCC, “Fact Sheet—Cities and Settlements by the Sea, Climate Change Impacts and Risks,” Sixth Assessment Report, November 2022, https://www.ipcc.ch/report/ar6/wg2/downloads/outreach/IPCC_AR6_WGII_FactSheet_CitiesSettlementsBtS.pdf.
3 European Court of Auditors, “Special Report: Climate Spending in the 2014—2020 EU Budget: Not as High as Reported,” September 2022, https://op.europa.eu/webpub/eca/special-reports/climate-mainstreaming-09-2022/en/.
4 Goldman Sachs Equity Research, “US Inflation Reduction Act—What’s Transformational, What’s Supportive, What’s Underappreciated,” August 30, 2022, https://www.goldmansachs.com/intelligence/pages/gs-research/us-inflation-reduction-act/report.pdf.
5 Goldman Sachs, “The US Is Poised for an Energy Revolution,” April 17, 2023, https://www.goldmansachs.com/intelligence/pages/the-us-is-poised-for-an-energy-revolution.html.
6 Jacob Pramuk, “Biden Signs $1 Trillion Bipartisan Infrastructure Bill into Law, Unlocking Funds for Transportation, Broadband, Utilities,” CNBC, November 15, 2021, https://www.cnbc.com/2021/11/15/biden-signing-1-trillion-bipartisan-infrastructure-bill-into-law.html.
7 Greg Iacurci, “How Biden’s $3.5 Trillion Economic Plan Compares to LBJ’s Great Society or FDR’s New Deal,” CNBC, October 2, 2021, https://www.cnbc.com/2021/10/02/how-bidens-economic-plan-compares-to-the-great-society-and-new-deal.html.
8 California Energy Commission, “National Electric Vehicle Infrastructure Program (NEVI),” Programs and Topics, CA.gov, https://www.energy.ca.gov/programs-and-topics/programs/national-electric-vehicle-infrastructure-program-nevi.
9 Jason Woods, et al., “Humidity’s Impact on Greenhouse Gas Emissions from Air Conditioning,” Joule 6, no. 4 (April 22, 2022): 726–741, https://www.sciencedirect.com/science/article/pii/S2542435122000940.
10 Office of Clean Energy Demonstrations, “Regional Clean Hydrogen Hubs,” Energy.gov. https://www.energy.gov/oced/regional-clean-hydrogen-hubs.
11 Timothy Q. Donaghy, et al., “Fossil Fuel Racism in the United States: How Phasing Out Coal, Oil, and Gas Can Protect Communities,” Energy Research & Social Science 100 (June 2023), https://www.sciencedirect.com/science/article/pii/S2214629623001640.
12 Céline Guivarch, et al., “Linking Climate and Inequality,” International Monetary Fund, September 2021, https://www.imf.org/en/Publications/fandd/issues/2021/09/climate-change-and-inequality-guivarch-mejean-taconet.

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