The Resilience Opportunity Unlocking Climate Resilience through Public Private Collaboration 2025

Appendix: Methodology Quantifying the scale of the investment opportunity is critical to attracting private-sector interest and guiding potential collaboration. For businesses and investors to engage meaningfully in climate resilience, especially through a public-private collaboration model, they need a clear view of the addressable market, its composition and where commercial logic can apply. To seize this opportunity, both top-down and bottom-up approaches were used to estimate the annual investment required by 2050 for climate resilience infrastructure suitable for public- private collaboration. Top-down analysis and methodology A three-step approach was designed for the top-down estimation. Using the annual global infrastructure investment as the baseline, this figure was then adjusted by applying the share of resilience-related infrastructure in total infrastructure spending, followed by the share of collaborative investment within overall climate resilience flows. According to the Global Infrastructure Outlook, total global infrastructure investment is projected to reach approximately $4.6 trillion per year by 2050.16 Based on benchmarks from the UNEP Adaptation Gap Report, 7–12% of this infrastructure investment is expected to address climate resilience needs, covering areas such as water systems, coastal defences, flood management and resilient urban infrastructure.17 This range remains a conservative estimation of the resilience infrastructure required, as more resilience features will be gradually introduced to different categories of infrastructure. Moreover, 50–80% of the mentioned resilience investment would involve co-financing from public or concessional sources.18 Notably, the emerging market would require more collaboration projects given its limited public-sector capability and competing priorities. Applying these parameters, the estimated investment need for large-scale, public-private resilience infrastructure will reach $330–520 billion annually by 2050 from the top-down analysis. This figure represents the investable opportunity space for collaborative models, in which public institutions and private actors share financing, risk and delivery responsibilities to protect vulnerable systems and enable resilience at scale. Bottom-up analysis and methodology To complement macro-level perspectives, a hazard- based, bottom-up analysis was conducted to estimate the annual investment required for climate resilience infrastructure aligned with public-private collaboration. This approach evaluates the capital needed across key climate hazards for most material and applicable resilience solutions. The bottom-up analysis is also structured using a three-step methodology. This approach assesses the economic cost of inaction across vulnerable regions exposed to multiple climate-related hazards, defines the protection potential of feasible large- scale resilience solutions and determines the capital needed to implement them. The first step models the direct economic losses from acute climate hazards – including floods, droughts, wildfires and extreme winds – under two emissions scenarios: Representative Concentration Pathway (RCP) 4.5 and RCP 8.5. The cost of inaction is derived by overlaying three dimensions of climate science: hazard, exposure and vulnerability. A bottom-up approach applies high-resolution spatial data19 to map hazard exposure, linked to asset distribution and GDP forecasts,20 enabling projections of annualized damage and disruption across different geographies and time horizons (2030, 2050, 2100). Annual expected losses are calculated by integrating hazard probabilities (e.g. 1-in-100-year flood events) and relevant damage functions, adjusted for the potential influence of resilience measures. Some limitations remain, including reliance on static asset datasets and coverage that’s restricted to select economic sectors. The second step assesses the maximum economic value that can be protected through current climate resilience solutions, particularly through resilience infrastructure that serves both public and private interests. These include engineered and nature- based systems such as seawalls, water retention basins, climate-smart agriculture and urban cooling strategies. This step also incorporates the concept of adaptation limits, recognizing that solution effectiveness declines under higher warming scenarios. For example, the protective effect of some water-based infrastructure significantly decreases as warming intensifies. The third step estimates the capital needed to implement adaptation measures that offer realistic and cost-effective risk reduction. Specific solutions are mapped to relevant climate risks, and sector-level BCRs are applied to quantify required investments. The focus is primarily on infrastructure-intensive interventions, including large-scale flood and drought resilience. The resulting estimation, $320–400 billion per year by 2050, represents the investment required to protect critical systems and mitigate cascading climate impacts across food, water and infrastructure networks. This signals the opportunities in potential public-private collaborations. The Resilience Opportunity: Unlocking Climate Resilience through Public-Private Collaboration 25