This blog was originally published by WorldBank IPG here
“Beyond the Gap” aims to shift the debate regarding investment needs away from a simple focus on spending more and toward a focus on spending better on the right objectives using relevant metrics.
It does so by offering a careful and systematic approach to estimating the funding needs (capital and operations and maintenance) to close the service gaps in water and sanitation, transportation, electricity, irrigation, and flood protection.
The main innovations of this work relative to other investment needs estimates are the following:
- all of the results presented here were developed specifically for this report, following a consistent approach and timeline and based on clearly specified goals;
- numerous scenarios were used to explore both uncertainty and the consequences of policy choices;
- not only new investments were estimated, but also replacement capital costs, as well as maintenance for new and existing infrastructure; and
- we provided estimates for both access and climate goals.
Key conclusions
- How much countries need to spend on infrastructure depends on their goals, but also on the efficiency with which they pursue these goals.
- With the right policies, investments of 4.5 percent of GDP will enable lower-and-middle-income countries to achieve the infrastructure-related Sustainable Development Goals and stay on track to limit climate change to 2°C
- Infrastructure investment paths compatible with full decarbonization by the end of the century need not cost more than more-polluting alternatives.
- Investing in infrastructure is not enough; maintaining it matters.
The full report is available here.