The Economic Implications of Climate Change on Transportation Assets

The report outlines a methodology for linking climate hazards to economic outcomes for transportation assets. It details a taxonomy of direct and indirect costs, explores the use of cost-benefit analysis (CBA) and economic impact analysis, and proposes a six-step process for climate risk assessment. The framework emphasizes the need to monetize asset decay and service disruptions to justify investments in infrastructure resilience.

• Climate change induces three primary categories of economic costs for transportation infrastructure: increased maintenance, repair and capital costs; accelerated infrastructure replacement costs; and the loss of infrastructure service and business disruption.
• In northern regions, warming climates significantly impair ice road networks by shortening operational windows. For example, the Tibbitt to Contwoyto ice road operated for only 42 days in 2006, compared to a historical average of nearly 70 days.
• Permafrost degradation increases the operating costs of highways and airport runways. On the Alaska Highway, operating costs for sections located over permafrost can be up to 10 times higher than in other areas.
• The report distinguishes between Cost-Benefit Analysis (CBA), which identifies investment choices that maximize social welfare by comparing costs of adaptation against avoided damages, and Economic Impact Analysis, which translates these costs into macroeconomic indicators like GDP and employment.
• The proposed Climate Risk and Economic Value Model (CR-EVm) follows a structured methodology: screening hazards and assets, collecting data, identifying scenarios (pre-climate, no adaptation, and with adaptation), assessing risk and value, estimating net costs, and reporting.
• Business disruptions caused by climate events can lead to significant financial losses for industry. In 2006, Diavik incurred costs in the 'tens of millions of dollars' after being forced to airlift 13,000 tonnes of dry cargo and 11,000 tonnes of fuel due to a shortened ice road season.

APA

Sawyer, D. (2014). The Economic Implications of Climate Change on Transportation Assets. International Institute for Sustainable Development. https://www.iisd.org/system/files/publications/climate_change_transportation_assets.pdf

Chicago

Sawyer, Dave. The Economic Implications of Climate Change on Transportation Assets. International Institute for Sustainable Development, 2014. https://www.iisd.org/system/files/publications/climate_change_transportation_assets.pdf.

Wikipedia

{{cite report |last1=Sawyer |first1=Dave |title=The Economic Implications of Climate Change on Transportation Assets |publisher=International Institute for Sustainable Development |date=August 2014 |url=https://www.iisd.org/system/files/publications/climate_change_transportation_assets.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{sawyer2014economic, author = {Sawyer, Dave}, title = {{The Economic Implications of Climate Change on Transportation Assets}}, institution = {International Institute for Sustainable Development}, year = {2014}, month = aug, url = {https://www.iisd.org/system/files/publications/climate_change_transportation_assets.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }