Our Climate as an Infrastructure Asset

This report by RMI argues that the global climate should be viewed as a foundational infrastructure asset. It compares the high costs of climate inaction—categorized as direct physical losses, indirect economic growth reductions, and market uncertainty—against the relatively lower costs of preventive investments in energy efficiency, grid modernization, and carbon pricing.

• The costs of climate inaction are divided into three categories: direct costs from physical losses (extreme weather, wildfires, sea level rise), indirect costs involving weaker future growth and lower asset values, and the cost of uncertainty, which destabilizes natural and economic systems.
• Direct costs of climate-related disasters are rising; between 2008 and 2018, extreme weather disasters cost an average of $84 billion annually. In 2017, costs reached $318 billion, with Hurricane Harvey alone causing $100 billion in property damage. National Climate Assessment (NCA) estimates suggest direct costs will rise to $112 billion by 2050 and $156 billion on average by 2090.
• In the United States, the value-at-risk (VaR) for assets due to climate inaction is substantial. Under a 4.5°C temperature increase from 2015 levels, VaR for privately held assets could exceed $1.3 trillion, with total assets (including public and societal) reaching $5.2 trillion. In a 6.0°C warming scenario, these figures rise to $4 trillion for private assets and $17 trillion for all assets.
• Investments in climate mitigation are presented as financially viable compared to the costs of inaction. Deep retrofits for US buildings would cost $350 billion but could yield a net value of $1.4 trillion by 2050. Upgrading the electric grid for renewables is estimated by the Electric Power Research Institute (EPRI) to cost $476 billion over 20 years while delivering $2 trillion in benefits. Installing 330,000 public charging stations by 2025 would cost $4.7 billion.
• A carbon tax of $50/ton could reduce emissions by 39-46 percent below 2005 levels by 2025. The Columbia Center on Global Energy Policy estimates such a tax, ratcheted to maintain stable revenue, would generate $180 billion annually from 2020-2029, representing a net present value of $1.5 trillion.

APA

RMI (2020). Our Climate as an Infrastructure Asset. https://rmi.org/resources/our-climate-as-an-infrastructure-asset/

Chicago

RMI. Our Climate as an Infrastructure Asset. 2020. https://rmi.org/resources/our-climate-as-an-infrastructure-asset/.

Wikipedia

{{cite report |author=RMI |title=Our Climate as an Infrastructure Asset |date=16 January 2020 |url=https://rmi.org/resources/our-climate-as-an-infrastructure-asset/ |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{rmi2020our, author = {{RMI}}, title = {{Our Climate as an Infrastructure Asset}}, institution = {RMI}, year = {2020}, month = jan, url = {https://rmi.org/resources/our-climate-as-an-infrastructure-asset/}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }