Geopolitical tensions, economic shocks and climate events are reshaping the geography of connectivity linked to "critical" infrastructures. The demand for new infrastructure is already driven by the need to replace obsolete assets (e.g. in the USA), new market needs (e.g. the construction of data centers or storage systems) and demographic dynamics (e.g. rapid urbanization in developing countries). However, the mantra of efficiency, which for decades has driven globalization and thus infrastructure investments, is leaving more room for resilience in the planning of logistics, energy, water, digital, military or financial networks. Why is this trend underway?

First, the conflicts in Ukraine and the Middle East, the hybrid warfare in Eastern Europe and the Baltic Sea, and the trade tensions between the United States and China have shown how dependence on a limited number of suppliers or geographical choke points can be exploited for military or geoeconomic purposes. Sectors such as energy, critical raw materials and semiconductors are the most emblematic examples of this dynamic: voluntary supply disruptions by hostile states or private actors can damage industrial supply chains, undermine economic growth and influence the stability of others. In fact, in the name of the highest and increasingly extensive concept of national and economic security, a government can make its citizens bear significant costs.

Second, the pandemic, the drought crisis in Panama in 2023-24 or the grounding of the Ever Given in the Suez Canal in 2021 have shown how individual events certainly not dictated by the logic of power can block a significant slice of global commercial traffic for days, with immediate and widespread effects. There are 27 choke points in the world and climate shocks are set to increase in the coming decades. 

Third, the rapid integration of new technologies is part of the solution for greater infrastructure resilience (think artificial intelligence or the Internet of Things), but it can also increase the likelihood of shocks. The expansion of interconnected digital systems and critical infrastructures exposed to cyberspace increases the risk of both overloads in electricity networks and cyberattacks.

In such a rapidly changing world, we need to focus on the redundancy (a concept widely used in the digital field) of production lines, infrastructure networks and trade routes.

Two reasons can help to understand the importance of investing in redundancy for the European Union. The first is climate change: by the end of the century, compared to today, European transport infrastructures will be subject on average to heat waves 28.8 to 34.4 times more often, droughts 20 to 36.4 times more often, river floods 20% to 80% more often, forest fires 20% to 230% more often and tropical cyclones 0 to 10% more often.

The second reason is the weight of trade for the EU bloc. On the economic front, in 2024 the sum of extra-EU exports and imports of goods and services amounted to 43% of EU GDP. From a strategic point of view, the EU has the largest network of trade agreements in the world, with over 40 agreements involving 76 countries; and the list is set to grow. 

The EU Economic Security Strategy, presented by the von der Leyen Commission in June 2023, is heading in the right direction, at least on paper. The risks to be monitored fall into four macro-categories: 

1. risks to the resilience of supply chains, including energy security; 
2. risks to the physical security and cybersecurity of critical infrastructures;
3. risks related to technological security and technological leaks;
4. risks of exploitation of economic dependencies or economic coercion.

To address and prevent the aforementioned risks and strengthen the resilience of its economy between infrastructure and trade, the EU aims to act on three fronts: "promotion, protection and partnership". And it has been doing so for years.

On the first front, the completion of the trans-European transport infrastructure within the framework of the revised TEN-T Regulation should be mentioned. On the second, we should recall some initiatives such as the Directive on the resilience of critical entities or those on information and network systems. On the third, the war in Ukraine and the war in the Middle East (with the Red Sea crisis attached) have deepened the reflection in the EU on the development of more or less new alternative trade corridors, such as the India-Middle East-Europe Economic Corridor (IMEC), the Eurasian Middle Corridor and the 12 Strategic Corridors in Africa within the Global Gateway. The resilience of the European system depends on this.

by Roberto Italia, Junior Research Fellow of the ISPI Geoeconomics Centre

[image by Ronald Kötz from Pixabay]

There can be no development without sustainability. Because sustainability creates competitiveness and economic value. The AIS 2025 Report addresses the crucial issues that link sustainability, economic growth, competitiveness and infrastructure with scientific rigor and an informative spirit. An indispensable common thread that has been challenged over the past year by the doubts that have held back the ecological transition.

"A misguided political cooling," explains Lorenzo Orsenigo, president of the Sustainable Infrastructure Association, a reference for the sustainability of the Italian infrastructure system, which, in its latest study, has chosen to focus on the concreteness of data to demonstrate, through concrete examples, how "sustainable companies are more efficient, competitive and ready for the future. A starting point for the development of today's and tomorrow's infrastructures," adds Orsenigo, if we want to focus "on progress and not just development."

A sort of warning, given that, as the editor of the AIS 2025 Report Marco Panara recounts, the climate around sustainability issues has definitely changed in the last two years. "After a phase of great public attention, we are witnessing a real headwind, a slowdown that in Italy concerns renewable energy," he explains. "Even in Europe, he observes, there is growing resistance to the Green Deal, with a scaling back of efforts towards emission reductions and sustainable development goals."

This is not a homogeneous context at a global level, given that, for example, encouraging signs are coming from China and India. And many large companies are realizing that climate change is real, and that adequate investments are needed to address it.

A fragmented landscape in which time is a key factor and "the cost of doing nothing is often much higher than the cost of action". Postponing means exposing oneself to increasingly serious climatic events and, consequently, to greater damage and more expensive investments to repair.

"The increase in temperatures, from now to 2030, could lead to a 2% reduction in hours worked globally, with an impact of 2.4 trillion dollars," Panara points out. "Added to this are the costs related to the loss of biodiversity and the hyper-exploitation of natural resources, estimated at 2.7 trillion a year".

Furthermore, extreme events already cost more than one trillion dollars a year. "To make a comparison, the investment needed to keep global warming below 2°C would be one-fifth of the economic damage caused by non-intervention."

There is also a close link between economic growth and sustainability. "Companies that invest in sustainability grow more, attract investors, talent, innovate better and face international markets with greater strength. Not surprisingly, their stock market prices tend to be higher than those of more conservative companies." It is in this context that sustainable infrastructures become a strategic opportunity. And they can make a difference.

"The global infrastructure assets are often obsolete and deficient," Panara points out. "We need massive investments, and they must be directed towards sustainable infrastructures. These are precisely the ones most exposed to climate risks, but also those that offer the greatest opportunities." In Europe, we need to recover and adapt them to sustainability, while in developing countries we need to create new ones according to these metrics.

"The data shows that sustainable infrastructures have a longer life, a lower environmental impact, lower maintenance costs and higher returns: up to 20% more than traditional ones". Not only an ethical choice, therefore, but also an economic one. "Sustainability is a necessity, not an option. And above all, it is an opportunity".

According to Panara, a crucial issue is to quickly arrive at a clear taxonomy of sustainable infrastructures, in order to facilitate private investments as well. "If planned and managed rigorously, green infrastructures are highly profitable, ideal for long-term investors and with a low risk profile. It would be useful in Italy if this taxonomy were to enter the Procurement Code, but for now this is not the case," comments Panara.

"Even without mandatory requirements," concludes Orsenigo, "it should be noted that the Italian players operating in infrastructure have understood how important the sustainability of the works themselves is, a condition that makes them even more certain, bankable and at lower risk of failure".

It is no coincidence that there are many projects certified with the Envision protocol, a tool created in the United States that helps to design and evaluate infrastructure works (such as roads, squares and railways) based on environmental, social and economic sustainability criteria, using a framework of 64 indicators. The works are then certified according to four levels (verified, silver, gold, platinum) depending on the scores achieved. This metric makes it possible to make investments with a return in terms of the duration of the work, sustainable life cycle and protection of the quality of life. Finally, it facilitates decision-making, promotes transparency and involves stakeholders.