IIASA

Achieving universal access to water and energy while facing growing climate risks demands more resilient and adaptive investment strategies. A new study led by IIASA and supported by the PRISMA project highlights that climate change could significantly drive up the costs of achieving Sustainable Development Goals (SDGs) in the water and energy sectors, particularly in vulnerable regions like Africa and South Asia.

Researchers found that investment needs in water infrastructure could increase by 10% to 30% under scenarios of water scarcity and climate warming, potentially adding billions to development financing plans.

Figure 1: Changes in annual average investment and O&M costs across model regions and energy supply and water infrastructure to achieve water-energy-land sector SDG targets. 

While achieving water, energy, and land (WEL) targets would still require less than 1% of global GDP, climate impacts—such as heat stress and declining water availability—could sharply raise regional costs and uncertainty. For example, South Asia may face up to a 30% variation in long-term investments, and unconventional water sources like desalination could account for up to half of water sector expenditures. The study stresses the urgent need to better align development and climate adaptation funding mechanisms. Integrated policies, such as reducing food waste and promoting efficient water use, could lower investment needs by over $26 billion annually. However, the authors warn that most current SDG analyses overlook rising costs after 2040, when climate impacts and population growth are set to intensify. They call for more adaptive and cross-sectoral financial strategies to ensure sustainable and resilient infrastructure throughout the century.

Details: IIASA authors lead the development of the MESSAGEix-Nexus model, which includes SDG and biophysical climate impacts in the energy-water and land sectors in a global Integrated Assessment Model. More details on the modelling framework can be found in Awais et al., 2024. The model is used and further developed within the PRISMA project to improve the representation of impacts and adaptation options.

Adriano Vinca et al, “Sectoral investments to achieve water, energy and land SDG under climate change uncertainty”, Environ. Res.: Infrastruct. Sustain. 5 025002, April 2025, doi: 10.1088/2634-4505/adc0bc

Image: Getty Images

This news is part of a project that has received funding from the European Union’s Horizon Europe programme under grant agreement No 101081604 – PRISMA. Views and opinions expressed are however those of the speaker(s) only and do not necessarily reflect those of the European Union or the European Climate, Infrastructure and Environment Executive Agency (CINEA). Neither the European Union nor the granting authority can be held responsible for them.

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