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Global Infrastructure Gap: $57 Trillion in New Investment Needed by 2040

"The big picture is we need $57 trillion of new infrastructure worldwide by 2040," said Lee McIntire, chairman and CEO, CH2M Hill, at The Atlantic's annual Energy + Infrastructure summit in Washington, D.C. That number may seem huge, but McIntire said the global economy is expected to grow over the next 30 years from $70 trillion to $140 trillion if the world continues at the rate of 3.5 percent a year. "The economy will be twice as big as it is now." Plus, the world will also have two billion more people by 2040, who will all need new sidewalks, bike lanes, roads, subways, and airports.

McIntire believes that "economic development precedes infrastructure development." But the two are largely inter-connected. "We need enough money, will to produce jobs for 2 billion new people." To create all of those new jobs, the world needs new infrastructure.

While developing countries in Asia and Africa are pushing full steam ahead with new infrastructure — and Europe continues to invest in infrastructure at high rates — the U.S. is falling further and further behind. "The U.S. just doesn't have its act together." The U.S. invests about 2 percent of annual GDP in infrastructure. The world averages 4 percent, while Europe continually puts down 5 percent each year. China alone is investing 9 percent.

President Obama made a huge to-do about investing $90 billion out of the $1 trillion stimulus from a few years ago in infrastructure. McIntire thought that was a bit of a joke considering China has spent $1 trillion in infrastructure through their recent stimulus. "The U.S. really bums me out."

McIntire said the top ten investors in infrastructure can be found among the northern European countries. The next set of 10 is found in the Middle East and Asia. Then, the U.S. comes in in the 30s, around the same ranking as Chile and Slovenia. McIntire said for the U.S. to get its act together on infrastructure, "these projects really needs to be connected to jobs." He called Obama's effort the "three-inch stimulus," as it was about "applying asphalt everywhere and filling in potholes."

While national governments have mixed records, cities are pushing ahead and are now in the lead. "Cities are the hope for the future." McIntire said 70 percent of the world's population will live in cities by 2035. Smart cities, he added, are investing in greener districts with easy access to transportation and water infrastructure.

Water infrastructure will need to be a focus of targeted national and local investment, given "our old pipes lose about 30 percent of water through leakage." McIntire said much of the world is so far behind in upgrading its water infrastructure because "it's politically difficult to replace water pipes. It's not very interesting work, and requires a long-term commitment" many mayors don't seem to have.

For China especially, this will be a critical issue given it has 25 percent of the world's population but just 8 percent of its fresh water. It's also losing more and more of that water each year due to pollution.

In a separate panel on water conservation, Brendan FitzSimons, Environmental Defense Fund (EDF); John Schulz, AT&T; and Ed Osann, Natural Resources Defense Council (NRDC), discussed efforts by AT&T and others in the telecommunications business in the U.S. to boost water conservation efforts. Telecommunications firms are major consumers of water, as they need cooling towers for their facilities. For AT&T alone, new water recycling programs could save 28 billion gallons of fresh water annually, said FitzSimons at EDF, who is partnering with AT&T on a new water-saving approach. He said "more companies will do the right thing as it also saves them money."

Osann at NRDC said a broader water conservation effort was needed in the U.S., which would include new "pricing strategies, new technology, and outreach to consumers." As an example, he said current water meters aren't precise enough to pick up the drips from a leaky faucet. If consumers were charged for leakage, many more would invest in water-efficiency.

Osann also mentioned how the U.S. spent more than $1 billion on research and development (R&D) last year, but only about $20 million of that went to water efficiency R&D. Indeed, one long-term goal of ASLA has been to create a new national research center for green infrastructure. He said more cities also need to focus on the water used in residential landscapes. "In the west, half or more water use goes to landscaping."

Image credit: Complete street construction, Upper West Side, NYC / Streetsblog