Financing City Climate Adaptation

September 13, 2017 | Climate Adaptation, Green Infrastructure, Innovation Network for Communities, Urban Operating System
by Pete Plastrik

Work Under Development

The Innovation Network for Communities proposes to map efforts to address the financial needs of U.S. cities adapting to climate change and to develop insights and hypotheses about how to accelerate development of the capacities and innovations cities and financial markets need to enact extensive urban climate adaptation.

 Project Purpose

 This research project by the Innovation Network for Communities (INC) and Meister Consultants Group (MCG) will produce two deliverables:

A map/matrix of existing efforts to address financial needs of cities adapting to climate change. The map will take a broad view of existing efforts, including, for example, insurance, legal liability, and climate-risk assessment, not just debt financing of infrastructure; adaptation services as well as physical infrastructure; additional community effects, not just specific adaptation purposes). Research will focus on U.S. efforts, but will also review prominent non-U.S. efforts. The map will frame efforts by at least these six characteristics:

1. Climate Effects--extreme heat, sea level rise, flooding, etc.
2. City Vulnerabilities—physical, public health, economic, etc.
3. City Financial Needs—capital spending, services purchasing, incentives, research, planning, etc.
4. Financial Sectors—private debt, public revenues, private and public insurance, climate risk assessment/disclosure, philanthropy, etc.
5. Financial Mechanisms within Sectors—green/resilience bonds, tax increment financing, “last resort” insurance pools
   1. Types of Adaptation Projects Financed--infrastructure, services, incentives, etc.
   2. Stage of Development of the Mechanism—concept, prototype, mainstream, etc.
6. Additional Community Effects—metropolitan regional collaboration, co-benefits produced, equitable development, synergies with GHG reduction efforts, etc.

A report that analyzes the map’s implications for accelerating and institutionalizing the development of urban climate adaptation financing. The report most likely will focus on three questions:

1. How might innovations under development be accelerated, for instance through collaborations between cities and financial institutions or between financial sectors?
2. What gaps are there in current urban climate financing efforts that warrant more attention and how might they be explored?
3. What capacities—technical expertise and institutional arrangements—will cities and financial sectors need to develop or enhance for large-scale, sustained climate adaptation financing?

An underlying hypothesis of the project is that this mapping and analysis across financial sectors may reveal trends and opportunities that are not visible to more narrowly cast research that looks, for example, at a specific city vulnerability, financial need, or financial mechanism.

Both of these deliverables will inform the various practice communities of cities, NGOs, private financial sectors, and governments seeking to develop capacities and innovations for urban climate adaptation. They will be packaged into digital publication and distributed through mailing lists and other means.