Urban Climate Adaptation’s Money Trap
A huge barrier to cities taking major steps to become more climate-resilience is how to pay for the projects that are needed. How will they get more money from taxpayers and users of water, energy, and other public services? How will they borrow money from capital markets and incentivize private investment in adaptation measures? And, given that billions of dollars will be needed, how will they do this at the necessary financial scale?
More and more studies are emerging that tackle some of these questions, few of them more comprehensive and insightful than "Financing Climate Resilience: Mobilizing Resources and Incentives to Protect Boston from Climate Risks," just off the presses. The 60-page report by the University of Massachusetts-Boston's Sustainable Solutions Lab, produced for the Boston Green Ribbon Commission, is one of the few studies that combines a scan of the landscape of adaptation financing with the specific adaptation needs of a city. It's not an adaptation investment plan; it's a step toward such a plan. But in taking the step it also provides a knowledge asset to other cities: a framework for understanding what is possible and emerging in adaptation finance and how it fits--and doesn't fit--with a city's adaptation needs.
The picture that "Financing Climate Resilience" provides is, let's say, cautiously optimistic without ignoring the real challenges faced by cities like Boston, which must take on serious adaptation costs due to sea-level rise. An obvious challenge is to muster the political will--of elected officials and stakeholders in the community--for paying the increased costs of adaptation. But just as necessary will be the development of innovations in governance and financing. Without new ways of collaborating at the regional level and at the district/neighborhood scales, and without new ways of assuring private investors and insurers that the risks of climate change will be managed, it will be difficult--perhaps impossible--to assemble the money needed to implement Boston's adaptation.
Other cities and some states are also following analytic pathways, driven by the need to figure out where their adaptation money will come from. Gradually, as our research is finding, these pathways form a direction: cities, financial and insurance markets, and state and federal governments will have to develop a financing system for urban adaptation, not just a set of solutions for Boston, and a set for Miami, and a set for San Francisco. We'll be reporting on that research soon.
