Each of these cities has had to find its own way to public and private financial resources, because there is no system in place for solving the problem of how to pay for climate resilience—no cost-sharing arrangements, for instance, for resilience infrastructure across local, state, and federal levels of government. The cities are involuntary pioneers faced with growing climate hazards and exposure that require more money for resilience.

Examining these cities’ pathways revealed common strategies that, while only reflecting the leading-edge of urban climate-resilience financing practices, quite likely foreshadow what other cities already or may do. These strategies form the content of Playbook 1.0. But the pathways also suggest the limits of what cities are able to do, with important implications for the continuing evolution of the urban playbook for climate-resilience finance.

Playbook 1.0 Strategies;

1. Generate Local Revenue. Producerevenue for government climate-resilience public infrastructure by taxing local property owners and charging utility ratepayers.
2. Impose Land-Use Costs. Adopt land-use and building regulations and policies that place undetermined future resilience-building costs on property owners and developers, rather than on government.
3. Embed Resilience Standards into Future Infrastructure Investments. Ensure that all future capital spending for public infrastructure will be designed to strengthen climate resilience as much as possible.
4. Leverage Development Opportunities. Link resilience-building projects with real estate development opportunities to generate public-private partnerships that invest in both public infrastructure and private development.
5. Exploit Federal Funding Niches.Identify resilience-friendly federal funding streams and develop projects that fit pre- and post-disaster program requirements.
6. Tap State Government. Mine existing state programs, or seek to modify them, to obtain funds for local climate-resilience efforts.
7. Develop Financial Innovations. Explore the use of innovative mechanisms for generating public and private revenue for climate-resilience projects, including district-scale financial structures.
8. Pursue Equity in Resilience. Factorsocial and economic equity into funding and financing actions by serving economic development, housing, and other needs while investing in climate resilience.

The post New INC Report: Playbook 1.0: How Cities Are Paying for Climate Resilience appeared first on Innovation Network for Communities.

From the report introduction:

“The report’s analysis makes clear the great magnitude of the change needed to achieve carbon neutrality. It requires an electricity grid that is powered by renewable sources of energy and a large-scale reduction in the use of oil and natural gas for transportation, space heating, and hot water. It requires immediate and dramatic efforts to make buildings more energy efficient. It entails replacing travel in personal vehicles with greater use of public transportation, cycling and walking, while eliminating the use of internal combustion engines for remaining vehicles. And it necessitates sending zero-waste to landfills and incinerators. These necessary achievements will require innovation and transformation in our city’s core systems. And we will need to make these changes in a way that is cost effective, that equitably distributes benefits and burdens, and that does not unduly disrupt ongoing operations.”

— Amos B. Hostetter, Jr., Co-Chair, Boston Green Ribbon Commission Vice Chair, Boston Green Ribbon Commission and Trustee, Barr Foundation

— Mindy Lubber, Vice Chair, Boston Green Ribbon Commission, CEO & President, Ceres

The post “Carbon Free Boston” — How One US City Can Reduce GHG Emissions and Improve Quality of Life appeared first on Innovation Network for Communities.

For even the leading-edge cities, making a commitment is not the same as having a rigorous data-driven strategy for getting there – much less actually implementing the strategy. So what does it take to develop a decarbonization plan that you can have confidence in? How do you know if a plan is real vs. one that is just wishful window dressing?

We have gotten a peak into the nitty gritty of this process from co-author John Cleveland’s work with the Green Ribbon Commission in Boston and the city’s “Carbon Free Boston” initiative. The Commission is a voluntary CEO network that supports implementation of Boston’s Climate Action Plan. In a process that began over three years ago, the Commission agreed to help the city develop a serious strategy for getting to carbon neutrality by 2050.  The end goal would be a report, and an accompanying policy modeling platform that could quantify the most effective combination of technologies and policies to reduce GHG emissions across the energy, buildings, transportation, and waste sectors. Both are now scheduled to be delivered to the city by the end of January 2019. They will be used to inform the update of the city’s Climate Action Plan, which will include detailed five-year implementation roadmaps for priority strategies.

Getting to this end point has proved to be a long, complicated, and expensive process.  The first challenge was simply figuring out what a rigorous emissions reduction plan should look like, and what kind of analysis was needed to support it.  Fortunately, we had some good guidance on the desired content of a report, including the “Framework for Long-Term Deep Carbon Reduction Planning” that our non-profit, the Innovation Network for Communities, developed for the Carbon Neutral Cities Alliance (CNCA) several years ago. We also had examples of exemplary plans developed by a number of the CNCA cities to draw upon.

What these materials didn’t tell us anything about was the structure of the underlying analytical tools that were needed to be confident that strategies laid out in the plans would actually produce the intended results. It turned out that cities were taking several different approaches to this, at different levels of complexity. The most basic version was to use simple spreadsheet calculations based on a city’s emissions inventory that estimated the amount of GHG reductions that would be produced by different technology outcomes – such as retrofitting of existing buildings, installation on on-site solar, reduced VMTs, etc. A slightly more sophisticated approach was the use of third party “technology” modeling platforms, such as E3 Pathways software, or the Stockholm Environment Institute’s LEAP (Long-Range Energy Alternatives Planning) software. These softwares are able to show the projected emissions profile of specific technology end-games, but they are not able to assess the ability of any strategies or policies to achieve those end games. The most sophisticated approach involves the development of a policy modeling platform with separate models for the energy supply, transportation, buildings and waste sectors. The only other city in the US that we found had developed such a model was New York City, which had created a policy modeling platform for its 80X50 plan.

We ended up partnering with Boston University’s Institute for Sustainable Energy to design and develop the policy modeling platform and produce the “Carbon Free Boston” report. They convinced us it was worth it to take the more sophisticated approach, because it would add more rigor to our results, and also create an on-going tool that the city could use to assess policy choices in the future. Making this choice significantly increased the cost (the total project budget exceeded $1 million) and the time required to produce the “Carbon Free Boston” report.

The buildings sector model will give you an idea of the sophistication of the resulting tool. The modeling team divided the city’s 630 million square feet of building stock into 15 different building types with four different age classes, based on changes in the building code. This created 60 separate building typologies. Our buildings contractor (Arup) developed a separate energy model for each typology and then calibrated the models to actual energy data shared by our electricity and natural gas utilities. These models were linked to the city’s assessor database so that there was in effect an energy simulation model for every parcel in the city. This overall model now allows us to simulate the emissions impact of implementing a broad range of energy efficiency, renewable energy, and thermal decarbonization strategies over different building types and different time horizons.

Similarly sophisticated models were developed for the energy, transportation, and waste sectors. These now allow us to measure the impact of different city policies and strategies on emissions levels, and track whether they have the intended effect over time. The analysis, of course, is just the start of the process.  What will really matter is the development and execution of implementation strategies.

While a simple stroke of the pen can signal a Mayor’s commitment to an aggressive emissions reduction target, the “devil is in the details” – these commitments don’t mean much if they are not backed up by rigorous analysis and disciplined execution.

And as the IPCC report reminds us, this has to happen not just in a handful of innovator cities, but the entire global economy. Are we up for that challenge?

After the “Carbon Free Boston” report is completed (watch this site to download a copy in late January), the long-term strategy is for the Institute for Sustainable Energy to develop a slightly more generic version of the policy modeling platform that can be used by other municipalities. The Institute hopes to create a Center for City Climate Modeling that can offer open-source access to the modeling code, and advise cities on how to customize the platform to their unique circumstances.

The post Making City Decarbonization Real: Boston Uses Rigorous Analysis to Measure and Track Impact of Policies and Strategies appeared first on Innovation Network for Communities.

Purpose

This research project’s purpose is to identify ways to accelerate the development and growth of public and private financial resources that US cities can use to implement climate resilience plans and projects. Cities often cite access to capital as a major barrier to the implementation of their climate resilience plans.

 Findings

Climate risks disrupt city financing.Cities use multiple, well-established public and private systems to pay for their public responsibilities, but these systems do not have the ability to meet the challenges of financing the mounting climate resilience needs of cities. Barriers include:

• Insufficient publicrevenue for climate resilience projects.
• New and uncertain financial risks posed by climate changes.
• Inherent imbalances between the burdens and benefits of climate resilience projects.
• Misaligned public policies and markets.
• Resilience projects that fall outside of traditional municipal jurisdictions.

Emerging innovations in climate resilience finance do not sum to a system-building approach.A growing number of developments seek to address barriers and opportunities in climate resilience financing. We identified 30 of these [Table 1], but they are mostly “one-off” innovations and changes made by an individual city or financial institution or insurer for a specific project or financial mechanism. Most of these efforts are largely disconnected from each other. The public and private sector players engaged in climate resilience finance efforts do not have a shared vision, framework, or strategies for developing, as quickly as possible, a comprehensive, large-scale urban climate resilience financial system. The set of innovations does provide a great deal of the research-and-development that could evolve into a more systemic and impactful stage of change.

A system for city climate resilience finance would contain three key elements:*

• City transaction capabilities, including adaptation planning, adaptation investment planning, governance arrangements at metro-region and city district scales; and public revenue sources and funding mechanisms.
• State and federal government policies, including: adaptation planning requirements and support; climate resilience standards; flexible governance structure frameworks; insurance market regulations and public “last resort” insurance policy; and grants and loans for city adaptation projects.
• Financial, insurance, and real estate market capacities, including products and services; risk assessment and disclosure; risk pricing; and lending and investment standards.

Recommendation

Development of an urban climate resilience financial system can be accelerated and expanded through collaborations of cities, state and federal governments, and real estate, insurance, and financial markets, as well as community-based sectors such as health care and utilities, that prioritize, design, and implement system-building solutions.

Given the highly distributed nature of the system that exists and needs to be developed, cities—as the entities directly facing the financing challenge—are the only players with an overriding interest in developing all of the elements of a climate resilience financial system. But they would need support and resources from their partner organizations, other sectors and levels of government, as well as philanthropy, to help lead and sustain such an effort.

A starting point for developing a system-building collaborative approach would be to organize cities to link, learn, and align with each other, and act in concert with relevant private sectors and other levels of government to develop and implement projects that build a climate resilience financial system.

The post Research Report: Toward a Climate Resilience Financial System for US Cities appeared first on Innovation Network for Communities.

CNCA members selected the seven Game Changers to share with other cities: next-generation practices that can accelerate and amplify decarbonization in cities.

Cities that are embracing these game changing opportunities are thriving and benefiting economically because they are clean, efficient cities where people want to live. Gregor Robertson, Mayor, Vancouver, British Columbia, Canada

The Game Changers and the CNCA cities used as a main examples are:

• Adopt a Zero-Emissions Standard for New Buildings – Vancouver
• Build a Ubiquitous Electric-Vehicle Charging Infrastructure – Oslo
• Mandate the Recovery of Organic Material – San Francisco
• Electrify Buildings’ Heating and Cooling Systems – Boulder, New York City, Washington DC
• Designate Car-Free and Low-Emissions Vehicle Zones – Stockholm, London, Oslo
• Empower Local Producers and Buyers of Renewable Electricity – Washington DC, Melbourne, Rio de Janeiro
• Set a City Climate Budget to Drive Decarbonization – Oslo

The report details the cities’ key implementation steps and lessons learned and challenges that other cities may face in implementing the actions. It was released September 12 at the Global Climate Action Summit.

The post Game Changers: 7 Ways Leading Cities Are Reducing GHG Emissions appeared first on Innovation Network for Communities.

What a dilemma: we were having fun, being with each other at the once-a-year gathering of the Carbon Neutral Cities Alliance (CNCA), people from 20+ cities across the globe that are leading the charge on reducing GHG emissions. Also making it hard to frown: we’re optimists, “Yes We Can” people.

Being optimistic isn’t easy when you contemplate the slowness of the world’s response to global warming and the increasingly turbulent and dangerous weather we’re experiencing everywhere. And yet… without denying anything about our troubling “climate reality,” there’s something about being with the climate-change leaders from local governments in two dozen cities that leaves you inspired and energized. These cities–San Francisco, Washington DC, Melbourne, Yokohama, Stockholm, Amsterdam, Toronto, to name a few–are making extraordinary progress in reducing their emissions, while growing their economies and making their cities better.

The CNCA met in Boulder, Colorado, just before the Global Climate Action Summit (GCAS), at a time when the world is looking to city leadership to reduce GHG emissions. The Alliance’s members gathered to exchange “how to” information and advice and plan new climate-action innovations. They reviewed the Game Changers Report they would release at GCAS to help other cities take bold steps to accelerate decarbonization. Bottom line: great progress is happening and even more can be done by cities.

CNCA’s spirit of pioneering and sharing, or taking risks and making gifts to other cities, is the way of thousands of other city leaders around the world. They exchange with and advise each other, learn together, and collaborate. They recognize that no city can solve the climate problem by itself; that they need each other to act, as boldly and quickly as possible.

This spirit is part of what inspires Urban Climate Rebels worldwide and keeps us going against daunting odds. It’s why, at least for me, it wasn’t easy to wipe those smiles off of our faces. Click!

Read more about the Urban Climate Rebel Alliance in our new book Life After Carbon. 

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A city innovation lab isn’t a facility with highly controlled conditions; it’s the entire city–the complex, real urban world with its messy swarms of businesses, governments, and organizations; core urban systems; ideas, interests, and politics; built infrastructure, natural ecosystems, economic sectors; and, of course, all manner of people and groupings. These city labs exist on every populated continent. 

As leaders in the climate struggle convene for the Global Climate Action Summit and Climate Week, the role of cities worldwide as active champions and innovators is becoming more and more prominent. Three decades ago, when the first warnings of global warming were sounded, almost no one looked to cities for a response. As we write in Life After Carbon:

“Cities were widely viewed as environmental villains, not saviors. . . . It was widely assumed that a serious response to climate change was up to national governments cooperating internationally. . . . The who did think about a role for cities weren’t sure how much cities could do or would be willing to do to reduce GHG emissions.”

In 2009. mayors showed up in force in Copenhagen to influence national leaders negotiating at a UN conference to reduce emissions, but they were kept on the sidelines. But six years later, when the UN tried again In Paris, cities were in the spotlight. The UN had announced that as much as 70% of global GHG emissions was produced in cities. Leaders from more than 400 cities assembled to press national leaders and pledge collective support for ambitious climate change efforts. In 2017, when President Trump announced his intention to withdraw the US from the Paris climate accord, nearly 300 American mayors rose up in defiance.

The mounting urban uproar, full-throated by 2018’s fall events, has helped turn up the heat on national governments to take climate action. More significant, we explain in Life After Carbon, “has been the outpouring of urban climate innovations, which shows national leaders and everyone else that cities are doing a great deal–more than anyone expected–in response to climate change, and they could do even more. . . . A great surge of climate innovations designed, tested, and implemented by cities is sweeping through the world.”

By studying the climate innovations produced in 25 of the world’s most ambitious climate-action cities, we were able to discern a set of underlying radical ideas for urban change that have been triggered by the climate crisis. The first part of Life After Carbon studies these cities and their climate work. We call them “urban climate innovation laboratories”–

“Cities that have come to understand themselves, their place in the world, in a new way and act boldly on their changed awareness. They take to heart the challenge of climate change. They publicly commit to do more about it than many national governments have pledged. They immerse themselves in figuring out what they can do. And they start doing it, despite the many technical, political. economic, and social difficulties involved.

“They are changing just about everything in “the city”–the buildings, streets, neighborhoods, and other physical infrastructure; the supply and use of energy, water, transportation, green spaces, and other land; as well as the consumption of resources and disposal of waste. They are changing economic opportunities and the costs of doing business and living in the city. They are changing the minds and habits of their residents. They are changing the identities of their cities.”

More about climate innovation lab cities–and the list of the 25 cities featured in Life After Carbon–here. Better yet, order the whole book from our publisher.

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But these raters don’t assess a city’s viability in the era of climate change. They don’t ask if cities like Boston, Paris, Shanghai, or Rio de Janeiro will be well prepared for the most disruptive weather that is likely to occur. Or if cities like San Francisco, Copenhagen, Mexico City, or Sydney are well on their way to de-carbonizing their energy supply, or putting the needs of pedestrians, bicyclists, and mass-transit riders ahead of the needs of cars, or rapidly greening their building stock, or minimizing consumption of materials and the unnecessary creation of waste. “There’s a dog’s breakfast of systems to rank cities,” observes Gregor Robertson, mayor of Vancouver, which set the goal of being the world’s greenest city. “But there’s nothing rigorous about it.”

Some cities may be lucky when it comes to certain challenges of the post-carbon, climate-change era we are entering. In 2016 The New York Times identified a set of North American cities that would be good bets for escaping the harshest effects of climate change—because they are favorably positioned by topography or geography. Coastal Portland, Maine, for instance, lies high enough above sea level to avoid inundation and far enough to the north to avoid systemic drought. Detroit, Chicago, and Madison, Wisconsin, all in the Great Lakes region, will have to cope with weather that is somewhat warmer and wetter, but not nearly as altered and challenging as cities further to the south, and they have access to plenty of fresh water.

But luck will not be enough for achieving urban success in the face of climate change. Success depends on decisions a city is making now and in the next few years. That’s what city ratings should be telling us about. 

The post The Best City? You Can’t Ignore Climate Anymore appeared first on Innovation Network for Communities.

In the last few months, I’ve offered counsel to cities as diverse as Minot, N.D. (at the invitation of FEMA), Miami Beach (at the invitation of the Urban Land Institute) and Buras, La. (at the request of the Rockefeller Foundation 100 Resilient Cities). Speaking with these local and innovative government leaders has helped me refine my own understanding of the current state of resilience finance in the U.S.

Here are four market inspirations I have gleaned that could drive more resilience finance:

1. In its report “Climate Adaptation and Liability,” the Conservation Law Foundation unveils numerous cases describing a new era in the “duty to care” for designers, real estate professionals and municipal government officials as events that future climate scenarios envision replace force majeur events.
2. Although the federal National Flood Insurance Program distorts price signals in the risk transfer elements of the market – and I strongly encourage you to engage on its reauthorization, perhaps starting by reviewing this excellent piece – in such highly vulnerable markets as Houston and Miami, an insurance price signal is emerging as flood insurance premiums rise faster there than elsewhere.
3. Credit rating. Moody’s and Standard & Poor’s have made announcements that the physical risks from climate change will be factored into municipal credit ratings, and S&P has been clearer about this impact, for instance as shown in the article How Our U.S. Local Government Criteria Weather Climate Risk. Municipalities don’t want their debt to be more expensive and, therefore, less attractive to investors, so this is a big deal.
4. Big data. With the emergence of big data modelers such as Airworldwide, RMS and Core Logic in the past decade, more financial services professionals will have growing access to the cost of both actual and avoided loss from extreme events. While cities cannot afford these big modelers, financial sector parties are applying them to city problems and generating new methods to create “bankability” – revenue generation from projects that traditionally don’t generate rates or fees. For instance, resilience bonds, described in a very approachable way by re:focus partners in this report, link future insurance savings to a bank of funds for current risk mitigation projects.

Along with these drivers, progress continues in the debt market, creating more means to fund city resilience. Most importantly, that headway should include a swift pivot of general obligation bonds from traditional investments that neither create collateral benefits nor consider climate change scenarios to resilience investments promising more long-term return and performance given future risk. That is really the only way to ensure we create resilient cities. But with close to 80,000 issuers of municipal bonds in the country, the four key drivers above are key for ensuring this transition.

At the same time, the growth of innovative bond mechanisms could also help cities increase funds for resilience. The District of Columbia has had success with green bonds for its water and sewer authority, while the Massachusetts Bay Transit Authority has created excellent examples of sustainability bonds’ utility. The resilience bonds mentioned above are another in this category. Of course, catastrophe bonds – some with hurricane triggers – are another insurance-linked mechanism for getting money to cities after disasters.

In a future post, I will suggest ways cities can invite more resilience finance, given these market levers and financial means.

This op ed originally appeared on Triple Pundit

The post Paying for Resilience: Market Drivers and Financial Means appeared first on Innovation Network for Communities.

• Investors who deal in debt and equity and seek to benefit from the risk and opportunity that climate change creates.
• Urban planners and nonprofits dealing in social equity and cohesion and eager to prevent harm based on risk and opportunity created by climate change.

Will these two paths converge in the wood, as Robert Frost put it? Or, is it never the twain shall meet as Kipling expressed it?

According to the United Nations-supported Principles for Responsible Investment, $70 trillion (U.S.) of assets under management integrate environmental, social and governance (ESG) factors into core operations. But, peeling back that good news, would we see more social equity ensuing? By and large, the positive and negative implications on communities of climate change aren’t being addressed.

I frequently note that climate change exacerbates the tale of two very different futures – rich getting richer from extraordinary resources for resilience and poor getting poorer due to precarious resilience in everyday circumstances. What would it take for those two futures to cause investors to integrate social equity into their climate strategies, creating what I call Finance “Adaptation Equity?”

First, though, they would have to grasp – and care about – social equity issues. Those investors already trying to achieve sustainability goals are likely to see social equity as material to financial equity because it:

1. Accomplishes two ESG pillars – Environment and Social – that link the mitigation of physical risks of climate change with the enhancement of communities. Think of aligning with international standards related to human rights or the 17 U.N. Sustainable Development Goals.
2. Unveils new investment opportunities in physical assets that can enhance community equity such as infrastructure and real estate.
3. Responds to an admittedly small group of impact investors who focus on beneficiaries and aim for responsible investment to be defined by social equity.
4. Portends new pathways for longer-term investors (e.g., pensions) and development funders (e.g., blended finance teams) to apply their assets to climate and inequity affected sectors and regions.
5. Enhances understanding of systemic risks within the financial ecosystem by connecting climate change and inequity, especially given that without concerted effort, climate change will make inequity worse – and inequity has been proven to impact markets.

Still, for finance equity to flow to social equity requires work. Here are three strategies for each.

Investment equity

1. Include social equity principles in investment policy statements and goals as well as in requirements for consultants and advisors. Ask, “Will this asset improve the lives and livelihoods of lower resourced communities?”
2. Make social equity a part of risk mitigation assessments for climate-exposed assets, broadening the scope of the Task Force on Climate-Related Financial Disclosure guidelines to ensure that social elements are privileged.
3. Insist social equity be part of green bond project frameworks, asking if the infrastructure asset will have an equal or greater number of lower-resourced beneficiaries.

Social equity

1. Include means to raise fees and taxes related within social equity projects to make them more attractive to financiers. Ask, “How can we make this project a revenue generator?”
2. Make calculations that show the market benefits of social equity in your geographies and communicate them to public and private stakeholders.
3. Insist that social equity be part of financial assessments for infrastructure and other projects by being present at negotiations and integrated design discussions.

As efforts create successes, failures and draws, both groups should communicate action on social and investment equity with their clients and beneficiaries to help build this field of practice.

This piece originally appeared in Triple Pundit.

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