{"id":2260,"date":"2018-08-01T09:26:20","date_gmt":"2018-08-01T13:26:20","guid":{"rendered":"http:\/\/lifeaftercarbon.net\/?p=2260"},"modified":"2018-08-02T09:00:49","modified_gmt":"2018-08-02T13:00:49","slug":"climate-money-trap-so-many-adaptation-finance-innovations-but-what-do-they-add-up","status":"publish","type":"post","link":"https:\/\/in4c.net\/2018\/08\/climate-money-trap-so-many-adaptation-finance-innovations-but-what-do-they-add-up\/","title":{"rendered":"Climate Money Trap: So Many Adaptation Finance Innovations, But What Do They Add Up To?"},"content":{"rendered":"
Update for an INC project – Feedback welcome!<\/em><\/strong><\/p>\n For the past few months. John and I have been working with partners at Meister Consultants Group and Ramboll to understand the challenges and opportunities facing cities trying to fund their climate adaptation plans. It’s no secret that finding money is proving to be a big barrier to advancing urban adaptation, as we discussed in Essential Capacities for Urban Climate Adaptation<\/a>. So it’s no surprise that lots of people–cities, NGOs, government policy makers, financial institutions, insurance companies, and others–are trying to do something about it. We’ve identified more than 30 innovations or revisions of current financial practice that are in the works, almost all of them at experimental scale. Now we’re thinking about what these add up to, how they contribute to the development of a system\u00a0for urban climate finance<\/strong>.<\/em> Below we provide a summary list of these various projects, divided into 6 categories based on what the goal is, and then some initial thoughts about what it looks like to shape these blooming flowers into a well tended garden. The categories:<\/p>\n A. Generating Public Revenues<\/p>\n B. Managing Financial Risk<\/p>\n C. Balancing Burdens and Benefits<\/p>\n D. Aligning Public Policies<\/p>\n E. Leveraging\/Catalyzing Private Capital<\/p>\n F. Revising Government Jurisdictions<\/p>\n <\/p>\n <\/p>\n\n\n
\n A1<\/td>\n Improve cost-benefit analysis (CBA) to make the case for public return on resilience-project and plan investments, including valuation of environmental services. In addition, CBA could be modified to include other value for a city: GHG emissions reduction, improved social and economic equity, safety, and others.<\/td>\n<\/tr>\n \n A2<\/td>\n Require that city infrastructure projects and capital budgets incorporate climate risk and vulnerability analysis and adaptation plans\u2014a way to ensure that future spending that must occur anyway contributes to resilience.<\/td>\n<\/tr>\n \n A3<\/td>\n Use targeted federal Disaster Recovery funds (already in state government hands) for pre-disaster planning in eligible communities.<\/td>\n<\/tr>\n \n A4<\/td>\n Develop ways to monetize some of the long-term value that resilience creates:\u00a0 environmental and social benefits, future loss avoidance (insurance); and future cost avoidance (public and mental health).<\/td>\n<\/tr>\n \n A5<\/td>\n Use district-level financing mechanisms (property tax or user fee surcharges or incremental property tax value capture) to fund district-specific resilience projects.<\/td>\n<\/tr>\n \n A6<\/td>\n Issue \u201cresilience bonds\u201d that generate risk-reduction rebates from a city\u2019s catastrophe insurance premiums to pay for resilience projects.<\/td>\n<\/tr>\n \n A7<\/td>\n Create local stormwater markets and credit trading.<\/td>\n<\/tr>\n \n A8<\/td>\n Create new state government revenues (e.g., surcharges on property insurance premiums or carbon taxes) to fund risk-reduction interventions.<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n \n\n
\n B1<\/td>\n Develop metrics and disclosures that enable financial markets to incorporate risk more accurately into asset values and interest rates<\/td>\n<\/tr>\n \n B2<\/td>\n Package bonds for city adaptation projects with climate-risk insurance to strengthen debt repayment likelihood.<\/td>\n<\/tr>\n \n B3<\/td>\n Use \u201cpay for performance\u201d design in Environmental Impact Bonds, which make the amount of payments to lenders contingent on performance of the adaptation measures, such as green infrastructure.<\/td>\n<\/tr>\n \n B4<\/td>\n Require the purchase of extreme weather insurance tied to mortgages.<\/td>\n<\/tr>\n \n B5<\/td>\n Prepare accurate flood-risk maps for cities and making them available to the public<\/td>\n<\/tr>\n \n B6<\/td>\n Prepare city resilience plans and flood-risk maps based on insurance loss data from the insurance sector, which enables insurers to show reinsurers the city had reduced risks by taking due to adaptation strategies and this resulted in favorable reinsurance contracts<\/td>\n<\/tr>\n \n B7<\/td>\n Support bond-rating agencies to build the technical capacity to assess cities\u2019 climate risks and adaptation plans.<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n