Given the low (if any) investment returns of adaptation projects, climate adaptation will typically depend heavily upon public funds and finance. The financial resources needed to reduce, respond to, and recover from climate shock events and stresses could be generated through appropriate (re)establishment of taxes, such as the International Financial Transactions Tax, on very high margin, high volume business activities.
But with or without such a necessary fiscal reckoning, the climate-related funds currently being established by national governments may increasingly be called upon to manage and recover from a growing frequency of catastrophic climate events. Recent efforts also suggest that they will likely remain inaccessible to many local jurisdictions. Therefore, the full development of subnational and local government finance mechanisms is likely necessary to address both a growing demand and the unique requirements of quality, responsive, locally-led adaptation.
Location-tailored project development involves an array of place- and project-specific stakeholders and property owners. Project components often need to be jointly implemented by them, involving local co-investments and co-management. Projects will also often need to be phased and adjusted over extended periods, beyond the normal engagement spans of central government departments and external private investors, as actual localized exposures to changing climate hazards become clear over coming decades within the micro-climates, -habitats, and -hydrology of each project area.
Ultimately, building true climate resilience within any sizable local jurisdiction will involve scores of distinct local project investments. This will require dedicated capacities in subnational and local governments to manage whole portfolios of adaptation projects, offering opportunities to structure finance on a portfolio basis.
Read the complete working paper:
Jeb Brugmann. 2023. Mobilizing Local Public Resources for Locally-led Climate Resilience. Working paper: Resilient Cities Catalyst.
