The public and the private sectors often face challenges accessing capital and financing for climate resilience projects and justifying the upfront costs to taxpayers or shareholders. Building resilience, a long-term need, competes for resources with other more immediate objectives, and determining and communicating long-term benefits is challenging.
State and local governments struggle to invest in already needed repairs in infrastructure, while an expected increase of natural disasters and environmental stresses on infrastructure bring into focus a rising cost of maintaining climate-resilient facilities and infrastructure. In some cases, more resilient elements (like green infrastructure and efficient energy systems) can lower maintenance and operating costs for local and state governments, but those savings are realized over time. And the long-term benefits of avoiding disaster costs are challenging to quantify. Some resilience initiatives have nonmonetary benefits like reducing risk to the population or protecting culturally valuable elements like historical buildings or recreational spaces, requiring upfront costs that are unlikely to be recouped.
Businesses face the same impacts as cities and states, with differing challenges. Larger businesses that rely on complex international or geographically diverse supply chains and consumers may need to consider a wide range of impacts in multiple areas.
Cities and businesses around the world are leveraging innovative finance mechanisms like emissions trading systems, green bonds and climate funds to pay for necessary infrastructure updates and initiatives.
Many resilience initiatives are not necessarily additional expenditures. Most resilience strategies are combined with existing operations or already needed renovations of facilities, updates to town planning documents and business management decisions. Building resilience into these processes requires a different planning that threads consideration of climate impacts in decision making. For the resilience measures that do require daunting upfront investments, there are a number of funding options, depending on the project: