To adapt to climate change most communities will require the capacity and partnerships to prepare, finance, deliver, and manage scores of locally-led adaptation projects. Yet few cities and communities—even those with the greatest capacities and powers—have established the unique capacities and instruments required for such scaled investment.

Adaptation finance is not traditionally seen as profitable enough to attract private funding. The perceived lack of viability has resulted in adaptation investments being confined to public development finance and concessional loans. Currently only 1.6% of adaptation funds come from the private sector. One key barrier is that investors find it difficult to know what to invest in, and how to assess the investment’s success. Adaptation metrics can be difficult to grasp - they are not straightforward like reductions in carbon emissions. And local governments need to understand the language investors use and learn how to present adaptative practice and resilience as an investment opportunity.

At the same time, local governments often underutilize their existing resources—regulatory powers, revenue streams, assets and procurements—to fund resilience projects and to leverage external finance on terms that are locally beneficial and accountable. Considering the large number of adaptation investments that will be needed to build climate resilience in any particular city or town, local and regional governments will likely need to establish specialized local units or institutions to design financeable projects and to structure financing for whole portfolios of adaptation projects and investments.

This session is part of the The governance of the new crises: managing and funding resilience in Europe stream.