Financing/Funding of Cities’ Climate Actions

Gap Funds.  “City Climate Finance Gap Fund” (Europe). www.citygapfund.org  The City Gap Fund aims to help bridge the urban financing gap to achieve low carbon, climate-resilient urbanization pathways.  Implemented by the World Bank and the European Investment Bank.  “City Climate Finance Gap Fund Completes First Year of Operation With Support to 33 Cities”. 9/23/21. www.worldbank.org Some of the Gap Fund’s most recent activities have taken place in: San Miguelito, Panama; Dakar, Senegal; Mangalore and Kolar, India; Bogota and Santa Marta, Colombia; Chefchaouen, Morocco; Vinnytsia, Ukraine; Campinas and Rio de Janeiro, Brazil; Danane, Ivory Coast; Makindye Ssabagabo, Uganda; 3 cities in Guatemala; and 3 cities in Indonesia.

Global Covenant of Mayors for Climate & Energy. “City Climate Finance” www.globalcovenantofmayors.org/city-climate-finance/   Invest4Cities is the GCoM’s initiative to increase the flow of public and private sector investment in support of urban climate change mitigation and resilience projects. www.globalcovenantofmayors.org/our-initiatives/invest4cities/

Global Innovation Lab for Climate Finance.  Part of the Climate Finance Lab. “Global Innovation Lab For Climate Finance” (GILCF). www.climatefinancelab.org  The GILCF identifies, develops, and launches innovative finance instruments that can drive billions in private investment to action on climate change and sustainable investment.

Green Banks.  “Green Bank Network” www.greenbanknetwork.org  “Coalition for Green Capital” www.coalitionforgreencapital.com  Green Banks are mission-driven institutions that use innovative financing to accelerate the transition to clean energy and fight climate change.  Green Banks help secure low-cost capital for clean energy projects at favorable rates and terms to both traditional and otherwise challenging market segments.  For further information: “Green Banks” www.nrel.gov/state-local-tribal/basics-green-banks.html   “Green Banks Poised For Billions in Climate Funds, Draw State’s Attention” 1/9/23. www.pewtrusts.org  “Establishing a City Green Bank: Best Practice Guide” www.c40knowledgehub.org   “Washington DC Green Bank” www.dcgreenbank.com  “Montgomery County Green Bank” www.mcgreenbank.org  “Assessing the Viability of a Joint Green-Public Bank in San Francisco” 2/10/23. www.sfgov.org

Green Bonds.  Green Bonds can be used to mobilize climate finance at scale by attracting investment from institutional investors and pension funds for both mitigation and adaptation projects.  Examples of where Green Bonds have been used successfully to mobilize climate finance for urban projects include: Cape Town; Johannesburg; Paris, and Tokyo. A Green Bond is a fixed-income instrument designed to support specific climate-related or environmental projects.  Green Bonds may come with tax incentives to enhance their attractiveness to some investors.  Also known as Climate Bonds, Sustainable Bonds.  “How to Issue a Green City Bond: The Green City Bonds Overview”  Dec. 2015. www.c40knowledgehub.org  “US Green City Bonds Coalition” www.climatebonds.net  “How to Decide if Green Bonds Are Right For Your City”  April 2022. www.c40knowledgehub.org

Green Procurement.  Adopting green procurement standards is a growing trend that makes a significant impact by leveraging local governmental purchasing power for achieving sustainability goals.  There is a city government market demand for energy-efficient vehicles, lighting, equipment of all types, and buildings, reducing both upfront costs through the potential for bulk procurement as well as longer term costs for operations, maintenance and replacement.  “Global Sustainability Network Helps Local Governments Share Green Procurement Practices” 2/22/22. www.americancityandcounty.com  “Tools to Help You With Sustainable Procurement”  www.smartcitiesdive.com

Greenhouse Gas Reduction Fund GGRF).  Contained in the Inflation Reduction Act (IRA) of 2022.   “Greenhouse Gas Reduction Fund & Takeaways for Cities” 2/16/23. www.columbia.edu  Associated with the GGRF are 1. The Zero Emission Technologies Grant Program, and 2. The General Assistance & Low-Income & Disadvantaged Communities Grant Program.   “EPA Details Plans For $27 Billion in Inflation Reduction Act Climate Funds”  2/14/23. www.thehill.com  “Greenhouse Gas Reduction Fund” www.law.cornell.edu/uscode/text/42/7434  The GGRF can directly fund local Green Banks and provide the technical and financial assistance necessary to establish new Green Banks or similar institutions.

Inflation Reduction Act (IRA), 2022.  “Climate Mayors and c40 Cities Provide U.S. Cities With Guidebook to Implement Historic Inflation Reduction Act”  10/28/22. www.climatemayors.org  “How Cities Can Make the Most of IRA Dollars” 10/12/22. www.ilsr.org  “How Inflation Reduction Act Funding Could Affect Cities” 12/26/22. www.smartcitiesdive.com  “Inflation Reduction Act: Clean Energy Project Eligibility For Local Governments” www.nlc.org  “San Antonio Hopes to Secure Inflation Reduction Act Funds for Climate Programs” 12/15/22. www.sanantonioreport.org  “Guide to Help Cities Make the Most of Billions in Climate Funds” 11/23/22.  www.governing.com

Invest4Cities. Part of the Global Covenant of Mayors.  www.globalcovenantofmayors.org/our-initiatives/invest4cities/  Invest4Cities is working to provide value to participating cities by mobilizing the critical financing and technical assistance cities require to access investment funds for climate initiatives.

La Rochelle, France.  www.cfl.southpole.com/solutions/laRochelle  Territorial Carbon Aggregation (TCA).  TCA is a technical and finance platform intended to develop small scale projects in favor of the urban community’s carbon neutrality. Its principle is the creation of a cooperative tool for the issuance and sale of carbon credits at the municipal level. “Carbon Neutrality and Carbon Finance” 10/14/20.  www.fedarene.org  The Agglomoration of La Rochelle (ALR) in France consists of 28 municipalities and 170,000 inhabitants.  ALR has set itself the goal of becoming a zero-carbon territory by 2040.  Re. carbon finance, ALR’s ambition is to create a local carbon aggregator which would allow carbon credits to be aggregated and sold on a local market for voluntary carbon compensation.

Land Value Capture (LVC). LVC is a policy approach that enables communities to recover and reinvest land value increases that result from public investment and government actions. LVC is rooted in the notion that public action should generate public benefit.  “Leveraging Land For Financing Climate Action”  www.daringcities.org  “Building a Global Compendium on Land Value Capture”  www.oecd.org/cfe/cities/land-value-capture.htm   “Exploring the Use of Land Value Capture Instruments for Green Resilient Infrastructure Benefits” www.lincolninst.edu

LandGate. www.landgate.com  LandGate is a company that works with governments at all levels to identify opportunities to monetize public land through new revenue streams from renewable energy resources. www.landgate.com/government  “How Can Landowners Make Money From Carbon Credits?” www.landgate.com

Leadership For Urban Climate Investment (LUCI). www.citiesclimatefinance.org/about/luci  LUCI is a framework to promote collaboration between initiatives aiming to close the urban climate finance gap and to track their contribution toward green and climate-resilient cities.  The LUCI framework is structured around 4 targets reflecting the value chain for urban climate finance, including capacity building, project preparation, and linking to finance.

Lisbon, Portugal.  “Participatory Budgets” (PB). www.cfl.southpole.com/solutions/lisbonGreenPB  PB is a democratic process in which citizens have the power to decide the destination of public investment through the submission of citizen-based or private sector proposals and a voting process. Lisbon launched The Lisbon Climate Citizen Commitment as an initiative led by the local government aiming at the integration of climate projects into its PB via a “Green Seal” seeking to attract  new private funding sources.

Local Financing Authorities.  Boston’s “Renew Boston Trust”  www.boston.gov/environment-and-energy/renew-boston-trust  New York’s “Green Housing Preservation Program”.  www.nyc.gov  NY also invests its pension funds to achieve climate goals. Washington DC: the DC Green Bank serves as a central access point for several innovative local climate finance programs.  www.dcgreenbank.com

Long Beach CA.  In 2020 voters in Long Beach passed the Barrel Tax – an increase to a fossil fuel barrel production tax to support climate and community programs. www.longbeach.gov/citymanager/measure-us/

Low or No Emission Grant Funding.  “The Purpose of the Low-No Program” www.transit.dot.gov  “Lo-No” is a program of the U.S. Federal Transit Administration (FTA).  It supports the transition of the nation’s transit to the lowest polluting and most energy-efficient transit vehicles.  It provides funding to state and local government authorities for the purchase or lease of zero-emission and low-emission transit buses and supporting facilities.

Miami FL’s Miami Forever Bond. “Miami Forever Bond” www.miamigov.com The Miami Forever Bond is a $400 Million general obligation bond that is being used to make Miami more resilient to sea level rise and to more frequent and extreme storms.

National Association of State Energy Officials.  “Energy Financing” www.naseo.org/issues/energy-financing/

New Orleans LA.  “Establish a Regional Green Bank With Finance New Orleans”.  From the report: “Net Zero by 2050: A Priority List For Climate Action in New Orleans”  Dec. 2022. www.nola.gov  See also www.financenola.org

One-Time Investments.  Chicago Il.  The City’s 2022 Climate Action Plan includes an analysis of climate-related Recovery Plan investments, which total $188 Million.  Sacramento CA.  Appendix D of Sacramento’s Preliminary Climate Action and Adaptation Plan includes a diverse and comprehensive set of financing options.

PACE.  Stands for Property Assessed Clean Energy. PACE is an innovative mechanism for financing energy efficiency and renewable energy projects on private property.  There are commercial PACE programs (C-PACE) and residential PACE programs (just plain PACE, or R-PACE). “Property Assessed Clean Energy: A Popular Tool For Climate Investments” 2/22/23. www.brookings.edu  Also: www.energy.gov/scep/slsc/property-assessed-clean-energy-programs  and www.pacenation.org  “Local PACE Programs” (6 programs)  2/22/23. www.brookings.edu

1. Atlanta GA.  Atlanta’s Climate Action Plan – 2016 – highlights PACE as a key financing strategy for its building efficiency goals.

2. Cincinnati OH. The Green Cincinnati Plan includes a goal to increase the number of PACE projects completed in that city.

3. Columbus OH. Columbus’ 2021 Climate Action Plan emphasizes the success of its PACE program to date; targets $250 MIllion in annual PACE investments by 2030; and aims to pair these investments with the establishment of a Green Bank by 2025.

4. Dallas TX. The 2020 Dallas Comprehensive Environmental and Climate Action Plan commits to developing a landing page and a “comprehensive educational program” for building owners and tenants to learn about energy efficiency programs, including the City’s PACE program.

5. Kansas City MO. The 2022 Short Term Implementation Plan for K.C.’s Climate Protection and Resiliency Plan includes PACE as a planned financing strategy for grid stability, resilience, and residential energy efficiency.

6. Orlando FL. Orlando’s 2018 Community Action Plan celebrates $500 Million in financing in its PACE program’s first 2 years. The Plan also highlights Orlando’s utilization of $17.5 Million in Green Bonds to improve energy efficiency in 55 municipal buildings.

Portland OR.  In 2018 Portland’s voters passed the Clean Energy Community Benefits Fund, a tax projected to bring in $44 to $61 Million annually to fund climate action. “Portland Clean Energy Community Benefits Fund” www.portland.gov   The tax places a 1% gross receipts tax on large retailers that make $1 Billion or more in gross sales nationally.

A Price on Carbon.  “How Cities Can Put a Price on Carbon” Feb. ‘22. www.c40knowledgehub.org  Covers such topics as emission trading systems, carbon taxes, other types of charging, and standards and regulations.

Production Tax Credits (PTCs). A PTC is a U.S. Federal income tax credit available to owners and operators of electric generation facilities that produce electricity from “qualified energy resources”.  These include wind, geothermal, solar, and hydropower. www.lawinsider.com/dictionary/production-tax-credits  To see where tax-exempt entities, such as local governments, can be involved, see Direct Pay Credits.

Resilience Bonds. Resilience Bonds guarantee help to a city after a catastrophe.  They fund projects and strategies needed to become less vulnerable.  “Resilience Bonds: A Secret Weapon Against Catastrophe” 5/15/17.  www.bbc.com  Also: “Resilience in Urban Transport” 9/25/17. www.worldbank.org

Sacramento CA.  Appendix D of Sacramento’s Preliminary Climate Action Plan.  Described by Brookings Institute as “a diverse and comprehensive set of financing options”.  Only way to bring this up is: www.cityofsacramento.org/-/media/Corporate/Files/CDD/Planning/Major-Projects/18-06051_Sac-CAAP_PreliminaryDraft_062922.pdf?la=en According to the City’s website, further information can be obtained at cap@cityofsacramento.org

San Francisco CA.  “Funding San Francisco Climate Action”  “Strategies for Revenue, Implementation, and Equity”  Berkeley Law.  Center for Law, Energy, and the Environment (CLEE).  www.law.berkeley.edu  2022.  The CLEE report analyzes funding and financing strategies to generate sufficient revenue for S.F.’s Climate Action Plan while advancing equity and ensuring smart implementation.

Seattle WA area.  Carbon credits raise $$ from newly planted trees for a Seattle nonprofit organization called The Mountains to Sound Greenway

Shift Cities. “How to Decide if Green Bonds Are Right For Your City” www.shiftcities.org  Green Bonds can provide attractive financing options for climate projects. But bond issuance is not possible in every context. This guide explains how to decide if Green Bonds are the right option for your city.

Six.  “Six Ways For Cities to Drive Climate Investment” May ‘22. www.c40knowledgehub.org  “6 Innovative Ways to Fund Climate Action and Equity in US Cities” 5/6/21. www.wri.org

State and Community Energy Programs – U.S. Federal Level. www.energy.gov/scep/community-energy-programs. Programs directly benefitting city and other local government units include: 1. Energy Efficiency and Conservation Block Grant Program: assistance to states, local governments, and tribes to further strategies for improving energy efficiency; 2. Public School Grants: grants for energy efficiency improvements at public school facilities; and 3. Technical Assistance for the Adoption of Building Energy Codes: grants to states or to units of local government to adopt updated building energy codes or zero energy codes.

State and Local Solution Center. U.S. Federal Level. 4.5: Implementing and Financing City Climate Action Plans. P. 19.

Subnational Government Climate Finance Hub – a division of the OECD – the Organization for Economic Cooperation and Development.  HQed in Paris, France.  The U.S. is a member. www.oecd.org/regional/sngclimatefinancehub.htm  The SGCFH looks at climate expenditure tracking, climate revenue tracking, and subnational green budgeting.

Territorial Carbon Aggregation (TCA). See LaRochelle, France.

The ATLAS.  “Browse Local Government Case Studies” www.the-atlas.org  Select “Greenhouse Gas Reduction for Buildings, Fleet Management, Energy Efficiency, Renewables, and Carbon Offsets”.

www.energy.gov/scep/slsc/state-and-local-solution-center  The SLSC is a resource hub for states, local governments, and K-12 school districts.  It highlights various technical assistance opportunities to help an organization reach its energy efficiency and renewable energy goals. See further details in resources available for assisting cities’ climate finance at www.energy.gov/scep/slsc/all-state-local-solution-center-resources

Tokyo, Japan.  A Cap & Trade carbon trading system was launched in Tokyo in 2010.  It covers the top 1400 GHG emitters in that city, and is enforced and overseen by the Tokyo Metro Government.  “Tokyo Cap and Trade Program” www.oecd.org/env/cc/47514572.pdf

Toronto, Ontario, Canada.  “Climate Action Fund” (CAF) www.toronto.ca  The Toronto CAF supports community-led projects, activities, and events that directly or indirectly reduce the harmful emissions that contribute to climate change.

Trust. (www.mtsgreenway.org)  The Trust recently cleared out 2.5 acres of invasive weeds and planted 2000 trees.  A Seattle-based nonprofit called City Forest Credits (www.cityforestcredits.org) is the registry that calculated how much carbon is absorbed at the site.  A company called Regen Network Development (www.regen.network) then paid $1 Million+ to buy up all of the City Forest Credits.  “Focus on Carbon Credits From Urban Forests” 10/4/22. www.npr.org

United Nations Framework Convention of Climate Change (UNFCCC). The UNFCCC established an international environmental treaty to combat dangerous human interference with the climate system, in part by stabilizing GHG concentrations in the atmosphere. It was signed by 154 states at the U.N. Conference on Environment and Development (known as the Earth Summit) in Rio de Janeiro in 1992.  HQed in Bonn, Germany. “Climate Finance and Sustainable Cities” www.unfccc.int

United Nations Habitat.  The U.N. Human Settlements Program, generally referred to as UN-Habitat, focuses on sustainable urban development.  “Guiding Principles for City Climate Action”  www.e-lib.iclei.org

Urban Shift. www.shiftcities.org  “Climate Finance” www.shiftcities.org/topic/climate-finance  See their case studies, reports, guides, briefs, toolkits, and publications on climate finance, including: Banking on a Green and Just Recovery; Transformative Actions Program; How to Decide if Green Bonds Are Right For Your City; Bankability Checklist; Successful Local Government Fundraising and Project Pitching; How Cities Can Attract Investment For a Green and Just Recovery; Paying For Bike-sharing Systems; Climate Finance Glossary; and Handbook for Urban Infrastructure Finance.

Urban Sustainability Directors Network (USDN). The USDN strives to create equitable, resilient, and sustainable communities by advancing the field of local government sustainability and by equipping practitioners to be catalysts of transformative change.  “Funding and Financing Climate Action Plans” 2019. www.usdn.org  “Financing Sustainable Cities Scan and Toolkit”  “A Scan of Financing Mechanisms, Key Metrics, and Potential Funders For Climate Action”. Oct. 2016. www.usdn.org/products-government.html

Various Articles, Reports, etc., re. cities and the financing of climate action: “On Climate Change, This Group of Mayors Thinks Globally and Acts Locally”. 3/17/23. www.smartcitiesdive.com  “A New Way to Finance Solar: Selling Emissionality Offsets”.  9/20/21. www.canarymedia.com   “How States and Cities Can Benefit From Climate Investments in the Inflation Reduction Act”  Aug. ‘22. www.c40knowledgehub.org  “Energy Efficiency Funding Opportunities For Municipalities and Public Schools” www.energiasaves.com

World Bank’s Carbon Partnership Facility (WBCPF). www.wbcarbonfinance.org  The WBCPF brings together buyers and sellers of carbon credits, with the goal of enabling carbon finance to support low-carbon development in developing countries.  It facilitates the development of emission reduction programs and creates carbon assets across an array of sectors and technologies – from energy generation and distribution, to transport and waste management.  See also: Gap Funds.

World Resources Institute (WRI). “6 Innovative Ways to Fund Climate Action and Equity in US Cities” www.wri.org  The 6 cases cited are: 1. Denver CO sales tax approach and Cincinnati OH’s transit-oriented sales tax approach; 2. Portland OR retail tax approach;  3. Long Beach CA fossil fuel production tax approach; 4. Boulder CO electricity tax approach and Albany CA energy consumption tax approach; 5. Miami FL climate bonds approach; and 6. NY Metropolitan Transit Authority’s resilience bonds approach.

WSP.  www.wsp.com  WSP is a globally recognized professional services firm providing strategic advisory, engineering and design services to clients in the areas of transportation, infrastructure, environment, building, power, energy, water and resources.  WSP’s Net-Zero Cities Team works with municipal clients around the world to provide evidence-based net-zero strategies that enable towns, cities and regions to meet their ambitious climate targets.  HQed in London UK.