• Skip to primary navigation
  • Skip to main content
  • Skip to footer
Headwaters Economics

Headwaters Economics

Independent Nonpartisan Research

  • Research
    • Economic Development
    • Equity
    • Natural Hazards
    • Public Lands
    • Outdoor Recreation
    • Tax Policy
  • Tools
  • About Us
  • Search
Photo: Tim Ruzek

How state and local budgets are vulnerable to climate change

May 2021

How are local and state government revenues vulnerable to climate change? Researchers Mark Haggerty and Dr. Kristin Smith discuss current research on how climate risk destabilizes state and local budgets and constrains access to lending markets. The presentations focus on promising solutions for “climate-proofing” budgets.

This post includes recordings from the March 12, 2021, workshop for the RISA Fiscal Policy & Adaptation Working Group.

Building climate resilience will require predictable revenue streams and long-term solutions.

In this presentation, Dr. Kristin Smith describes how climate-related disasters impact state and local revenue and how some fiscal policies actually discourage climate adaptation. Climate policies should strive to stabilize local revenue, particularly in communities with volatile revenue streams such as from fossil fuels.

Climate adaptation often requires large up-front costs for grey and green infrastructure.

State and local governments issue municipal bonds to finance two-thirds of state and local infrastructure. However, research suggests that bond markets may fail communities at the exactly the wrong time – when communities need the most help in the wake of natural disasters. As rating companies incorporate climate change into their risk calculations, at-risk communities may face higher borrowing costs, reducing their ability to fund adaptation projects. In this presentation, Mark Haggerty sheds light on possible finance solutions, including impact investing and revolving loan funds.

As mentioned by...

WyoFile
Published on May 19, 2021Posted under Climate AdaptationTags: Climate Change Adaptation, fiscal policy

Kris Smith, Ph.D.

  kris@headwaterseconomics.org       802.989.5385

Kris is an applied researcher with a unique ability to understand the connections between public finance, natural resources, and economic development. As part of Headwaters Economics’ FloodWise Community Assistance team, Kris works with local governments and technical experts to help communities reduce flood risk.

Related Research

Building funding strategies for flood mitigation projects
How communities reduce flood risk: five midwestern case studies
Using Economics to Support Climate Adaptation
Neighborhoods at Risk

Footer

Independent Nonpartisan Research

Contact

© 2023 Headwaters Economics, all rights reserved

  • Sitemap
  • Terms of Use
  • Photo Credits
  • Media Coverage
  • Slides
  • Contact
  • Twitter