Current climate change and resilience funding is largely channelled through national governments. In developed countries national governments collect the majority of taxes and they then distribute this money to lower levels of government, research or other institutions to undertake climate change adaptation. In developing countries national governments also have access to multilateral and bilateral funding streams. In both cases, the burden of action currently falls on local governments and the funds are invariably insufficient.
This issue of funding is a recurring theme of the Resilient Cities 2013. Local governments are increasingly considering how to engage private industry and are investigating non-traditional financing models. In order to do this, new ways to value avoided losses and price long-term risks are required.
New York City infrastructure was presented as a case study in this area. Siemens has recently delivered a report estimating the costs and payback periods of investments in ‘smart’ and resilient infrastructure systems. The hope is that this work can justify additional expenditure up front, engage other funding parties and prevent damage from extreme weather events in the future.
Another example was from the Rockefeller Foundation who briefly discussed a model for insurance called ‘hyper local’ insurance. Under this model individual actions could be rewarded with changes to insurance premiums.
Also within this theme Edge Environment presented its work with the Insurance Council of Australia. We have now been working with the ICA for over three years and their projects are leading international examples of private industry taking action on resilience.