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| Elevated Metro Rail, Sukhumvit Road, Bangkok, Thailand |
The ability of cities to successfully address
climate change will be pivotal to limiting global warming to 1.5 degrees
Celsius.
There is a desperate need and a small window of opportunity to build new climate-smart infrastructure in our cities that will enable a low carbon and resilient way of life.
When considering the additional costs of selecting low carbon, climate resilient options, it is clear that there is an immense need for urban infrastructure investment.
City budgets, as they are set up currently, will be unable to finance climate investment at the required scale. Still, cities can narrow the funding gap by using indirect financing and using policies and incentives to lure private sector financing.
Here are some practical examples of climate-smart financing instruments that cities have used around the world.
Our future and that of our planet depends on
innovative financing of cities.
municipal funding sources
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1 |
Intergovernmental Grants |
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2 |
Budget Capture (Retained Savings) |
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• SLOVAK: EE
Project Costs Funded From General
Municipal Revenues |
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3 |
Climate Tax and Carbon Pricing |
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4 |
Land Value Capture (LVC) |
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• HONG KONG:
Financing Of Transit Systems and Adjacent Real-estate Development |
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5 |
Transferable Development Rights |
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6 |
Property Tax Abatement |
• NEW YORK: Property
Tax Abatement to Properties That Use Solar Power |
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• CINCINNATI, Ohio:
Property Tax Abatements and Exemptions to Green Certified Properties |
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7 |
Revolving Loan Funds |
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municipal financing options
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8 |
Development Municipal Loan and Credit Lines |
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• SLOVAKIA
Municipalities: Dexia Banka Credit Line for Financing Municipal Projects |
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9 |
Green Bulk Procurement and Pooled Financing |
• TAMIL NADU
Municipalities: Finance for Water and Sanitation Services |
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• SANTIAGO:
Electric-buses Bought By Utility and Leased to Operators |
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10 |
Results-based Financing and “Pay for Success” Model |
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• WASHINGTON D.C.:
Finance Flood Preventing Nature Based Solutions |
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11 |
Green City Bonds |
• JOHANNESBURG:
Finance Renewables, Electricity From Waste Gas & Hybrid Buses |
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• HAWAII:
Securitized Green Bonds for Consumers Loans to Fund Solar PV Panels |
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12 |
Municipal Bonds |
• PUNE: General
Obligation Bonds for Smart-metering Of Water Consumption |
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• TLALNEPANTLA DE BAZ (Mexico):
Project Revenue Bonds for A Water Conservation Project |
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13 |
Reserve Fund Or Revenue Intercept |
• MEXICO
Municipalities: Revenue Intercept Mechanisms to Create Credit |
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• TAMIL NADU Municipalities:
Debt Service Reserve Fund for Water and Sanitation |
indirect or non-municipal city financing
