Financing climate-resilient infrastructure: A political-economy framework

Arbeitspapier

Urban infrastructure investment is needed for both, mitigation of climate risks and improved urban resiliency. Financing them requires the translation of those benefits into measurable returns on investment in the context of emerging risks that capital markets can understand and appreciate. This paper develops a generic framework to identify what are the necessary and sufficient factors to economically favor climate-change resilient infrastructure in private investment decisions. We specifically demonstrate that carbon pricing alone will not generate the needed will, because market prices at present systematically fail to account for climate change risks such as the costs of stranded assets and the national and local co-benefits of investments in climate resiliency. Carbon pricing is necessary, but not sufficient for an enhanced private financing of climate-resilient infrastructure. The Paris Agreement and other supra-local policies and actors including city networks can concretely help to generate the sufficient social and political will for investments into climate change mitigation and resiliency at the city level.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: UFZ Discussion Paper ; No. 1/2019

Classification and Topics

• Classification: Wirtschaft
• Subject: infrastructure ; urban finance ; resilience ; low carbon economy ; city networks ; Paris agreement ; carbon pricing ; Infrastruktur ; Finanzierung ; Resilienz ; Klimaneutralität ; Städte ; Akteursnetzwerke ; Parisabkommen ; CO2-Bepreisung

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Meyer, Peter B. ; Schwarze, Reimund
• Event: Veröffentlichung
• (who): Helmholtz-Zentrum für Umweltforschung (UFZ)
• (where): Leipzig
• (when): 2019

Further information

• Handle: http://hdl.handle.net/10419/193788
• Last update: 10.03.2025, 11:46 AM CET