Local officials use the same lever again and again, but it’s not enough - or sustainable.

How Green Debt Is Reshaping Property Taxes in U.S. Cities

As American cities confront the escalating threats of climate change—from rising seas to intensifying storms—they are turning to climate and green bonds to finance critical infrastructure upgrades. While these instruments are designed to promote sustainability, they also carry financial implications for residents, particularly in the form of increased property taxes.

Despite unprecedented global investments in sustainability, renewable energy, and decarbonization, the planet continues to warm, seas continue to rise, and storms grow more frequent and ferocious. The sobering reality is that mitigation alone cannot shield humanity from the mounting impacts of climate change. The coming decades will demand a strategic pivot: from merely preventing climate change to adapting to its unavoidable consequences.

“Offsets do not prevent or undo the harms caused by burning fossil fuels,”

In recent weeks, U.S. Treasury yields have climbed sharply, with the 10-year note nearing 4.6% and the 30-year bond surpassing 5%. This upward movement, driven by a combination of inflation concerns, fiscal policy debates, and shifting investor sentiment, is poised to impact borrowing costs across the nation, particularly for local governments seeking to finance infrastructure and public service projects resulting from past and projected severe weather.

In the wake of significant federal funding cuts to climate resilience initiatives, local governments across the United States are grappling with the financial burden of safeguarding their communities against the escalating threats posed by climate change. With traditional sources of federal aid diminishing, municipalities are increasingly turning to bonds to finance essential infrastructure projects. However, this shift places the repayment responsibility squarely on local property owners and small businesses, leading to anticipated increases in property taxes.

In a move that has raised alarms among climate scientists and emergency management officials, the National Oceanic and Atmospheric Administration (NOAA) announced on Friday that it will cease updating its Billion-Dollar Weather and Climate Disasters database beyond 2024. The database, which has tracked the cost of extreme weather events since 1980, has been a critical tool for understanding the economic impacts of climate change-induced disasters such as hurricanes, wildfires, and floods. NOAA cited staffing cuts and shifting policy priorities under the Trump administration as reasons for the decision.

For nearly two decades, carbon credits have been the go-to tool for companies and governments seeking to paper over their environmental sins. By purchasing credits that ostensibly fund emissions reductions elsewhere—planting trees, preserving rainforests, or financing renewable energy in the developing world—polluters have been able to claim carbon neutrality without curbing emissions at source. The global carbon offset market surpassed $2 billion in 2023, yet its credibility is eroding fast.

America’s municipalities are facing a storm that no budget committee can ignore: the rising costs of severe weather. In 2023 alone, the United States experienced 28 weather and climate disasters, each costing over a billion dollars, making it the most expensive year on record for natural catastrophes (NOAA Climate.gov, 2024). As hurricanes, wildfires, and floods become more frequent and severe, local governments are struggling to balance recovery costs, infrastructure investment, and growing fiscal pressures.

As hurricanes intensify, floods grow more frequent, and wildfires ravage entire regions, the financial strategies traditionally employed to cope with climate-related disasters are buckling under pressure. Direct government aid, insurance mechanisms, and debt instruments like bonds, which have historically served as the bulwarks of climate resilience, are proving increasingly inadequate. With each passing storm season, it becomes clear that these tools alone cannot meet the rising financial demands of climate repair. This growing gap has sparked a conversation about the viability of a fourth financial lever: tax-incentives through charitable, tax-deductible donations, which may be the only remaining tool capable of closing the climate resilience funding gap.

Climate change is not only reshaping the physical landscapes of cities but also destabilizing the financial foundations that support them. Municipal bonds, long considered a bedrock of safe investment, are being flooded with a deluge of climate resilience and repair spending bonds. As cities scramble to protect themselves from rising seas, ferocious storms, and relentless wildfires, the scale and urgency of these initiatives are swamping the municipal bond market, revealing the pressing need for private capital to bridge the growing gap between bond issuances and the actual costs of climate adaptation.

Beach renourishment, the process of adding sand to eroding beaches, is a widespread response to the creeping threat of coastal erosion. It is a solution with significant economic, environmental, and social implications, drawing both praise and criticism. As climate change intensifies and sea levels rise, this practice has become increasingly prominent. Evaluating its merits and drawbacks requires a nuanced understanding of its implementation across various locations.

As the impacts of climate change continue to escalate, communities, governments, and organizations around the world are increasingly recognizing the need to build resilience to withstand and adapt to these challenges. A well-crafted climate resilience strategic plan is essential for guiding efforts to enhance resilience and mitigate the risks posed by climate-related hazards. Drawing on examples and resources from published climate resilience plans, here are the top 10 priorities that such a plan should address:

As climate change continues to accelerate homeowners should look beyond just traditional property insurance. Below is a summary list of other types of insurance available. Check with your agent before the next storm hits.