Financing Climate Action
The scale of action demanded to mitigate and adapt to climate change and create resilient communities requires trillions of dollars of investments, in addition to fiscally healthy local governments that can act boldly. Mainstreaming climate-informed decision-making and scaling up climate investments requires land markets and land use regulations to accurately reflect climate risks and mitigation targets. New opportunities for climate financing can be found in land-based finance tools such as special assessments, impact fees, and property tax. When implemented, these tools can improve the fiscal health of cities and help close the global climate finance gap, enabling local governments to respond to urgent local needs exacerbated by climate change.
Yet the climate crisis cannot be solved with money alone. Foresight and urban development will be needed to move people and assets out of harm’s way, protect valuable natural lands that are carbon sinks and buffers to climate impacts, and site new infrastructure to support a decarbonized economy. Such changes in land use must be carefully navigated to avoid further exacerbating inequalities compounded by climate change. Against these challenges, land-based finance, particularly land value capture, emerges as a powerful tool that not only provides a source of financing, but also aligns urban development with objectives for equity and climate resilience.
We are researching ways to fund urgent climate investments through land-based financing tools, documenting and disseminating best practices, and working with partners to provide technical assistance to support on-the-ground implementation. We also evaluate public climate funding sources and emphasize the importance of leveraging both public and private investments to meet climate goals.
Unlocking Climate Resilience Through Land Value Capture
How can land value capture be used to fund essential climate action in cities globally? Through more than a dozen case studies around the world, this StoryMap explores the dynamic relationship between climate risk and land values, the potential for land value capture to promote climate action, and real examples of how places are using this tool to build a climate-resilient future.
Land Value Capture Tools for Climate Change Adaptation and Disaster Risk Reduction
Cities and regions worldwide face increasing challenges from climate change and disaster risks, including sea level rise and flooding, heat waves, and extreme storms. Addressing these threats requires innovative urban planning and sustained, reliable investment. Yet conventional funding sources—such as intergovernmental transfers, debt financing, and donor support—remain limited and often insufficient; only 9 percent of global climate finance goes toward climate adaptation, despite the increasing need.
Our work aims to better understand and document the impact of climate adaptation and disaster risk management on land markets, to establish the evidence base needed to support the use of land value capture in this context. We are also evaluating and developing tools and methods to operationalize climate resilience finance by using land value capture, including legal and institutional approaches. Through case studies, we are documenting and demonstrating real examples of land-based climate finance instruments in action.
Related Publications
Examining Opportunities and Challenges for Implementing Land-based Financing Instruments for Funding Climate Action
Cynthia Goytia Land Policies, Urban Law, and Climate Change
Melinda Maldonado, Safira de la Sala, Rachelle Alterman, Giovanni Andrés Pérez Macías, and Roberto Arazo Silva
Exploring the Use of Land Value Capture Instruments for Green Resilient Infrastructure Benefits
Stelios Grafakos, Alexandra Tsatsou, Luca D’Acci, James Kostaras, Adriana Patricia López Valencia, Nohemi Ramirez Aranda, and Barbara Summers