Finding the Finance

The document outlines a diverse landscape of climate financing for cities, categorised into local internal revenues, external third-party sources, and international funds. Local options include property and land taxes, user fees, development charges, and Tax Increment Financing (TIF), as well as 'intracting' for energy retrofits. External sources feature Energy Performance Contracting (EPC), green bonds, and crowdfunding. International support is available through climate funds like the Green Climate Fund (GCF) and Global Environment Facility (GEF), Multilateral Development Banks (MDBs), and philanthropic organisations, though the authors note that most international funds require cooperation with national governments due to strict fiduciary and creditworthiness standards. The guide emphasizes that while international funds are necessary for large-scale projects, local sources foster greater municipal autonomy and sustainability.

• Local governments can utilize internal revenue sources such as property taxes and land taxes to foster municipal autonomy. Property taxes are common worldwide, while land value taxes can specifically counteract urban sprawl by incentivizing the most profitable use of land.
• User fees can be used not only to raise revenue but to regulate activities and encourage climate-friendly behaviors, such as reducing car traffic through congestion charges.
• Development charges, which are one-off levies on developers for new infrastructure, provide an entry point for integrating adaptation and mitigation measures like LED lighting or water retention areas.
• Tax Increment Financing (TIF) is identified as a tool for redeveloping blighted or damaged areas by using a percentage of future property tax revenues to fund improvements without increasing current taxes for owners.
• Intracting allows cash-strapped local governments to finance energy retrofits in public buildings using the resulting energy bill savings to pay back start-up financing.
• Energy Performance Contracting (EPC) enables cities to install energy-saving measures via a private contractor who is paid back through a share of the guaranteed energy cost savings over 5 to 15 years.
• Green bonds are used for up-front investment in sustainable infrastructure, though access for cities in developing countries is often limited by a lack of creditworthiness.
• International climate funds, such as the Green Climate Fund (GCF), the Adaptation Fund (AF), and the Global Environment Facility (GEF), often require cities to work through national entities or MDBs because cities frequently lack the necessary fiduciary standards for direct accreditation.
• Multilateral Development Banks (MDBs) provide long-term and concessional loans for urban development, often acting as intermediaries for other international funding flows.
• Carbon market instruments, including the Clean Development Mechanism (CDM) and urban cap-and-trade systems, can provide revenue for mitigation projects, though they are generally not suited for initial financing as revenues flow only after project completion.

APA

Junghans, L., Dorsch, L., Brandschwede, A., & Sakofski, R. (2015). Finding the Finance. Climate and Development Knowledge Network. http://cdkn.org/wp-content/uploads/2015/06/FINAL_Finding-the-Finance.pdf

Chicago

Junghans, Lisa, Lukas Dorsch, Arne Brandschwede, and Robert Sakofski. Finding the Finance. Climate and Development Knowledge Network, 2015. http://cdkn.org/wp-content/uploads/2015/06/FINAL_Finding-the-Finance.pdf.

Wikipedia

{{cite report |last1=Junghans |first1=Lisa |last2=Dorsch |first2=Lukas |last3=Brandschwede |first3=Arne |last4=Sakofski |first4=Robert |title=Finding the Finance |publisher=Climate and Development Knowledge Network |date=December 2015 |url=http://cdkn.org/wp-content/uploads/2015/06/FINAL_Finding-the-Finance.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{junghans2015finding, author = {Junghans, Lisa and Dorsch, Lukas and Brandschwede, Arne and Sakofski, Robert}, title = {{Finding the Finance}}, institution = {Climate and Development Knowledge Network}, year = {2015}, month = dec, url = {http://cdkn.org/wp-content/uploads/2015/06/FINAL_Finding-the-Finance.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }