Six Innovative Funding Methods to Achieve Climate Action and Equity in US Cities

The briefing outlines six funding models—sales taxes, retail taxes, fossil fuel production taxes, electricity consumption taxes, climate bonds, and resilience bonds—that US cities have implemented to fund climate action. It highlights specific examples from cities like Denver, Portland, and Miami, emphasizing that integrating equity into the design of these funding streams is essential for success, particularly for Black, Indigenous, Latino, and low-income communities who are disproportionately affected by pollution and climate change.

• US cities are implementing diverse tax-based funding models to support climate and equity goals, including sales taxes in Denver and Cincinnati, a gross receipts tax on large retailers in Portland, and a fossil fuel barrel production tax in Long Beach.
• Electricity consumption taxes are used to fund climate initiatives while minimizing the burden on low-income residents; Boulder's carbon tax targets industrial customers most heavily, and Albany's energy consumption tax exempts designated low-income residents.
• Municipalities utilize climate and resilience bonds for large-scale infrastructure; Miami's $400 million Forever Bond focuses on sea level rise and extreme storms with equity as a guiding theme, while New York's Metropolitan Transportation Authority uses resilience bonds for power infrastructure.
• Effective equitable climate funding requires intentional design, including early community inclusion in planning, tax structures that protect low-income members, transparent fund allocation, and messaging that links carbon and equity.

APA

RMI (2021). Six Innovative Funding Methods to Achieve Climate Action and Equity in US Cities. https://rmi.org/resources/six-innovative-funding-methods-to-achieve-climate-action-and-equity-in-us-cities/

Chicago

RMI. Six Innovative Funding Methods to Achieve Climate Action and Equity in US Cities. 2021. https://rmi.org/resources/six-innovative-funding-methods-to-achieve-climate-action-and-equity-in-us-cities/.

Wikipedia

{{cite report |author=RMI |title=Six Innovative Funding Methods to Achieve Climate Action and Equity in US Cities |date=6 May 2021 |url=https://rmi.org/resources/six-innovative-funding-methods-to-achieve-climate-action-and-equity-in-us-cities/ |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{rmi2021six, author = {{RMI}}, title = {{Six Innovative Funding Methods to Achieve Climate Action and Equity in US Cities}}, institution = {RMI}, year = {2021}, month = may, url = {https://rmi.org/resources/six-innovative-funding-methods-to-achieve-climate-action-and-equity-in-us-cities/}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }