The Resilience Industry Has a Government Problem. Here's What Climate Week Taught Me.
The annual pilgrimage to New York features more adaptation programming but still misses the mark in two key ways.
I left New York Climate Week with two ideas that I could not shake. First, the resilience industry has not made a compelling enough financial case to governments. Second, we have made resilience projects unnecessarily complicated to finance.
These observations are connected. We have spent years developing sophisticated ways to measure climate risk, quantify avoided losses, and structure financial transactions. Yet we have struggled to translate that work into something governments can incorporate into their existing financial decisions.
The result is an industry that has become good at explaining why resilience matters but considerably less effective at explaining why a government should pay for it.
1. We Haven't Made the Right Value Proposition to Government
State and local governments are already among the largest investors in resilience. They build roads, maintain water systems, finance public facilities, and invest in infrastructure that must withstand whatever the future brings. They do this through budgets, capital improvement plans, municipal bonds, and established public financing mechanisms.
And, for the most part, they are reasonably good at it.
But resilience is rarely the primary reason these investments happen. A government replaces a bridge because it needs replacing. It upgrades stormwater infrastructure because flooding affects neighborhoods. Resilience may influence the design, location, or construction standards, but it is typically a secondary consideration within an investment justified on other grounds.
Governments finance resilience as a second-order outcome of their ordinary responsibilities, not as a distinct investment category.
I don't think this reflects a failure of government. It reflects a failure of our industry to understand how government makes financial decisions.
Much of the resilience conversation begins with a hazard: Here is the flood risk. Here is the projected economic damage. Here is the infrastructure that needs protection. From there, we demonstrate the benefits of reducing that risk.
But governments do not make investment decisions based on avoided physical damage alone. They make decisions based on public service obligations, budgetary capacity, revenue stability, fiscal exposure, and competing priorities.
A finance director needs to understand what an investment means for the operating budget, debt capacity, tax base, and long-term financial position. A governing body needs to explain why spending money today produces a better financial or public service outcome tomorrow.
If resilience investments cannot answer those questions, they will continue competing unsuccessfully against projects that can.
Rather than asking governments to adopt a new investment philosophy, we should demonstrate how resilience supports their existing financial objectives.
What does flood mitigation mean for future emergency expenditures? How might stronger building standards protect the property tax base? Could infrastructure investments reduce demands on reserves, limit revenue disruptions, or preserve borrowing capacity?
These are not abstract climate questions. They are public finance questions. And they offer a more compelling entry point than simply telling governments climate change will be expensive.
2. We Need to Stop Making Resilience Projects So Complicated
My second takeaway is that we have made financing resilience unnecessarily difficult.
Across the industry, enormous attention goes toward identifying dedicated revenue streams, monetizing avoided losses, creating financial instruments, and assembling transactions involving multiple beneficiaries.
Some innovation is valuable, particularly where traditional financing cannot capture a project's benefits. But we have started treating financial complexity as a prerequisite for resilience investment.
It isn't.
Municipal finance has funded infrastructure for generations without requiring every project to produce a dedicated revenue stream. Governments routinely appropriate general fund dollars, issue general obligation bonds, and finance public assets based on broader fiscal capacity.
Why should resilience be fundamentally different?
Consider a $100 million flood mitigation project. The conventional conversation might begin by asking how to monetize avoided losses, establish dedicated revenues, or create a financing entity.
I would begin with a simpler question: What would it take to convince the local government to commit $50 million?
Perhaps it appropriates general fund resources. Perhaps it issues debt supported by its existing credit. Perhaps it integrates the investment into its capital improvement plan.
The government does not necessarily need a new financing mechanism. It needs a compelling financial justification to use mechanisms it already has.
And critically, it does not need to pay for the entire project…
Government as the Anchor Investor
Rather than asking governments to shoulder the full cost of resilience, we should position them as anchor investors whose commitments make broader transactions possible.
At an event last week in Boston, a crowd of engaged commercial real estate developers weighed in on the way in which Boston was going to solve for its multi-billion dollar resilience gap. Leading the after-lunch program was a lawyer who works in project finance and that person spent her 45 minutes discussing a Florida wastewater project that was clearly a feather in the cap. Hidden in the flow chart was a diamond shape that said in it “75% of the project was financed through the city’s credit.” Municipal bonds may be boring, but they carry water - and more importantly, it's the lowest cost of capital available.
Imagine a local government commits to funding half of a flood mitigation project. That commitment establishes credibility, demonstrates public purpose, reduces the remaining capital requirement, and creates a foundation for other beneficiaries to participate.
A utility might contribute because the project protects infrastructure. A major employer might participate because it reduces business interruption risk. A hospital or university might benefit from maintaining access and operations. Insurers, state agencies, or philanthropic institutions might identify additional reasons to contribute.
Not every beneficiary will seek a financial return. Some contributions may be grants, others contractual payments, and others investments. But the organizing principle remains: Start with the public financial commitment, then structure participation around those who benefit.
This reverses much of the current resilience finance conversation. Instead of spending years assembling beneficiaries to justify a project, we begin with the institution that already has the mandate, financing capacity, and accountability to act.
The Real Challenge Is Repeatability
The question I keep returning to is not how to finance one extraordinary resilience project. It is how to make ordinary resilience investments happen thousands of times.
If we can establish a repeatable framework through which governments justify and finance 50 percent of a project, we create a practical starting point for the market.
The public share will vary, but the principle remains: government financing can anchor a broader capital stack rather than serve as the financing source of last resort.
This is why better public-sector financial analysis matters. Through Resilient America, we are working to translate physical hazards into financial risks governments can understand and manage. The RiskReserve Tool, developed with the Government Finance Officers Association and Earthena, is one effort to establish that common financial language.
Quantifying exposure in terms of revenues, expenditures, and reserves creates a basis for deciding what risks to retain, transfer, or mitigate, and for engaging others who benefit from those investments.
I left Climate Week convinced that the next breakthrough may not come from a new financial product. It may come from learning to speak the language of government finance. America already has an enormous public finance system capable of mobilizing capital at scale. The resilience industry doesn't need to replace it. It needs to work within it. We don't need to convince governments to become resilience investors. They already are. We need to give them a better reason to invest more, and a simpler way to bring others along.
