Dan Gelber, the mayor of Miami Beach, Florida, says climate change will be a homeowners’ worst nightmare.
"If you own a home and you find that your roof has a problem or you find out there’s a termite infestation, you have to take care of it," he said. "That’s what climate change is. Sea level rise has created challenges that have to be addressed. For local governments, they don’t go away unless you do something about them."
That’s why Miami Beach, where frequent flooding prompted by high tides have illustrated the risks of climate change, is asking residents for the power to pump more money into environmentally-friendly sidewalks, parks, and neighborhood improvements. The $439 million bond proposal would use a fourth of the proceeds to address the effects of climate change.
Nationwide, states and local governments are asking voters to approve billions of dollars of debt for environmental projects, including those aimed at protecting against the impact of rising global temperatures.
In California, which was hit hard by a years-long drought that began in 2011, voters will consider $8.9 billion of bonds for water projects. Austin, Texas, voters will also consider borrowing to improve water quality. A 100-year-old seawall in San Francisco could get a $425 million repair job to make sure it protects the city from rising sea levels and floods.
"It signals that you do have a lot more states and localities taking some of the environmental, social and governance risks much more seriously," said Tom Schuette, co-head of investment research and strategy at Gurtin Municipal Bond Management.
Climate change poses a major financial threat to some U.S. cities by threatening to reduce property values they rely on for much of their tax base and leaving them dealing with costly natural disasters.
’Apolitical’ Issue
Some of the proposals may be prompted by lack of action by President Donald Trump’s administration, said Mitchell Moss, an urban policy and planning professor at New York University. Trump announced in June 2017 that the U.S. would pull out of the Paris climate accord that was signed by almost 200 countries after years of negotiations, arguing that the pact’s carbon-cutting commitments would punish American industry. He’s also failed to deliver on his promises to increase spending on local infrastructure projects.
"Environmental values today are so very central to certain states," Moss said. "They’re going to naturally go to the financing of infrastructure as the federal government cuts back."