Climate Finance for Canadian Cities: Is Debt Financing a Viable Alternative?

Gustavo Carvalho
Additional contact information
Gustavo Carvalho: University of Toronto

No 37, IMFG Papers from University of Toronto, Institute on Municipal Finance and Governance

Abstract: Municipalities are crucial stakeholders in the response to climate change. Cities are major sources of greenhouse gas emissions and, due to their higher building and population densities, will bear the brunt of the economic and social costs imposed by extreme weather and the impact of climate change. Ontario municipalities have traditionally funded their investments from property taxes, user fees, and transfers from higher levels of government, but these sources will not be sufficient to fund both current expenditures and future capital needs. This paper explores an alternative: climate finance, the provision of financing by private actors for projects intended to decrease carbon emissions or make cities more resilient to the impacts of climate change. It analyzes four climate financing tools used in other jurisdictions – green bonds, environmental impact bonds, catastrophe bonds, and green banks – and their feasibility under current Ontario regulations. Not all instruments would be equally suitable to Ontario municipalities; each offers trade-offs that must be weighed before implementation. Still, the potential for climate financing is huge and it has a role to play in long-term climate infrastructure projects requiring large upfront investments.

Keywords: climate finance; debt finance; green bonds; environmental impact bonds; catastrophe bonds; green banks (search for similar items in EconPapers)
JEL-codes: H23 H71 H74 Q54 (search for similar items in EconPapers)
Pages: 62 pages
Date: 2018-03
New Economics Papers: this item is included in nep-ene, nep-env, nep-res and nep-ure
References: Add references at CitEc
Citations: View citations in EconPapers (1)

Published in hard copy and online

Downloads: (external link)
https://tspace.library.utoronto.ca/bitstream/1807/ ... ho_march_15_2018.pdf First version, 2018 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:mfg:wpaper:37

Access Statistics for this paper

More papers in IMFG Papers from University of Toronto, Institute on Municipal Finance and Governance Contact information at EDIRC.
Bibliographic data for series maintained by Enid Slack ().