Coastal communities from Maine to California have been put on notice from one of the top credit rating agencies: Start preparing for climate change or risk losing access to cheap credit.
As disasters strike, infrastructure crumbles and investors scramble to find value in catastrophe bonds, a new kind of debt instrument has been launched that may be welcome news.
Infrastructure policy discussions regularly highlight the need for new projects like wider highways and new transit lines.
In a new report, RE:bound has further explored the potential benefits of resilience bonds, underlining the opportunity for the public sector to access private capital, to transfer disaster risks away from while supporting the development of resilient infrastructure projects.
Hurricane Harvey’s impacts have been “unprecedented” and “beyond anything experienced,” to use the words of the National Weather Service. However, the aftermath of this hurricane, as with any other major disaster, is heart-wrenchingly predictable.
Climate change risk is rising, and yet behavioral economics research argues that we are collectively underinvesting in protecting ourselves. In The Ostrich Paradox: Why We Underprepare for Disasters, Robert Meyer and Howard Kunreuther point to several personal traits that expose us to greater risk from natural disasters.
Conservation professionals have a challenging path ahead, but resilience finance makes it easier. Out of the carnage that Hurricane Andrew caused in 1992, a market for catastrophe (‘cat’) bonds was born.