286 ■ CITIES AND CLIMATE CHANGE
tools. Th ese funding sources are insuffi cient, highly fragmented, and not really
tailored to local governments. Th ey are narrowly sector based and risk being
counterproductive in the urban context. Furthermore, they are complex and
costly to access or else targeted to sovereign borrowers. Th e article makes pro-
posals to adapt these fi nance tools, to reintroduce local authorities in mecha-
nisms from which they are presently excluded, and to create incentives in their
favor. Finally, it proposes an initiative for cities in fragile states, based on greater
involvement of wealthy Northern cities and the recourse to a specifi c fi nancing
mechanism.
Mobilizing Private Sector Resources toward Climate Adaptation and
Mitigation Action in Asia
Jacob Park
Th is paper will explore the current state of and future outlook for mobilizing
private sector resources in the Asian post-2012 climate policy context, with a
special emphasis on the energy-poor and environmentally fragile urban pop-
ulation. Two issues and questions will be explored in this paper. First, what
is the current state of and future outlook for public and private investments
to address global and Asian climate change concerns? Second, what new triple
bottom-line strategy of fi nancing climate change action is required to respond
more eff ectively to the urban climate change dilemma in Asia?
High-Cost Carbon and Local Government Finance
Patricia Clarke Annez and Thomas Zuelgaray
Global climate change has certain unique features in terms of optimal policy.
Some of these have been discussed already at the global level and some at the
national level. But what is the impact of these features on local government
fi nance? Th is paper examines the impact of high-cost carbon on municipalities’
fi nances. We compare municipalities’ fi nances in India (State of Maharashtra)
and in Spain. We conclude that raising energy prices will create an adverse fi s-
cal shock for local governments, the magnitude of which will depend on the
structure of spending. Smaller, less diversifi ed governments currently operat-
ing at a low level of service and with a very small operating defi cit will be harder
hit, precisely because the most basic services tend to be energy intensive, and
their energy bill is high in relation to their scope for borrowing to weather the
shock. However, all municipalities would appear to be hard hit, and a system
of compensation from national governments would be needed to avoid disrup-
tion to essential services.