Climate-related Financial Risks and Opportunities: A Primer for Local Governments

Amy Bailey
Posted on: 7/26/2023 - Updated on: 7/26/2023

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This primer is intended to serve as an introductory resource for local governments and encourage new conversations within government organizations—particularly among chief financial officers and treasurers—so that they may work toward integrating climate considerations throughout their governance activities.

Local governments are facing negative and positive financial impacts from the changing climate and the transition to a low-carbon economy. Protecting their fiscal health and positioning their communities for a thriving future will rest on their ability to assess climate-related financial risks and opportunities in ways that improve decision-making and strategic planning. While this practice is not currently widespread among local governments in the United States, this type of assessment and the actions local governments are taking to manage climate impacts are of increasing interest to municipal bond holders, investors, residents, and companies.

This primer begins by outlining the ways local governments can benefit from understanding the impacts of climate-related risks and opportunities. It introduces the potential financial impacts from these risks and opportunities, as well as the assessment approaches, resources, and tools available to local governments and other public sector entities. It then explores the broader context of climate risk assessment and disclosure that may influence how this practice evolves for local governments in the United States. The primer concludes by highlighting critical gaps that need to be addressed in order to enable strong fiscal management at the local level as climate impacts and economic shifts accelerate.

The insights offered are based on interviews with a set of local jurisdictions across North America, leading city networks, and public sector finance experts, as well as a detailed literature review. The research builds on prior C2ES work around the economic competitiveness of climate-resilient cities and efforts to help companies identify their climate risks and opportunities in alignment with the Task Force on Climate-related Financial Disclosures (TCFD).


Amy Bailey (2023). Climate-related Financial Risks and Opportunities: A Primer for Local Governments. Center for Climate and Energy Solutions.

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Launched in November 2011, C2ES is the successor to the Pew Center on Global Climate Change, long recognized in the United States and abroad as an influential and pragmatic voice on climate issues.