Climate change and municipal finance: Ordinary innovations for just urban transitions

Abstract

As cities worldwide increasingly adopt commitments towards climate justice, questions remain about the ways that city governments will be able to fund more just climate efforts. While the use of novel debt financing schemes has been examined in the literature for its justice implications, scholars have rarely interrogated how the more mundane tools and practices of municipal finance can be applied to enable more just urban transitions. Here, we use the USA as a case study to analyse the impacts of climate change and climate action on municipal budgets and to examine how cities are adapting their financial tools and practices to advance climate action and climate justice efforts. We employ a mixed-methods research design that combines 34 expert interviews with a systematic content analysis of municipal budgets from 15 US cities of different sizes. We find that both climate change and climate action can contribute to cities’ fiscal vulnerability by imposing additional expenditures and/or reducing municipal revenues. While most cities lack transparency about their investments in climate action and climate justice, some city governments are implementing ordinary innovations that embed climate and justice criteria into budgetary practices and funding tools. These ordinary innovations reveal that cities are beginning to reimagine municipal finance in the service of more just climate futures.