CDP Snapshot of US city climate project pipeline: showcasing local demand for funding and financing through the Inflation Reduction Act
The snapshot identifies 270 projects across the priority sectors of the Greenhouse Gas Reduction Fund, including 121 projects in buildings and energy efficiency from 80 cities, 88 projects in transport from 60 cities and 61 projects in renewable energy from 47 cities, totaling US$18.3 billion in financing needs.
Demand for climate finance in cities is increasing year-on-year. In 2023, 130 US cities reported 436 projects seeking US$27.5 billion in investment, more than a 30% increase since 2021.
In 2023, buildings and energy efficiency was the leading sector reported in the US with 121 projects valued at US$4.7 billion, followed by transportation (88 projects valued at US$12.9 billion) and renewable energy (61 projects valued at US$696 million).
47% of reported climate-based projects by US local governments were in the early stages of development, underscoring the importance to provide technical assistance and capacity building for project preparation, financing and implementation.
Over 20% of projects were small-scale (< US$500,000), but over 80% were disclosed by small and medium-size cities (< 500,000 inhabitants) demonstrating a need to mainstream financial aggregation strategies and instruments.
New York – July 31, 2024: CDP, the global non-profit leading the world’s environmental disclosure system for companies, cities, states and regions, announced the launch of its 2023 US Infrastructure Snapshot, a supplement to the Global Infrastructure Snapshot, delivered in partnership with the Global Covenant of Mayors at COP28 last year.
The US snapshot provides data disclosed to CDP-ICLEI Track in 2023 on local climate projects and investment needs according to each state and across key sectors, yielding valuable insights on how the rapid emergence of new funding and financing mechanisms such as the Inflation Reduction Act and Bipartisan Infrastructure Law can best be applied. The snapshot is a representative sample of infrastructure data and provides critical insight into the kinds of projects US cities are seeking to advance for climate action, key areas for public and private investment, regional needs and disparities and opportunities for aggregation.
Designed to benefit local and state governments, the US snapshot highlights an understanding of local project needs and tracking municipal climate action, particularly to awardees of federal funding initiatives like the Greenhouse Gas Reduction Fund, as well as technical assistance and capital market providers. The snapshot identifies 270 projects across the priority sectors of the Greenhouse Gas Reduction Fund, including 121 projects in buildings and energy efficiency from 80 cities, 88 projects in transport from 60 cities and 61 projects in renewable energy from 47 cities, totaling US$18.3 billion in financing needs.
On the strength of its annual disclosure process, CDP’s compendium of projects is expanding every year, which includes cities, states and public authorities disclosing their climate finance needs, along with details on the local impacts of climate change and ongoing mitigation efforts. In 2023, over 160 US cities and six US states, representing over 25% of the US population, reported climate risks, climate action plans and projects at all stages of development through CDP.
“CDP’s snapshot of the latest US project pipeline shines a light on how city and county projects can be supported under initiatives from the Inflation Reduction Act to deliver on the United States’ most historic funding package ever for climate action,” said Katie Walsh, CDP’s Head of Climate Finance for cities, states and regions and North America Lead. “Local governments across the country have been working on their climate, resilience and environmental goals and have a range of projects to achieve them. CDP stands ready to connect these projects with valuable preparation support, funding and financing initiatives as well as a mechanism to track local implementation.”
"Congratulations to the 130 US cities and counties who reported on climate projects seeking financing. We must continue to mobilize capital markets if we are to meet our collective goals to improve the livability of our communities, protect and restore nature and achieve a just transition to a carbon-free economy,” said Angie Fyfe, Executive Director, ICLEI. “Local governments that report through the CDP - ICLEI Track are leading this push for investment, and they should be recognized for their efforts."
CDP analysis covers a wide range of relevant metrics, including the status of climate action plans, mitigation and adaptation measures already in place, factors that impact a jurisdiction’s ability to implement projects and the identification of climate hazards. In addition to project data, CDP provides context on a local government’s social, political and economic environment, allowing stakeholders to place projects into the local context and appropriate funding.
“The US municipal bond market plays a crucial role in financing the Country's infrastructure plan, including supporting cities, states and public authorities in their response to climate change,” said Robert Fernandez, Director, ESG Research, Breckinridge Capital Advisors. “Being able to access critical climate data and information, like from the CDP-ICLEI Track, helps municipal bond investors like Breckinridge access additional information about a local government’s climate challenges and goals.”
CDP’s snapshot which tracks projects seeking financing and funding is crucial to delivering on local environmental progress.
“Local governments stand at the forefront of climate action, driving change through innovative projects that increase community resilience. Climate Mayors are meeting the moment by leveraging unprecedented federal support to increase the scale and ambition of climate action,” said Kate Wright, Executive Director of Climate Mayors. “Tools that can help cities track climate progress, match projects with available funding and guide investments are critical to our shared success.”
CDP encourages more cities and states & regions and public authorities to share critical information on their pending projects through the current 2024 disclosure cycle to help connect with increasingly available funding and financing opportunities through the Inflation Reduction Act.
Media Contact:
Conrad Jarzebowski, conrad.jarzebowski@cdp.net
About CDP
CDP is a global non-profit that runs the world’s environmental disclosure system for companies, cities, states and regions. Founded in 2000 and working with more than 700 financial institutions with over $142 trillion in assets, CDP pioneered using capital markets and corporate procurement to motivate companies to disclose their environmental impacts, and to reduce greenhouse gas emissions, safeguard water resources and protect forests. Over 24,000 organizations around the world disclosed data through CDP in 2023, with more than 23,000 companies – including listed companies worth two thirds global market capitalization - and over 1,100 cities, states and regions. Fully TCFD aligned, CDP holds the largest environmental database in the world, and CDP scores are widely used to drive investment and procurement decisions towards a zero carbon, sustainable and resilient economy. CDP is a founding member of the Science Based Targets initiative, We Mean Business Coalition, The Investor Agenda and the Net Zero Asset Managers initiative. Visit cdp.net or follow us @CDP to find out more.