From Climate Risk to Investment Opportunity: Filling the Funding Gap for Cities
US Infrastructure Opportunities Snapshot 2024
US cities face an unprecedented infrastructure challenge. Climate disasters have cost the economy US$6.6 trillion over the past 12 years, with nearly US$1 trillion in damages in the last year alone[1]. These disasters are now occurring at nearly three times their historical rate, creating cascading vulnerabilities for local communities[2].
Behind these numbers are cities and communities grappling with urgent realities: New York City’s flooding subway system, California’s wildfire evacuations, and coastal cities from Seattle to Miami building flood barriers against rising seas.
As federal support for climate initiatives declines, local governments must independently manage infrastructure and build climate resilience in their communities.
But the funding gap is stark: 124 US cities reported seeking US$40.8 billion in 2024, with overall investment need totalling US$67.7 billion.
CDP’s US Infrastructure Opportunities Snapshot shows that this critical challenge offers opportunities to create jobs, strengthen communities and improve neighborhoods.
By creating comprehensive visibility of funding gaps for climate projects across the United States, this Snapshot identifies opportunities where physical climate risks meet active local leadership developing solutions – from energy security and heat management to water quality improvements and flood control measures.
This 2024 analysis draws from 146 US cities and seven states (California, Colorado, Connecticut, Hawaii, Maryland, New York, and Washington) that reported publicly, representing over 40% of the US population (roughly 138.3 million people). The report also examines case studies from diverse states including Tennessee, North Carolina, Texas, and Louisiana to illustrate broader applications and opportunities.
Continue reading, or download the full in-depth report (PDF) to learn more.
Key takeaways
Climate risks are universal. The overwhelming majority (98.6%) of US cities reporting through CDP-ICLEI Track faced significant climate hazards in 2024 – up from 83% in 2023. Over 89% of these hazards are expected to intensify.
Cities are responding. US cities launched 958 adaptation actions and 1,272 mitigation actions in 2024, with 93% now having climate action plans in place.
Yet the funding gap is widening. 124 cities need US$67.7 billion for climate projects but have only US$22 billion available – creating a US$40.8 billion funding gap.
Measurement and climate action are strongly linked. Cities reporting quantifiable climate outcomes took twice as much mitigation action as cities without measured results – suggesting a strong association between progress tracking and climate response.
This massive pipeline represents significant investment opportunity. 484 climate projects totalling US$67.7 billion across cities of all sizes represent enormous investment potential. However, nearly half need technical assistance to reach implementation stage.
US cities face physical risks to climate change
US cities are confronting an accelerating climate crisis. Physical risks such as extreme heat, urban flooding and drought are increasing in frequency and intensity, putting local infrastructure and economies under strain. In 2024, almost all disclosing US cities (98.6%) reported facing significant climate hazards, demonstrating that resilience is no longer optional.
California leads with 20 cities reporting a combined total of 96 climate hazard instances, followed by Florida (14 cities reporting 91 climate hazard instances) and Colorado (nine cities reporting 54 climate hazard instances).
of reporting cities said they faced significant climate hazards in 2024 – an increase from 83% in 2023.
of reported hazards are expected to intensify, and over 88% are expected to become more frequent.
of these climate hazard changes are expected to occur in the short-term (by 2025), highlighting the need for both immediate action and long-term planning.
Climate risks and extreme weather threaten to disrupt vital public services. Cities identified human health, water supply, and sewage and waste management as the sectors most urgently at risk. The vulnerability of these essential services underscores how climate change will fundamentally impact cities’ ability to serve residents and businesses, with disruptions hitting the most vulnerable populations the hardest.
US cities are acting but face funding gaps
Despite waning federal support for climate action and resilience measures, US cities continue to demonstrate leadership at the local level. In 2024, US cities reported taking 958 actions to adapt to climate change – an increase of 8.6% from the previous year.
However, there is a critical disconnect between cities’ recognition of climate risks and their ability to finance necessary responses. More than half of disclosing cities report budgetary constraints that impede their ability to adapt to climate change and prepare for extreme weather events.
Beyond budget limitations, cities face a complex web of adaptation barriers:
US cities seek funding for projects to mitigate and adapt to climate change.
The scale of investment required is enormous, with 484 projects from 124 US cities totalling US$62.7 billion in costs and requiring US$40.8 billion in investment.
Hover over the map to see a state-by-state breakdown of cities’ projects:
68% of these projects come from small and medium sized cities, while nearly half of all projects remain in early development stages. This highlights the potential opportunities for technical assistance to help close critical capacity gaps and advance projects, from feasibility and scoping to structuring and implementation.
The top sectors for projects seeking financing and funding were in building and energy efficiency, transport and renewable energy:
The case for investing in climate action
Investing in climate action isn’t just an environmental imperative – it’s economic strategy. US cities report that their climate mitigation and adaptation actions are expected to reduce costs today while building community resilience against tomorrow's disasters.
Cost savings emerge as the primary benefit from climate mitigation efforts, directly improving affordability for residents. Air quality improvements, reduced natural resource depletion, increased energy security, and job creation follow close behind.
How CDP can help bridge the project funding gap
As federal funding becomes increasingly uncertain, cities, states, financial institutions, and private sector partners must urgently collaborate to increase financing in climate resilience and local infrastructure. Capital should be directed towards cities and local governments that are developing projects to strengthen resilience, create jobs and protect communities from climate risks.
As the global platform for standardized and comparable climate data, CDP disclosure provides a roadmap for investment and action:
Use CDP’s Open Data Portal to browse and learn more about all global and US projects seeking financing.
Technical assistance providers can help close critical capacity gaps for the 68% of projects from small and medium cities.
The scale of infrastructure needed demands innovative public-private partnerships with blended finance and risk-sharing mechanisms[3]. Financial institutions are encouraged to join CDP’s Capital Markets Signatory program.
By disclosing to CDP-ICLEI Track, local governments are demonstrating leadership in calling attention to their pressing investment and partnership needs.
Download the full in-depth report (PDF) below, to learn more.
This report was produced with the support of:
Mitsubishi Corporation Foundation
Footnotes
Ranking Climate as a Financial Event | Bloomberg Intelligence
2024: An Active Year of U.S. Billion-dollar Weather and Climate Disasters | National Oceanic and Atmospheric Administration (NOAA)
The Future of Climate Adaptation in America: A Q&A with Matt Sedlar | New America