Enabling Conditions for the Use of Certified Climate Financing in Public Infrastructure Projects in the United States: A Comparative Case Study of Seattle and San Francisco

Abstract

Over 70% of global carbon emissions can be attributed to energy use in cities. As of 2021, it was understood that up to 90% of those emissions could be reduced using existing technologies, creating potential economic opportunities over $24 trillion USD. Since 2008, cities have been able to secure climate financing, or specific funding for projects that align with the Paris Agreement. However, through 2023, the portion of the international bond market that is considered “green” or “climate-aligned” has been falling short of needs on a global scale. This is particularly true for local governments in the United States, where the issuance of municipal bonds is standard practice to fund capital improvement projects. Some cities, like San Francisco, have had repeated success in utilizing climate-aligned financing, while many others, including environmentally progressive cities like Seattle, have not. Through a comparative case study and policy analysis, this thesis explores the enabling conditions for climate financing that are present in San Francisco, and evaluates the extent to which the capital planning process, as presented in each city’s Capital Improvement Plan, has played a role in securing these funds. The Capital Improvement Plans for Seattle and San Francisco are evaluated against the same criteria, which are developed from examples of climate policy evaluation in the literature and in practice. San Francisco’s Capital Improvement Plan scored higher than Seattle’s across criteria, formulating the conclusion that, through a more holistic approach to capital planning and better integration of climate and capital planning, San Francisco is more obviously implementing projects that align with its climate goals and is therefore better suited to utilize climate financing for those projects. Policy recommendations for Seattle are presented based on the results of the comparison.