This paper explores the legal and financial viability of a series of state trust funds designed to provide financial products to support interventions advanced in the name of climate change adaptation and resilience in the New York Metropolitan Region. The subject financial model, known as a Regional Resilience Trust Fund (RRTF), would be governed by a Regional Resilience Commission (RRC) made up of political appointees from the states of New York, New Jersey and Connecticut who would serve as stewards of each state’s respective trust fund.
This paper evaluates the proposition that the RRTF could be feasibly capitalized by a surcharge on certain regulated insurance lines (Proposition A). Second, based on the assumed validity of the First Proposition, the paper evaluates the proposition that the RRTF could sustainably support a range of financial products, including grants, low-cost loans, non-recourse loans and market-rate loans that could accommodate 100% of the states’ unmet resilience needs, as defined by existing disaster resilience plans (Proposition B).
The findings of this research support an affirmation of the legal and financial feasibility of the RRTF pursuant to Proposition A. Consistent with Proposition B, this paper provides evidence in support of a sustainable portfolio strategy for products supporting a range of potential projects, from short-term community resilience planning to long-term infrastructure finance. With the exception of Connecticut, the modeled assumptions of the RRTF could not support an affirmation of the proposition that a RRTF could fulfill 100% of the unmet resilience needs of the states. However, the findings do support an alternative proposition that the RRTF may be able to accommodate a significant portion of unmet resilience needs. This paper provides a broader strategic understanding of how products and portfolios can be designed to operate in the uncertainties associated with climate change.