Funding rules that promote equity in climate adaptation outcomes

Abstract

Many climate policies adopt improving equity as a key objective. Achieving this broad goal is non-trivial. A key challenge is that policies often conceive of equity in terms of individuals but introduce strategies that focus on spatially coarse administrative areas like census tracts. For example, the Justice40 Initiative in the United States requires 515 diverse federal programs to prioritize funds for “disadvantaged” census tracts. This strategy is largely untested and contrasts with the federal government’s definition of equity as the “consistent and systematic fair, just and impartial treatment of all individuals.” How well does the Justice40 approach improve equity in climate adaptation outcomes across individuals? We analyze this question using a case study of a municipality that faces repetitive flooding and struggles to effectively manage these risks due to limited resources and public investment. We find that Justice40 is an obstacle to equity. In contrast, we design simple funding based on household risk burden that cost-effectively perform well on a wide range of equity and economic objectives. “Disadvantaged community” indicators defined at coarse spatial scales face the risk of poorly capturing many natural hazards and can be ineffective for meeting equity promises about climate-related investments.