Regional resilience trust funds: an exploratory analysis for leveraging insurance surcharges

Abstract

This paper explores the financial viability of a series of state trust funds designed to strategically provide financial products to support interventions advanced in the name of climate change adaptation and resilience in the New York metropolitan region. This paper evaluates the proposition that the regional resilience trust funds (RRTFs) could be feasibly capitalized by a surcharge on insurance (Proposition A). Second, the paper evaluates the proposition that the RRTF could sustainably support a range of grants and financial products that could accommodate 100% of states’ unmet resilience needs (Proposition B). The findings of this research support an affirmation of the feasibility of the RRTF pursuant to Proposition A. Consistent with Proposition B, this paper provides evidence in support of a sustainable portfolio strategy that can ultimately be operated independent of the insurance surcharges. However, with the exception of Connecticut, under the modeled assumptions, the RRTFs could not could fulfill 100% of the unmet resilience needs. This paper provides a broader strategic understanding of how investment products and portfolios can be designed to operate in the uncertainties associated with climate change.