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How Climate Challenges Cast a Glare on Issuers

The Bond Buyer

Ellicott City, Maryland, provides a stark example of the difficulties public issuers face in coping with extreme climate change.

Floodwaters ravaged the unincorporated community 12 miles west of Baltimore twice in the past three years — in the same part of town. The second disaster, in May 2018, wiped out a rebuilding project funded in part with Federal Emergency Management Agency money, which had arrived late.

“The flood hit them before the completion date because the money was siphoned off to go to another storm which was happening,” said Alan Rubin, a principal at Blank Rome Government Relations LLC.

Cities, said Rubin, must use funding mechanisms, including green bonds, to get out front of disaster situations.

"You don't to run in the same scenario that they had in Maryland," Rubin said.


“They’re socially conscious and everyone likes to use them — at least they say they do at this particular point,” Rubin said of green bonds. “The problem is, as climate change gets worse and worse, can you use them effectively for the kinds of projects that you’re trying to undertake?”

Resilience funding has resonated beyond Wall Street as well.

“Activists and community groups are now paying attention to rating agencies, using agencies as a whip,” Rubin said. “It used to be just the banking community, the financial community. But ratings are being used as a facility for what I call a ‘new green deal,’ to finance needs.”

"How Climate Challenges Cast a Glare on Issuers," by Paul Burton was published in The Bond Buyer on February 1, 2019.