Mobilizing private finance for adaptation and resilience priorities across cities: Mexico City case study

Background: The cost of adapting to the impacts of climate change is rising faster than the finance destined for it, creating a widening adaptation finance gap. Cities are at the forefront of adapting to climate change and have, to varying degrees, tools to address market failures contributing to the underinvestment in adaptation. By understanding the barriers and opportunities to engage the private sector, this research explores how cities can create an enabling environment to mobilize private finance for resilience. Methods: Through qualitative methods and a case study, the primary contribution of this research is a diagnostic framework that presents interventions cities can deploy to engage the private sector in advancing resilience. Mexico City is used as a case study and assessed against this framework. Results: The framework is a transferable diagnostic tool for cities to attract and retain private finance for adaptation. It identifies nine non-prescriptive, government-led interventions, recognizing the need to evaluate context-specific barriers to provide relevant solutions to communities. A series of recommendations are proposed specific to Mexico City’s efforts, as well as its political and socio-economic context. Conclusion: Adaptation measures are essential in protecting communities, assets, and biodiversity from the impacts of climate change. There are mechanisms and tools that if managed adequately, can transfer or reduce the costs and risks of climate change. Through an equity-centred approach, city-led interventions supported by the private sector can deploy locally relevant solutions at scale, building more just and resilient communities—in Mexico City and across the world.