FISCAL RESILIENCE IN A CHANGING CLIMATE

Resilient Design Sprints: The series brings together experts across sectors to tackle the fiscal risks that governments face due to climate impacts. Two Sprints have been held to date. The first Sprint in fall 2024 identified market gaps, the consequences of inaction, and sustainable strategies to reduce community exposure to climate risk, and the second in spring 2025 examined the current state of risk modeling and insurance practices, persistent gaps in how local adaptation measures are accounted for in risk assessments, and emerging methodologies for quantifying benefits to ensure risk-reduction benefits are better reflected in insurance outcomes.

The Resilience District Incubator: CA FWD, in partnership with Resilient Cities Catalyst, is launching the Resilience District Incubator to help communities proactively reduce climate risk, improve insurability, and unlock sustained, place-based investment. Pilots in California, Connecticut, and New York will test new governance and financing structures that pool resources for community-driven resilience projects. The Incubator offers hands-on technical assistance, a national learning network, an expert advisory workgroup, and scalable toolkits to bridge capacity gaps preventing communities from exploring and advancing resilience districts.

Wildfire and Insurance Policy Agenda: California is at a critical juncture in addressing wildfire risk, with major implications for communities, markets, and public budgets. In spring 2025, CA FWD convened cross-sector experts to assess the policy landscape, which informed the Wildfire Policy Forum and the release of a Policy Brief outlining near-term opportunities and long-term strategies to reduce risk and strengthen fiscal resilience. To build momentum, CA FWD and Resources Legacy Fund will launch a strategic coalition in late 2025 to advance this agenda in the 2026–27 legislative session.

Funding and Financing Strategy for Resilience: As climate-driven disasters grow more costly, governments face increasing pressure to fund resilience. The current approach is fragmented—hindered by inconsistent funding, misaligned incentives, and financial tools that undervalue risk reduction. To address this, CA FWD and Insurance for Good are convening a cross-sector working group to define sustainable funding and financing models, explore the role of insurance and rating systems in valuing resilience, and identify regulatory and policy solutions that improve economic signals and unlock investment. The initiative will culminate in a shared framework and recommendations to guide future action, including a set of state policy and financing recommendations for the next Governor and Insurance Commissioner.

Public Budget Resilience: CA FWD is advancing policy reforms to the state’s Rainy Day Fund, including increasing savings during strong revenue years and smoothing budget fluctuations during shortfalls. California’s budget is among the most volatile in the nation, which is inherently a climate resilience issue —the more volatile our budget the more unpredictable our investment in climate resilience. Reforming the Rainy Day fund is an important first step and a prerequisite to ensuring the state has a resilient economy, one where we can sustain investments in climate adaptation and resilience, especially in communities most vulnerable to climate impacts.

The Climate Resilience Implementation Accelerator: CA FWD, in partnership with Resilient Cities Catalyst and Climate Resolve, is working to fast-track a pipeline of high-impact climate resilience projects across California. By supporting local partners in overcoming barriers that stall the shift from planning to implementation through technical assistance and seed funding, the Accelerator helps uncover how solutions reduce risk, what they cost, and how they can be financed and replicated in California and beyond.