Across the country, communities are examining the compound risks of aging infrastructure and constrained public budgets. With an estimated investment gap of $2.9 trillion for the United States between 2024 and 2033, the greatest barrier to building resilience against climate and environmental shocks isn’t engineering capacity – it’s financing. That’s why, as infrastructure owners and experts bridge the gap between resilience goals and funding realities, a shift is underway toward risk-informed investment strategies that quantify resilience as measurable value.
In this roundtable, Breanna Horne, CHMM, ENV SP, WEDG, WELL AP, vice president and director of resilience and Patricia Macchi, vice president and national director of infrastructure economics and grants advisory, discuss how public agencies can unlock new funding streams for these improvements through risk reduction, the evolving role of data in quantifying resilience benefits and how capital planning is reshaping collaboration across sectors.
As awareness of resilient infrastructure grows, what barriers prevent agencies from treating resilience as a core investment?
Breanna Horne: Historically, agencies have (understandably) prioritized immediate demands like service delivery, maintenance and compliance for their communities. They have to balance near-term operational needs over long-term risk reduction to keep systems running reliably. Typically, long-term investments like resilience improvements are funded after a disaster because the urgency and funding are more available. This cycle continues because reimbursement-based programs or narrowly-defined grants oftentimes require agencies to replace damaged assets in-kind, which keeps us in a state of being reactive versus proactive.
Patricia Macchi: It’s also structural. Budgets and capital programs are fragmented: money is siloed by purpose or by fiscal year, and resilience projects often fall between categories. So, the obstacle is a lack of mechanisms to invest in prevention the way we invest in response.
How can agencies combat this?
Patricia Macchi: The key is to move from a mindset of grant-seeking to one of strategic investment. With resilience finance, we’re designing financial tools that reward risk reduction.
Take resilience bonds, for instance. They’re structured so that if an agency implements resilience measures like floodwalls or green infrastructure, it earns a rebate, which can then back a loan or bond to fund the project. It’s a financial feedback loop that rewards proactive behavior.
Breanna Horne: Parametric insurance is another game changer. It’s a policy that pays out automatically based on a predefined trigger, like a heat index or rainfall threshold, rather than damage claims. Traditional insurance can take far longer, while parametric insurance can deliver funds within 30 days, helping agencies respond faster and keep operations running.
Why are insurance and risk management becoming central to climate adaptation?
Breanna Horne: The insurance protection gap is widening as climate events increase. Agencies that understand and quantify their risks can negotiate better coverage or self-insure portions of their portfolio.
Patricia Macchi: That’s where risk management becomes part of the resilience strategy. Transit agencies, for instance, are realizing that if they reduce their exposure to flooding through infrastructure improvements, their premiums can go down. That reduction in annual insurance costs can then be leveraged to fund the improvements themselves. It’s a virtuous cycle that uses market logic to advance resilience goals.
How can STV’s economic modeling and climate tools support these efforts?
Breanna Horne: Traditional cost-benefit analyses only look at avoided losses: what we don’t lose. But that doesn’t tell the full story. At STV, we’re aligning resilience metrics with green bond frameworks and broader economic indicators so that agencies can capture regional value creation – things like job stability, ecosystem health and avoided service disruptions.
Patricia Macchi: The challenge is speaking the same language as the people managing the agency’s debt or capital planning. That’s where our role at STV comes in: translating resilience into financial performance indicators that can be modeled, monetized and justified.
Breanna Horne: That’s what our resilience financing service line aims to do: help agencies identify, structure and implement those opportunities. It’s not theoretical anymore: it’s about turning resilience into a real financial opportunity.
Patricia Macchi: And part of that involves helping clients bridge disciplines. By bringing together resilience planners, risk managers and financial officers who don’t traditionally collaborate, we integrate climate risk reduction into how we plan, budget and insure to help communities build strong futures by design, and by dollars.
