US Cities Report US$40.8 Billion Climate Funding Gap Across 484 Projects

One hundred and twenty-four US cities collectively reported seeking US$40.8 billion in climate project investment in 2024, against a total project cost of US$62.7 billion and only US$22 billion currently available. The gap spans 484 projects ranging from energy efficiency and flood control to water quality and heat management, with 68% of projects originating from small and medium-sized cities.

CDP's US Infrastructure Opportunities Snapshot draws on disclosures from 146 US cities and seven states representing over 40% of the US population. The analysis finds that 98.6% of reporting cities faced significant climate hazards in 2024, up from 83% in 2023, and over 89% of these hazards are expected to intensify. Climate disasters have cost the US economy US$6.6 trillion over the past 12 years, with nearly US$1 trillion in damage in the most recent year alone. US cities launched 958 adaptation actions and 1,272 mitigation actions in 2024, with 93% now having climate action plans.

The funding shortfall is acute for smaller municipalities, with 68% of the 484 disclosed projects coming from small and medium-sized cities that have limited capacity to structure bankable financing. Nearly half of all projects remain in early development stages, creating demand for technical assistance. Human health, water supply, and sewage and waste management were identified as the most urgently at-risk service sectors. As federal support for climate initiatives declines, local governments face increasing pressure to independently finance infrastructure resilience through innovative public-private partnerships and blended finance mechanisms.

CDP urges financial institutions, states, and the private sector to use its Open Data Portal to identify and fund city climate projects, and encourages local governments to join the CDP Capital Markets Signatory program. Cities reporting quantifiable climate outcomes took twice as much mitigation action as cities without measured results, demonstrating a strong link between data transparency and climate ambition. The US cities pipeline offers a direct analogy for Indian urban local bodies, which face comparable challenges in mobilising climate finance for resilient infrastructure given constrained municipal budgets and nascent green bond markets.

Key figure — US$40.8 billion funding gap across 124 US cities