{"id":13086,"date":"2021-08-26T09:46:36","date_gmt":"2021-08-26T13:46:36","guid":{"rendered":"https:\/\/blogs.edf.org\/growingreturns\/?p=13086"},"modified":"2025-06-09T16:06:00","modified_gmt":"2025-06-09T20:06:00","slug":"fema-resilience-finance-storm-act","status":"publish","type":"post","link":"https:\/\/blogs.edf.org\/growingreturns\/2021\/08\/26\/fema-resilience-finance-storm-act\/","title":{"rendered":"5 ways FEMA and states can leverage financial tools to build resilience, fast"},"content":{"rendered":"

This blog is co-authored by\u00a0<\/i>Eric Letsinger<\/a><\/i>,\u00a0CEO,\u00a0Quantified Ventures.<\/i><\/p>\n

Climate\u00a0change\u00a0is\u00a0exacerbating\u00a0flooding, leaving many regions increasingly vulnerable. The recent IPCC report\u00a0indicates\u00a0seas will rise 6 to 12 inches by 2050, and climate change is fueling more intense\u00a0storms\u00a0and increased precipitation.<\/p>\n

States must act fast to\u00a0finance and\u00a0implement solutions that address these risks now and in the future.<\/p>\n

<\/p>\n

State revolving loan funds (SRFs) \u2014 federal low-interest loans administered by state agencies \u2014 provide an opportunity to finance projects quickly. The recent Safeguarding Tomorrow through Ongoing Risk Mitigation (STORM) Act authorizes the Federal Emergency Management Agency (FEMA) to establish hazard mitigation revolving funds. And the infrastructure bill that recently passed the Senate allocates an additional $500 million toward other state revolving funds over the next five years.<\/p>\n

A\u00a0new\u00a0report<\/a><\/span>\u00a0from\u00a0Quantified\u00a0Ventures\u00a0commissioned by\u00a0EDF evaluates\u00a0innovative\u00a0best\u00a0practices for securing\u00a0these\u00a0SRFs and using them\u00a0effectively.<\/span><\/p>\n

Here are five recommendations\u00a0from the report.<\/p>\n

1. Prioritize locally-informed projects.<\/span><\/b><\/p>\n

When it comes to natural infrastructure, each state and municipality has its own needs and priorities. One-size-fits-all solutions rarely work. In order to support the right solutions at the right time for the right place,\u00a0FEMA should prioritize natural\u00a0infrastructure solutions\u00a0while also\u00a0increasing\u00a0flexibility on eligibility requirements for funding.\u00a0<\/span><\/p>\n

Strict and prescriptive federal mandates for the use of SRFs for clean water projects have created burdensome administrative barriers that have contributed to project delays, over-spending and underutilization of funds. By avoiding federalization of SRF programs, including STORM funds, and allowing for a wide variety of unique, locally-informed projects, FEMA can distribute desperately needed loans more efficiently.<\/p>\n

2. Embrace innovative repayment streams.<\/strong><\/p>\n

A consistent challenge for many SRF projects\u00a0is\u00a0identifying reliable repayment mechanisms. Natural infrastructure\u00a0projects are multi-beneficial,\u00a0presenting opportunities to\u00a0generate\u00a0new\u00a0revenue streams for repayment,\u00a0such\u00a0as\u00a0nutrient trading,\u00a0carbon credits\u00a0and\u00a0sustainable forestry income.\u00a0Future\u00a0repayment\u00a0streams could\u00a0also\u00a0include\u00a0revenue earned\u00a0for\u00a0flood risk reduction or avoided\u00a0damages.<\/p>\n

To support states, municipalities and nonprofits pursuing natural infrastructure projects, FEMA should identify opportunities to combine these repayment types to reduce barriers.<\/p>\n

The Iowa SRF\u00a0loan into\u00a0the Soil\u00a0and\u00a0Water Outcomes Fund, for example, provides\u00a0upfront\u00a0payments to farmers pursuing conservation practices that\u00a0promote positive environmental outcomes like carbon sequestration or water quality improvements.\u00a0By monetizing these environmental benefits,\u00a0the program\u00a0has\u00a0created a market for environmental outcomes\u00a0with\u00a0reliable revenue streams\u00a0used to repay return-seeking investment capital including SRF\u00a0investments.<\/p>\n

\"\"<\/a>
Natural infrastructure can provide protective barriers to reduce flood risk while also offering community green space and supporting green jobs. Photo credit: Louisiana GOHSEP, CC BY SA 2.0.<\/figcaption><\/figure>\n

3. Expand environmental finance and diversify funding sources.<\/strong><\/p>\n

SRFs can support natural infrastructure projects with a wide variety of financial mechanisms, but there is often a knowledge gap for entities that lack financial expertise. To improve utilization and promote innovative, market-based projects, FEMA STORM should direct management of the loan fund to experienced environmental finance experts. This expertise will allow for more innovative uses, such as leveraging.<\/p>\n

Furthermore, while STORM is one of the\u00a0newest\u00a0SRF programs, existing SRF programs can have similar goals, including stormwater, water quality and floodplain restoration and reconnection.\u00a0FEMA should take advantage of co-funding\u00a0from\u00a0other federal entities\u00a0to create larger and more\u00a0strategic\u00a0projects.<\/p>\n

For instance, the New York SRF and\u00a0New York State Energy Research\u00a0and\u00a0Development Authority (NYSERDA)\u00a0Energy Credit Enhancement program\u00a0established\u00a0creative partnerships and leveraged\u00a0existing federal funds\u00a0with\u00a0an unexpected overlap between energy efficiency and clean water. By leveraging\u00a0SRF funds for\u00a0clean\u00a0water infrastructure,\u00a0the state was able to support energy efficiency loans provided by\u00a0NYSERDA.<\/p>\nIt\u2019s time for policymakers to think outside of the box and pursue flexible, innovative approaches to get vital resilience projects built quickly. <\/a><\/span>Share on X<\/a><\/span>\n

4. Invest in project development.<\/strong><\/p>\n

Most SRF programs are designed to evaluate and fund\u00a0fully-baked\u00a0project applications.\u00a0However,\u00a0state programs may lack the expertise or resource capacity to initiate natural infrastructure project\u00a0development and\u00a0may turn to grants-only financing approaches and engineered solutions over natural infrastructure.<\/p>\n

FEMA should consider solutions to bridge these knowledge gaps and assist with project development before finalizing project applications. Small investments to support project development promise strong returns on investment by bringing more fully developed projects to SRF\u00a0programs.<\/p>\n

5. Highlight the co-benefits of environmental infrastructure.<\/strong><\/p>\n

FEMA and entities pursuing SRF projects need to better articulate the economic and social co-benefits of natural infrastructure projects. Quantifying and effectively communicating anticipated savings to municipalities can increase\u00a0investments and\u00a0collaboration by\u00a0highlighting\u00a0the benefits of\u00a0\u201cupstream\u201d\u00a0investments\u00a0to the entire\u00a0watershed.<\/span><\/p>\n

Read the full report here.<\/span><\/a><\/div>\n

The climate crisis expands the urgency for action to protect communities from increasing adverse impacts. It\u2019s time for policymakers to think outside of the box and pursue flexible, innovative approaches to get vital resilience projects built quickly.<\/p>\n","protected":false},"excerpt":{"rendered":"

How state revolving loan funds can finance natural infrastructure projects quickly to reduce climate risk. <\/p>\n","protected":false},"author":126135,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[107017],"tags":[4676,85132,120378,120379],"coauthors":[],"class_list":["post-13086","post","type-post","status-publish","format-standard","hentry","category-coasts-watersheds","tag-fema","tag-natural-infrastructure","tag-state-revolving-load-funds","tag-storm-act"],"acf":[],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/blogs.edf.org\/growingreturns\/wp-json\/wp\/v2\/posts\/13086","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/blogs.edf.org\/growingreturns\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/blogs.edf.org\/growingreturns\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/blogs.edf.org\/growingreturns\/wp-json\/wp\/v2\/users\/126135"}],"replies":[{"embeddable":true,"href":"https:\/\/blogs.edf.org\/growingreturns\/wp-json\/wp\/v2\/comments?post=13086"}],"version-history":[{"count":1,"href":"https:\/\/blogs.edf.org\/growingreturns\/wp-json\/wp\/v2\/posts\/13086\/revisions"}],"predecessor-version":[{"id":15957,"href":"https:\/\/blogs.edf.org\/growingreturns\/wp-json\/wp\/v2\/posts\/13086\/revisions\/15957"}],"wp:attachment":[{"href":"https:\/\/blogs.edf.org\/growingreturns\/wp-json\/wp\/v2\/media?parent=13086"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/blogs.edf.org\/growingreturns\/wp-json\/wp\/v2\/categories?post=13086"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/blogs.edf.org\/growingreturns\/wp-json\/wp\/v2\/tags?post=13086"},{"taxonomy":"author","embeddable":true,"href":"https:\/\/blogs.edf.org\/growingreturns\/wp-json\/wp\/v2\/coauthors?post=13086"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}