Climate Change: The Next Great Risk to Munis Is Already Here

When Miami Beach borrowed $162 million from Wall Street this week, it wanted investors to know rising seas and extreme weather are a real risk to the city and that it’s doing something about it.

An increasing number of states and local governments are including climate change in their list of risks investors should consider before buying their bonds. There’s good reason. BlackRock Inc., the world’s largest asset manager, says that within a decade, more than 15 percent of debt in the S&P National Municipal Bond Index will come from regions that could suffer losses from climate change adding up to as much as 1 percent of gross domestic product annually.