Project Report:
Fossil Fuel Risk Bonds – a multi-state strategy
- Investigates the causes of economic imbalances.
- Investigates causes tending to destroy or impair the free-market system.
- Explores and develops market-based solutions.


With funding from the Walker Foundation, CSE will build out our successful Fossil Fuel Risk Bond (FFRB) work by monitoring progress of jurisdictions that have already embraced the program, providing expert support to these jurisdictions, and working closely with state and national level partners to get FFRB programs adopted at the national level and in key states and counties. The fossil fuel risk bond policy, incubated at CSE, provides a tool for state and local governments to begin to hold the fossil fuel industry accountable for the costs of its toxic infrastructure and climate change. FFRB programs have two basic strategies for doing this: (1) financial assurance mechanisms to hold individual owners of fossil fuel infrastructure accountable for the costs of accidents, spills, catastrophic explosions and abandonment of facilities, and (2) surcharge-based fossil fuel risk trust funds to provide badly needed funding for climate adaptation, mitigation, and climate disaster response.


The economic rationale behind fossil fuel risk bond programs is simple. Every year, the fossil fuel industry externalizes trillions of dollars in economic damages onto the backs of taxpayers. These costs manifest in the form of climate disasters, fossil fuel infrastructure disasters, and the costs of interventions needed to both mitigate and adapt to climate change. According to the UN’s most recent analyses, the cost of achieving climate stability has been priced out between $1.6 trillion and $3.8 trillion per year and is rising every year we delay bold climate action. Lord Stern famously said that this represents the greatest market failure that the world has seen. Fossil fuel risk bond programs are one policy tool governments at every level can use to correct this market failure and force the fossil fuel industry to internalize the gargantuan costs it is passing on to the rest of the world.


Over the past two years, CSE scored major national, regional and local victories. The City of Portland, Multnomah County, and King County WA all began implementation of the fossil fuel risk bond concept. Inspired by these successes, members of the Washington State Legislature are now drafting legislation to scale this program up to the state level. The same is happening now in Illinois. Members of Congress have also taken interest in this policy and are in the process of drafting federal FFRB legislation. Both the Sanders and Warren presidential campaigns added FFRB policies to their campaign platforms and are now in a position to encourage the Biden Administration to embrace the FFRB concept. All these successes are a clear indication that the concept is no longer just a good policy idea, but a reality quickly gaining traction on the ground. The scope of CSE’s activities in 2021 will include work in all of these places.

Amount Approved
$30,000.00 on 6/8/2021 (Check sent: 6/11/2021)

1294 14th Street
West Linn, OR 97068

(503) 657-7336
(510) 384-5724
(503) 657-7336


Dr. John Talberth
President and Senior Economist, Center for Sustainable Economy

Posted 3/18/2021 1:49 PM
Updated   7/13/2021 3:21 PM

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