Not just a lack of revenue: Financing is often considered the greatest barrier to climate and sustainability projects. This is only partially due to a lack of revenue. There is a range of constraints on investing strategically in infrastructure.

• Split incentives emerge when the office managing building construction is not the same as the one operating the building, and the ultimate decisions are made under year-end budget crunching pressures in the finance department. The result is buildings that cost a bit less to construct, and significantly more to operate.
• Lifetime costing:  Fiscal constraints and burgeoning infrastructure debts municipalities confront is in part created by an urban design approach that fails to take into account the full range of costs over time. Local governments often generate less in development fees and taxes for low-density, residential developments over the long term than they spend on emergency services, waste removal, roads, water mains, sewers and other necessities.

Complete financial analysis approaches can better inform decisions.  These include:

• Life cycle analysis: This considers the full operational, maintenance and capital costs over an investment’s entire life cycle, rather than just its original capital cost.
• Full cost accounting: This accounts for the cost of dealing with impacts such as the health effects of air pollution or the harm done by climate changes triggered by greenhouse gas emissions. Even with better financial analysis, sustainability projects still require new investment.