14. Local solutions: financing climate action through land value capture

The urgent need to address climate change has prompted subnational governments worldwide to explore innovative financing mechanisms to fund climate investments. This chapter examines land value capture (LVC) as a potential source of financing for local climate action, reviewing relevant instruments and implications associated with their implementation. It demonstrates how public climate interventions, including low-carbon transportation and green infrastructure, can positively impact land values and how subnational governments can recover those increments through LVC for additional public benefit. The chapter also examines common LVC instruments and their rationale, exploring how jurisdictions have used these mechanisms to fund climate mitigation and adaptation. The chapter demonstrates LVC's potential as a viable financing mechanism for subnational climate action and offers insights into its practical implementation.