Regenerative Climate Economics
Why climate adaptation keeps failing—and how to fix it with capital that behaves differently.
The 60-Second Version
Climate adaptation isn't failing because of money.
Billions are spent on sea walls, flood defences, drought-resistant infrastructure. But projects get cancelled when governments change. Maintenance budgets disappear during recessions. Long-term plans are abandoned after each election cycle.
The real problem is political fragility.Climate adaptation needs 50-100 year continuity. Political cycles are 4 years. This 10-25× mismatch means adaptation capital is structurally unstable—not because politicians are bad, but because the system is designed to fail.
PSC-G (Perpetual Social Capital – Governance Mode) is capital architecture specifically designed for climate: rule-based, zero-liability, transparent funds that persist across elections, recessions, and administrative turnover.
The Political Fragility Cycle
Climate adaptation fails not due to lack of funding, but due to political fragility— the vulnerability of any long-term project to short-term political changes.
Electoral Discontinuity
New governments cancel predecessors' projects. Climate infrastructure started under one administration is defunded by the next. Long-term planning becomes impossible when each election is a reset button.
Administrative Turnover
Climate offices lose institutional knowledge every 4-8 years. New staff spend years learning what predecessors knew. Expertise walks out the door with each transition.
Crisis Response Crowding
When disasters hit, adaptation budgets get redirected to emergency response. Prevention is sacrificed for reaction. The cycle repeats: underfunded adaptation → bigger disaster → more emergency spending → less adaptation funding.
Economic Cycle Vulnerability
During recessions, "non-essential" climate spending gets cut first. But climate doesn't pause during recessions. The infrastructure gap widens precisely when communities are least able to afford the consequences.
The core insight: Climate adaptation requires capital that operates on 50-100 year timescales. Political systems operate on 4-year timescales. No amount of political will or additional funding can bridge this structural gap. We need capital architecture that is inherently insulated from political cycles.
Why Current Approaches Fail
Government Budgets
Annual appropriations, subject to political priorities. Climate competes with healthcare, education, defence. Loses during crises and recessions.
Fragility: 100% exposed to political cycles
Climate Bonds
Debt that must be repaid with interest. Creates liability on public balance sheets. Subject to sovereign credit ratings and market conditions.
Fragility: Financial + political cycles
International Aid
Project-based, time-limited, subject to donor country politics. Conditions often conflict with local needs. Creates dependency without permanence.
Fragility: Donor politics + administrative cycles
Private Investment
Requires profit. Climate adaptation for vulnerable communities rarely generates returns investors demand. Capital flows to profitable projects, not needed ones.
Fragility: Market cycles + return requirements
Common pattern: All current approaches are subject to cycles shorter than climate timelines. They don't fail because of bad design for their original purpose—they fail because they weren't designed for 100-year climate challenges.
PSC-G: Capital Architecture for Climate
PSC-G (Perpetual Social Capital – Governance Mode) is specifically designed to address political fragility in climate adaptation:
Rule-Based Operation
Capital flows according to predetermined rules, not political discretion. Politicians can claim credit for establishing the fund, but can't redirect or defund it. The rules persist across administrations.
Zero Liability
PSC is a gift, not debt. No interest payments. No impact on sovereign credit ratings. No repayment pressure during economic downturns. The capital simply exists and cycles.
Transparent Governance
All fund operations are public. Deployment criteria, recycling rates, impact metrics— everything visible. This creates accountability without giving politicians control.
Multi-Decade Continuity
Because PSC recycles rather than terminates, it provides permanent capital. A fund established today can still be deploying capital in 2100—regardless of how many governments come and go.
The Key Difference
Traditional climate finance asks: "How do we get governments to fund adaptation?" PSC-G asks: "How do we design capital that doesn't need governments to keep funding it?" The fund is established once, then operates permanently by its own rules.
Where PSC-G Works
Coastal Protection
Sea walls and flood barriers need 50-100 year maintenance budgets. A PSC-G fund receives initial capital, deploys to coastal communities, receives pay-forwards from communities that benefit, redeploys to the next community. Permanent protection cycle.
Water Infrastructure
Reservoirs, treatment plants, distribution networks—all require multi-decade planning. PSC-G provides capital for construction, communities pay forward from water revenue over time, capital recycles to the next water system.
Agricultural Adaptation
Drought-resistant irrigation, soil restoration, crop diversification. Farmers receive PSC capital, implement adaptations, pay forward from improved yields. Capital cycles through farming communities indefinitely.
Urban Heat Resilience
Green infrastructure, cool roofs, heat shelters. Municipalities receive capital for heat adaptation, pay forward from reduced emergency costs, capital flows to the next city facing heat stress.
Developing Nation Adaptation
Developing countries face the worst climate impacts but have least access to capital. PSC-G provides zero-liability capital that doesn't burden already-stressed sovereign balance sheets or create debt trap dynamics.
Common Questions
How do you fund something this large without government?
PSC-G can receive initial capital from governments, foundations, or sovereign wealth funds. The key is that once established, it doesn't need continued government funding. Politicians get credit for establishment; the fund then operates independently. This actually makes it easier to fund politically—no ongoing budget battles.
Can't governments just change the rules later?
The paper discusses "constitutional protection"—legal structures that make fund interference costly. More importantly, PSC-G builds political constituencies. When millions of people depend on a fund, dismantling it becomes politically expensive. The fund's permanence creates its own protection.
What about emergency situations?
PSC-G can include emergency deployment provisions—rules that allow faster capital flow during crises while maintaining overall structure. The key is that emergencies don't deplete the fund permanently; capital still cycles back after deployment.
How does this work in developing countries?
Developing countries often can't access climate finance because of debt concerns or conditionality requirements. PSC-G creates no debt, imposes no conditions beyond pay-forward when able, and doesn't depend on local political stability. It's designed specifically for contexts where traditional finance fails.
Related Explainers
Read the Full Paper
Explore the complete analysis including national PSC-G pools, GRCF design, and developing nation applications.
View PaperExplore Climate Visualisations
Interactive models of PSC-G deployment and climate capital cycles.
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