Read the full report here: Fitch — Sea Level Rise May Pose Challenges For Some US Local Governments
Sea level rise already affects some communities and in the long term may pressure some communities’ operations, capital funding requirements, and indebtedness.
Sea level rise is a manifestation of global climate change that is already having noticeable effects on some communities situated along the U.S. coasts. Risks include heightened damage from episodic events such as hurricanes and storm surges (event risk) in addition to more chronic damage from pervasive flooding and permanent loss of land. These risks present a myriad of financial and logistical challenges to local governments.
To date, sea level rise has not played a material role in Fitch’s assessment of the fundamental credit characteristics of any of its rated issuers. Fitch’s special report, “Event Risk and Overall Credit Resiliency” provides more detail. However, there are real threats faced by governments in coastal areas. As the effects of sea level rise upon issuers’ credit fundamentals become known and measurable, over time these considerations may take on greater importance as a credit factor in Fitch’s rating decisions.