Green bonds as adaptation finance: climate justice insights from Cape Town and San Francisco

Abstract This article examines green bonds, debt instruments labeled as green, whose issuance has grown steadily since 2008 and been promoted by international organizations as a means of closing the adaptation finance gap. Despite their prominence, green bonds remain underexplored in adaptation finance research from a justice perspective. To address this lacuna, this article provides empirical insights drawn from qualitative, case-based research on green bond–financed water infrastructure in Cape Town, South Africa, and San Francisco, California, United States, analyzed through a climate justice lens. It asks how green bonds, as instruments of adaptation finance, materialize adaptation efforts, engage with climate vulnerabilities, and interact with local injustices. Findings indicate that, in Cape Town, green bond financing overlooked climate injustice in potable water distribution, while in San Francisco it overlooked climate injustice in wastewater distribution. In both cases, racialized climate vulnerability emerged as the most salient factor, although other intersecting dimensions, such as income, also played a role. The article concludes that analyzing and implementing green bonds for adaptation finance requires an intersectional climate justice approach, including pillars of distribution, procedure, and recognition, to address the intersecting dimensions of climate vulnerability within each local context.