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Local governments in cities around the world will not be able to cope with climate change impacts until they enhance their capacity to adapt. Past efforts to build local capacity, however, have often been unsuccessful. Building municipal capacity to formulate and implement climate adaptation plans will, in our view, require a new approach. Special attention will need to be paid to (1) contingent financial arrangements; (2) widespread and continuous stakeholder engagement; and (3) a commitment to experimental problem-solving. Most important, to respond to the scientific and technical uncertainties surrounding climate risks, local governments will have to enhance their 'adaptive governance' capabilities. Key policy insights Building local capacity to adapt to climate change is likely to require moving beyond traditional forms of financial and technical assistance so that the uncertainties and complexities of climate change can be addressed. We suggest a new three-pronged approach to municipal capacity building. The first element of this new approach will require structuring financial investments in a more adaptable (i.e. contingent) fashion. The second will involve widespread and continuous stakeholder engagement, both for coalition building and for public learning. The third encourages an experimental approach to problem-solving so that communities can learn-by-doing. [ABSTRACT FROM AUTHOR]