This book presents new research on innovative financial instruments and approaches available to implement nature-based solutions (NBS) at various scales and in different contexts. Despite knowledge of the multiple benefits NBS provide, a key barrier to their wide-spread adoption is a lack of knowledge over their financing, in particular, who should pay for an NBS and how it can be financed. The book explores a variety of public, private, and blended finance models and their applicability in developing NBS across terrestrial and marine ecosystems, involving multiple stakeholders, and in jurisdictions of varying climates and income levels. Furthermore, the book provides case studies of the innovative financing of NBS with best practices identified. This book is of interest to environmental planners, resource conservation managers, policymakers, international companies and organizations, environmental NGOs, researchers, and graduate and undergraduate students interested in NBS.
Author(s): Robert C. Brears
Series: Palgrave Studies in Green Finance
Publisher: Palgrave Macmillan
Year: 2022
Language: English
Pages: 295
City: Cham
Acknowledgements
Contents
List of Tables
1 Introduction
1.1 Introduction
References
2 Nature-Based Solutions
2.1 Introduction
2.2 Societal Challenges
2.2.1 Climate Change
2.2.2 Population Growth and Rapid Urbanisation
2.2.3 Increased Food Demand
2.2.4 Rising Demand for Water and Deteriorating Water Quality
2.2.5 Economic Growth
2.2.6 Biodiversity Loss
2.2.7 Natural Disasters
2.3 Nature-Based Solutions
2.3.1 Ecosystem Services
2.3.2 Multifunctionality
2.3.3 Nature-Based Solutions Meeting Wider Development Goals
2.3.4 Typology of Nature-Based Solutions
2.3.5 Implementation of Nature-Based Solutions
2.4 Multiple Co-Benefits of Applying Nature-Based Solutions
References
3 Financing Nature-Based Solutions
3.1 Introduction
3.2 Current Financing Levels of Nature-Based Solutions
3.2.1 Future Investment Needs in Nature-Based Solutions
3.3 Financing Nature-Based Solutions
3.4 Sources of Finance
3.4.1 International Public Financial Sources
3.4.1.1 Multilateral Development Banks
3.4.1.2 Bilateral Development Finance Institutions
3.4.2 Domestic Public Sources
3.4.3 Private Finance Sources
3.4.3.1 Institutional Investors
3.4.3.2 Environmental Corporate Social Responsibility
3.4.4 Blended Finance Sources
3.4.4.1 Types of Additionalities
3.4.4.2 Actors and Financial Instruments
3.4.4.3 Intermediaries
3.4.4.4 Principles for Blended Finance
3.5 Financing Instruments
3.5.1 Combination of Financing Instruments
3.6 Barriers to Financing Nature-Based Solutions
3.7 Role of Governments in Removing Barriers to Financing Nature-Based Solutions
3.8 Benefits to the Private Sector in Participating in Nature-Based Solutions
References
4 Debt-for-Nature Swaps Financing Nature-Based Solutions
4.1 Introduction
4.2 Debt Swap
4.3 Debt-for-Nature Swaps
4.4 Bilateral Swaps Versus Trilateral Swaps
4.4.1 Bilateral Swaps
4.4.2 Trilateral Swaps
4.5 Key Actors and Motivations
4.5.1 Benefits to Actors
4.6 Debt-for-Nature Swap Agreements
4.7 Establishing a Conservation Trust Fund
4.7.1 Governance and Management of Conservation Trust Funds
4.7.2 Conservation Trust Fund Disbursement Instruments
4.8 Monitoring and Evaluation of Debt-for-Nature Swaps
References
5 Market-Based Instruments Financing Nature-Based Solutions
5.1 Introduction
5.2 Market-Based Instruments
5.3 Environmental Taxes and Charges
5.3.1 Environmental Tax Credits
5.3.2 Designing Environmental Taxes and Charges
5.4 Subsidies
5.4.1 Technical Assistance Grants
5.4.2 Benefits of Subsidies
5.4.3 Principles for Environmentally Friendly Subsidies
5.5 Tradable Permits
5.5.1 Water Quality Trading
5.5.1.1 Types of Water Quality Trading
5.5.1.2 Benefits of Water Quality Trading Programmes
5.5.2 Stormwater Credit Trading
5.5.3 Tradable Development Rights
5.5.3.1 Market Activity of Tradable Development Rights Programmes
5.5.3.2 Benefits of Tradable Development Rights
5.5.3.3 Monitoring and Enforcement of Tradable Development Rights Programmes
5.5.3.4 Conservation Easements
5.6 Choice of Market-Based Instruments
References
6 Green Bonds, Loans, Credit Lines, and Microfinance Financing Nature-Based Solutions
6.1 Introduction
6.2 Green Bonds
6.2.1 Benefits to Issuers and Investors
6.2.2 Green Bonds Financing Nature-Based Solutions
6.2.3 Green Bond Principles
6.2.4 Climate Bonds Standard and Certification Scheme
6.2.4.1 Agriculture
6.2.4.2 Forestry
6.2.4.3 Water
6.3 Green City Bonds
6.4 Environmental Impact Bonds
6.5 Green Loans
6.5.1 Environmental Benefits of Green Loans
6.5.2 Principles for Developing and Implementing Green Loans
6.6 Green Credit Lines
6.7 Green Microfinance
6.7.1 Assessment Process for Green Microfinance
References
7 Payments for Ecosystem Services Financing Nature-Based Solutions
7.1 Introduction
7.2 Payments for Ecosystem Services
7.2.1 Opportunities for Payments for Ecosystem Services Schemes
7.3 Payments for Ecosystem Services Actors
7.3.1 Buyers
7.3.2 Sellers
7.3.3 Intermediaries
7.4 Transaction Costs
7.5 Payments
7.5.1 Other Payment Types
7.5.2 Auctions
7.6 Contract Types
7.7 Private Versus Public Schemes
7.8 Considerations to Increase Effectiveness and Efficiency
7.9 Designing and Implementing a Payments for Ecosystem Services Scheme
7.10 Examples of Payments for Ecosystem Services Schemes
7.10.1 Payments for Forest Ecosystem Services
7.10.2 Payments for Watershed Services
7.10.3 Payments for Bundled and Layered Services
References
8 Biodiversity Offsets Financing Nature-Based Solutions
8.1 Introduction
8.2 Biodiversity Offsets
8.2.1 Restoration and Preservation
8.2.2 Biodiversity Offset Currency
8.2.3 Mitigation Hierarchy
8.2.3.1 Environmental Impact Assessment
8.2.3.2 Environmental Impact Assessments Incorporating Ecosystem Services
8.3 Biodiversity Offset Principles
8.4 Voluntary or Regulatory Biodiversity Offsets
8.5 Regulatory-Required Biodiversity Offsets
8.5.1 Developer-Initiated Offset Implementation
8.5.2 In-Lieu Fees
8.5.3 Market Mechanisms
8.5.4 Conservation Banks
8.5.5 Biodiversity Offset Aggregation
8.6 Biodiversity Offset Project Framework
References
9 Public—Private Partnerships Financing Nature-Based Solutions
9.1 Introduction
9.2 Public–Private Partnerships
9.2.1 Partners
9.2.2 Public–Private Partnership Models
9.3 Other Public–Private Partnership Approaches
9.3.1 Local Regeneration Approach
9.3.2 Policy Approach
9.3.3 Development Approach
9.3.4 Governance Approach
9.4 Risks and Public–Private Partnerships
9.5 Success Factors of Public–Private Partnerships
9.6 Public–Private Partnerships and the Sustainable Development Goals
9.7 Governing Public–Private Partnerships
9.8 Public–Private Partnership Lifecycle
9.9 Financing Public–Private Partnerships
9.10 Long-Term Performance Monitoring
9.11 Application of Public–Private Partnerships in Nature-Based Solutions
References
10 Voluntary Carbon Offsets Financing Nature-Based Solutions
10.1 Introduction
10.2 Carbon Sequestration
10.2.1 Ecosystem-Based Mitigation
10.3 Voluntary Carbon Markets
10.3.1 Carbon Offset Projects
10.3.2 Buying and Selling Offset Credits
10.3.3 Pricing of Carbon Offset Credits
10.3.4 Framework for Designing and Developing a Carbon Offset Project
10.4 Voluntary Carbon Offset Standards
10.4.1 Verified Carbon Standard
10.4.2 Gold Standard
10.4.3 Plan Vivo
10.4.4 American Carbon Registry
10.5 Voluntary Carbon Offset Project Types
10.5.1 Forestry
10.5.2 Agricultural
10.5.3 Blue Carbon
10.6 Corporate Carbon Neutrality
References
11 Extended Case Studies of Financing Nature-Based Solutions
11.1 Introduction
11.2 Case: Restoration: Wendling Beck Exemplar Project
11.3 Case: Restoration: Mobilising Finance for Forests Programme
11.4 Case: Issue-Specific: Building Resilience of Communities Through an Ecosystem-Based Approach in Namibia
11.5 Case: Issue-Specific: Nature for Climate Peatland Grant Scheme
11.6 Case: Infrastructure: New York City Department of Environmental Protection’s Green Infrastructure Grant Program
11.7 Case: Infrastructure: State of Virginia's First Environmental Impact Bond
11.8 Case: Management: Channel Payments for Ecosystem Services
11.9 Case: Management: Thames Water's Smart Water Catchments Programme
11.10 Case: Protection: Caribbean Challenge Initiative Conserving and Protecting the Marine and Coastal Environment
11.11 Case: Protection: BirdLife's Fiscal Benefits Project Developed into a Tax Incentive in South Africa
References
12 Best Practices and Conclusion
12.1 Introduction
12.2 Debt-for-Nature Swaps
12.3 Market-Based Instruments
12.4 Green Debt Financing
12.5 Payments for Ecosystem Services
12.6 Biodiversity Offsets
12.7 Public–Private Partnerships
12.8 Voluntary Carbon Markets
12.9 Conclusion
Index
