Scaling Up Nature-Based Solutions Through Policy And Finance

This is the sixth in a seven-part series that explores the application of Nature-based Solutions (NbS) to water management in Africa for climate adaptation (and drawn from the report Waterways to…

Scaling Up Nature-Based Solutions Through Policy And Finance

Okavango River, Botswanagetty

This is the sixth in a seven-part series that explores the application of Nature-based Solutions (NbS) to climate and nature challenges, with a focus on water management in Africa for climate adaptation (and drawn from the report Waterways to Resilience). This post focuses on scaling up NbS through policy and financial mechanisms. Previous posts in this series have demonstrated that Nature-based Solutions (NbS) have considerable potential to contribute to managing water challenges in Africa. However, funding and implementation of NbS programs and projects lag far behind, both in Africa and globally. Although there is evidence that funding for NbS is growing, the UN Environment Program's Adaptation Gap Report 2020 concludes that adaptation funds are not keeping up with needed investment in adaptation: Funding for NbS makes up only a tiny fraction of total adaptation and conservation finance, despite many commitments by governments, the private sector, philanthropy and finance institutions for scaling up ambition and investments in NbS. Overall, it appears likely that the primary global trends in the UNEP report apply to Africa: · There is a current gap – and looming future gap – in adaptation funding;

· NbS funding remains a small part of overall adaptation funding; and

· Support for NbS is growing but the level of support and adoption lags far behind the potential for NbS projects and programs to deliver benefits. These projects and programs are likely to deliver a high return on investment. For example, the Global Commission on Adaptation estimated that an investment of US$1.8 trillion in a range of adaptation activities, including climate-resilient infrastructure and mangrove protection, would generate US$7.1 trillion in avoided costs and environmental and social benefits. With that potential for economic benefits, why are NbS not being implemented as large-scale projects and programs in most countries?

Structural barriers to broad uptake of NbS can be placed into three broad categories (Figure 1): · Socio-cultural barriers include constraints related to incentives and behaviors of key groups.

· Institutional barriers include obstacles related to the policies, conventions, and rules that collectively shape governance relevant for NbS. For example, NbS may require more cooperation from more entities – which may be governed by different, or even conflicting, policy objectives. Limited capacity for managing NbS and limited familiarity with NbS among planners and engineers can reduce the likelihood that they will be selected as options.

· Economic barriers include constraints related to funding and incentive structures. Many of the diverse benefits of NbS can be hard to quantify, particularly environmental and social benefits, so these may not be adequately incorporated into decision processes. Furthermore, even if these other benefits could be easily quantified, mechanisms, such as markets, may not exist to link the beneficiaries of the service with those that provide the service. Insufficient or poorly directed finance results in limited funding for NbS while, simultaneously, large amounts of public funds flow toward subsidies that are often environmentally harmful.Figure 1. An integrated set of policy levers and systemic enablers can overcome the structural ... [+] barriers to NbS implementation. (From WWF 2021) WWF

In a 2o21 report, WWF offered a framework of systemic enablers and policy levers to overcome these barriers. The overarching systemic enablers include: (1) inclusive governance; (2) smart spatial planning; and (3) progressive economic and financial regulation (Figure 1). Specific recommendations for overcoming constraints to scaling NbS for addressing water challenges fall into three primary categories:

Ensure alignment of policy, funding and capacity. Although it is generally noted that NbS programs suffer from an investment gap, increasing funding without a conducive policy context, or sufficient capacity among decision makers and local managers, can result in in ineffective, or even detrimental, outcomes and investments that fail to yield positive impacts. So, it is important that when external funders prioritize NbS and increase funding for it, their investments should be made through inclusive and collaborative programs that emphasize gaining government support and building capacity at multiple levels.

Provide the evidence. Clear evidence of the effectiveness of NbS interventions, and an articulation of the specific benefits that flow to different stakeholders, can help mobilize and sustain support. Therefore, NbS investments should encompass strong monitoring and evaluation programs so that evidence can be collected and communicated. Private sector interest in NbS will increase if these benefits can be demonstrated credibly, particularly where those benefits are clearly aligned with reducing operational risks and/or corporate water stewardship priorities.

Close the funding gap by tapping into diverse public and private sources. Funding from a range of sources will be needed to close the gap in funding for adaptation. Although precise estimates are difficult to derive, the UNEP reports that existing commitments will not close the current funding gap and needs will rise rapidly. Because NbS projects generally provide multiple benefits, these projects and programs should be able to draw on multiple sources of funding (e.g., those for climate adaptation, climate mitigation, and biodiversity; Figure 2). Although support from international donors, corporations and NGOs will be helpful for getting NbS programs underway and providing initial demonstrations of benefits, ultimately the greatest impact may come when NbS approaches are fully integrated into the main budgets of ministries that manage rivers, coasts and other resources. NbS will reach their full potential when they become standard operating practice – and major components of budgets and management – from the agencies that manage water supplies, flood risk, urban stormwater and coastal defense.Figure 2. A conceptual figure illustrating that well-designed NbS projects can potentially draw on ... [+] funding from three global sources of funding: climate mitigation, climate adaptation, and conservation. WWF


Everyone involved in the climate and water worlds has a responsibility to ensure that Nature-based Solutions and improved water resources management are central to efforts to mitigate, and adapt to, climate impacts. Beyond the societal challenges that NbS can address, and beyond their environmental and social benefits, NbS projects represent an important opportunity for boosting employment—particularly relevant as countries invest in pandemic-related recovery funds. The most job-intensive NbS interventions include reforestation, ecosystem or watershed rehabilitation, and management of invasive species.

Recommendations to increase uptake of NbS

Policy makers should: Promote NbS alongside more sustainable and resilient ‘grey' infrastructure to tackle water challenges and reduce vulnerability to climate change as well as increase the health and resilience of the continent's rivers, lakes and wetlands; Invest in adaptive institutional capacity and enabling frameworks for successful and sustainable implementation and management of NbS efforts; Ensure budgets include sufficient funding to implement NbS at a scale that can have meaningful, lasting impact on Africa's watersheds and water resources, and increase financing for water resource management and climate adaptation overall; and Call for 50% of global climate finance to be directed to adaptation, following the leadership of the African Development Bank, and for a larger portion to fund NbS.

Private sector companies should: Understand their water impacts and risks and engage in water stewardship efforts focused on measurable impact in watershed health. Promote NbS as a critical part of the solution to shared water challenges facing businesses, communities and economies, and incorporate NbS into their water stewardship strategies, where relevant. Use their influence and scale to catalyze collective action on NbS by engaging in platforms that allow different companies and organizations from across industries and sectors to work together at basin or landscape scales to address shared water risks and have measurable impact.

Financial institutions should: Develop a strong understanding of water risk and financial value, including the opportunities that exist to create value. Engage with existing efforts and start to create offerings that finance NbS. Invest in NbS as an opportunity to both create value and mitigate risks to assets and investments by engaging with existing efforts and mechanisms to fund NbS and creating new offerings and innovative channels for financing NbS Implement and support policies that lay the foundation for credible green investments since an enabling environment is critical to support the necessary expansion in funding for NbS.