The Nature Activation Hub at Duke University is working with multiple partners to think about how to lower the barriers for private sector investment in nature-based solutions. Learn more here.
As nature-based solutions gain popularity, there is concern that public funding won’t be enough to enable implementation at the pace and scale required to achieve enhanced impact for both nature and people. As part of its work, the hub is collecting examples of how nature-based solutions financing has been achieved in the past and sharing them in a case study library. Browse the library here.
Financial mechanisms that appear in the library include:
- Blended financing: Stacking payments from sources including philanthropic or public grants, ecosystem service markets and invested corporates. Sebago Clean Waters uses this model to protect forested land within the Sebago Lake watershed in Maine to help keep drinking water clean.
- Outcomes-based financing: Can take the form of an environmental impact bond, where investors are repaid when beneficiaries see desired impacts occurring on the landscape. In California, investors provided capital for forest restoration through the Yuba Forest Resilience Bond to reduce the risk of wildfires and protect both water quality and supply. The local water utility made payments to investors based on positive outcomes on the landscape.
- Bridge financing: Upfront, low-cost capital that can be obtained quickly. Craft3 provided a local land trust with a bridge loan to quickly purchase a culturally significant coastal property in Oregon at risk of being developed. The land trust later secured a federal grant to repay the loan. The land was purchased with the ultimate goal of returning it to the Confederated Tribes of Siletz Indians.
- Markets-based financing: Generating funds to complete nature-based projects—typically through a crediting system—using established environmental markets. The Washington DC stormwater retention credit trading program requires that any new development either install onsite green stormwater infrastructure or purchase stormwater credits generated by offsite green stormwater projects. The program incentivizes private landowners to install green stormwater infrastructure because they can generate credits for this market.
- Sale of sustainable products: Cash flow to repay debt can be generated from sustainably harvested products produced at the site of an NBS project. In Washington State, the Nisqually Tribe used a low-cost loan from a state revolving fund to purchase two forested pieces of land they planned to sustainably manage to promote healthy local fish populations. The tribe is partially repaying the loans through sale of both timber and nontraditional forest products.
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