As the importance of Nature-Based Solutions (NBS) continues to grow, there has been a corresponding increase in efforts to design effective assessment indicators. Both pre-and post-implementation assessments of NBS require the use of scientifically robust indicators. While the specific indicators adopted may vary depending on the context, certain universal principles remain essential. According to Kumar et al. (2021), these principles include ensuring that indicators used to evaluate the effectiveness of NBS interventions are measurable, straightforward, attainable, time-efficient, and aligned with the project’s objectives.
Hua et al. (2020) devised an integrated evaluation method—a multi-criteria analysis process incorporating six evaluation indicators spanning technical and economic performance, as well as environmental and operational impacts. This method is employed to scrutinize the efficacy of low-impact development (LID) practices in reducing urban flooding. Technical indicators encompass runoff volume removal, flow peak reduction, and time-to-peak delay. The economic indicator is based on life-cycle cost, which includes capital expenditure, and the present value of annual operation and maintenance costs, minus the present value of salvage. Additionally, the environmental impact indicator evaluates changes to the surrounding environment, while the operational impact indicator measures the workload required for LID construction and maintenance. While the indicators utilized in this study may not directly apply to NBS solutions addressing diverse issues, the research illustrates how measurable and attainable indicators can be amalgamated to provide a comprehensive understanding of an NBS solution’s effectiveness and performance.
Various studies underscore the importance of selecting indicators tailored to the specific context, stakeholders’ needs, and the spatial (referring to physical location) and temporal (referring to time) scale of the NBS project. Kumar et al. (2021) comprehensively delineates diverse indicators and monitoring techniques applicable to NBS solutions, addressing various challenges like flood risk, drought risk, heatwave risk, landslide risk, storm surges, and coastal erosion risk. Such studies serve as valuable frameworks for outlining assessment frameworks and identifying context-relevant indicators for individual projects.
Moreover, involving stakeholders in the indicator selection process is highly recommended. Liquete et al. (2016) provides an exemplary model for stakeholder engagement. The study employs a multi-criteria analysis to assess a green infrastructure for water pollution control, utilizing the Analytic Hierarchy Process (AHP), a robust methodology facilitating the engagement of diverse stakeholders. These stakeholders encompass decision-makers, water managers, experts in both green infrastructures and standard solutions, as well as representatives of social groups affected by the project and potential users. Their pivotal role in structuring the problem hierarchy involves defining goals, criteria, and sub-criteria crucial for evaluation through active participation in meetings and dialogues. Additionally, the study’s authors propose indicators and alternative solutions, which are subsequently reviewed and either accepted or rejected by stakeholders. This ensures a comprehensive evaluation process that considers the perspectives and interests of all stakeholder groups.
The spatial scale refers to the geographic extent or area under consideration, while the temporal scale refers to the time duration over which NBS becomes fully effective (Kumar et al., 2021). Understanding the spatial and temporal context is crucial for interpreting data, identifying patterns, and making informed decisions. These scales are pivotal in determining thresholds for indicators of NBS effectiveness and performance (Kumar et al., 2021). Varying spatial scales may necessitate different threshold values for NBS performance indicators; for instance, flood reduction effectiveness thresholds may differ between local (e.g., a neighborhood) and regional (e.g., a watershed) scales. Similarly, adjusting thresholds across different temporal scales ensures the sustained effectiveness of NBS by accounting for changing conditions and long-term impacts.
NBS Funding Strategies
Despite the financing challenges associated with NBS, innovative strategies have emerged. According to Hölscher (2023), some European cities have adopted novel financing models for NBS implementation, including co-financing initiatives involving government departments and external partners. By aligning NBS projects with existing city agendas and funding streams, policy officers in these cities have successfully secured financial support for NBS initiatives. Moreover, Toxopeus and Polzin (2021) highlights promising financing strategies for implementing urban NBS across diverse urban ecological domains. These strategies include fostering public-private partnerships and utilizing community crowdfunding mechanisms.
In their study, Huston et al. (2015) delve into several financial innovations pivotal for smart and sustainable urban regeneration projects, offering valuable insights for NBS financing. They underscore Tax Increment Financing (TIF) as a vital mechanism for capturing post-project benefits, particularly within designated zones. Additionally, the authors highlight innovative funding models, including disruptive alternatives and social impact bonds, as viable sources of funding for urban regeneration projects. Moreover, they introduce the concept of a ‘smart beta’ strategy—an externally oriented funding approach aimed at identifying under-rated projects with specific characteristics such as stronger debt service capacity, higher returns, or lower volatility prospects. By considering factors beyond conventional financial metrics, this strategy aims to mitigate information asymmetry, thus facilitating the success of urban regeneration initiatives.
A literature review by den Heijer and Coppens (2023) identified five alternative financing models for NBS: public financing-public funding, public financing-private funding, private financing-public funding, private financing-private funding, and a hybrid model. Each model includes various optional strategies. For example, in the public financing-public funding model, a fund is created where government funds are lent to individuals or organizations implementing NBS. Over time, these borrowed funds are repaid to the fund through predetermined formulas, helping to cover the initial costs (referred to as state revolving loan funds). For other options/strategies discussed in the paper, we refer interested readers to read the original full text.
In conclusion, navigating the complexities of financing nature-based solutions demands innovative approaches and collaborative efforts from various stakeholders. While challenges abound, from identifying suitable funding sources to ensuring long-term sustainability, the potential benefits of NBS in addressing environmental and societal challenges are immense. By embracing diverse financing models, leveraging emerging metrics for assessing NBS effectiveness, and fostering partnerships across sectors, we can unlock the full potential of nature-based solutions to build resilient and sustainable communities for generations to come.
References:
Hua, P., Yang, W., Qi, X., Jiang, S., Xie, J., Gu, X., Li, H., Zhang, J., & Krebs, P. (2020). Evaluating the effect of urban flooding reduction strategies in response to design rainfall and low impact development. Journal of Cleaner Production, 242, N.PAG. https://doi.org/10.1016/j.jclepro.2019.118515
Huston, S., Rahimzad, R., & Parsa, A. (2015). ‘Smart’ sustainable urban regeneration: Institutions, quality and financial innovation. Cities, 48, 66–75. https://doi.org/10.1016/j.cities.2015.05.005
Hölscher, K., Frantzeskaki, N., Collier, M.J. et al. (2023). Strategies for mainstreaming nature-based solutions in urban governance capacities in ten European cities. npj Urban Sustain, 3, 54. https://doi.org/10.1038/s42949-023-00134-9
Liquete, C., Udias, A., Conte, G., et al. (2016). Integrated valuation of a nature-based solution for water pollution control. Highlighting hidden benefits. Ecosyst. Serv., 22, 392–401. https://doi.org/10.1016/J.ECOSER.2016.09.011.
Toxopeus, H., & Polzin, F. (2021). Reviewing financing barriers and strategies for urban nature-based solutions. Journal of Environmental Management, 289, 112371. https://doi.org/10.1016/j.jenvman.2021.112371
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