GrowGreen Webinar – “Financing Nature-Based Solutions in Cities”
The recent UNEP “State of Finance of Nature” Report showed that while nature-based solutions (NBS) hold the potential to address interlinked crises, the volume of finance flowing into nature remains limited. In order to meet global climate and biodiversity targets, investments in nature-based solutions need to triple by 2030 and increase four-fold by 2050 from current levels (UNEP, 2021). This calls for both public and private sector investment in nature-based solutions.
Investing in nature-based solutions helps cities to tackle flooding, heat stress, drought, poor air quality and unemployment, and helps biodiversity to flourish. Despite the increasing awareness of such benefits, there is a clear gap between current investment in nature-based solutions and the long-term financing needs of city governments to effectively respond to climate and water-related challenges.
On the 12th of September, GrowGreen held the webinar “Financing Nature-Based Solutions in Cities”. This webinar – organised by Trinomics and IUCN in the context of the GrowGreen project – brought together city representatives, civil society, businesses, financing institutions and investors for a joint discussion on how to stimulate investments in nature-based solutions.
The webinar, moderated by Kym Whiteoak, from Trinomics, started with a brief introduction to the objectives, and with an interactive session with the audience.
The participants were asked to share their opinion on the main challenges and possible solutions on the theme of financing NBS, both with public and private funding.
Increasing dedicated education, engaging citizens, enabling cooperation between sectors, and highlighting the benefits and opportunities for NBS financing through successful examples, were among some of the solutions and ideas shared.
The first speaker was Birgit Georgi, freelance expert in integrated urban development and urban adaptation to climate change. She provided an overview of the IGNITION project in Manchester. The project is part of the innovative action programme of the EU about finding innovative funding for NBS, and it started for supporting large scale NBS projects in achieving their target budget. The initial model was not particularly effective: issues were found due to the long-term and insecure return rates, accompanied by a general lack of confidence in NBS. Successively, the project focused on specific locations, to determine the beneficiaries and the interested actors, in order to create networks of co-creation and co-investments. The lessons learnt from the project highlighted that there is no one-size-fits-all model, but specifications of location and beneficiaries are fundamental to make a model effective.
Dr. Stephan Brenneisen, Head of the Urban Ecology Research group at the University of Zurich, presented the experience of the city of Basel with green roofs, combining incentives and regulations.
An effort of 25 years has made Basel the city with the highest green-roof coverage (46%) in the world. The 1st campaign occurred in 1996-98, when green roofs were a new technology on the market, due to the municipal incentives for the energy saving fund. After 1.5 years the incentives terminated, yet the market prices of green roofs decreased in the meantime, which allowed to add green roofs as a measure to building codes. Stephan Brenneisen explained that many other cities in Switzerland have followed the example of Basel, as the city’s case showed how the implementation of green roofs can be simplified once these are included in building codes and governmental regulations. The current objective for policy-makers in Basel is to define a focused function of green roofs, leaving us with the question: is it more inclusive to target climate adaptation or biodiversity?
Maria Chiara Pastore, Associate professor at Politecnico Milano and Director of Research at Stefano Boeri Architetti, presented two reforestation projects in Italy, namely Parco Italia and Forestami.
These projects are linked to each other. On the one hand, Forestami is a research Project on the planning of the City of Milan until 2030. It mainly consists of building the “Memorandum of understanding”, a database to identify which urban spaces are available for greening interventions, and to define suitable modalities. However, the pandemic and funding availability have represented limitations for this project. As a consequence, the Forestami Fund was established to maintain the project with different sources of financial support, such as donation campaigns and crowdfunding operations. On the other hand, the Parco Italia project is a research project lead by Stefano Boeri Architetti, in collaboration with AlberItalia Foundation, and financially supported by Amazon. This project provides a vision based on other global projects and networks aimed at connecting biodiversity hubs. An additional outcome of this project is the creation of a platform for connecting interested parties – such as funders, researchers, projects, etc. – with the mission to connect all existing projects which are driven by a common vision.
Kym Whiteoak, environmental economist at Trinomics and partner in GrowGreen, provided an economic perspective on financing NBS in cities. Through his intervention he aimed at answering the question: “What is the problem in involving private financing for NBS?” He explained that the main barriers are fundamental market features, and NBS are peculiar in this sense, since they produce a mixture of public and private benefits. Therefore, unless the private benefits exceed the whole costs of the project, involving private sources of investment would appear challenging.
The multifunctionality nature of NBS implies that different types of benefits can be provided, often complex to measure. There are ways to inspire private investors to contribute, yet this has to come from actual actions facilitated by governments, such as regulations (as in the case of Switzerland), or policy measures.
After listening to all of these different success stories and lessons learnt, driven by the different expertise backgrounds of the guest speakers, the webinar concluded with a panel discussion.
Michelle Oddy, project manager at Manchester City Council which is coordinating GrowGreen, joined the discussion bringing a city-government perspective to the panel. From her experience in the city of Manchester, the best approach to bring NBS forward is the persuasion and influence agenda. It is a matter of networking, she explained, as involving the right stakeholders can create movement in the right direction. Furthermore, she suggested linking the NBS agenda with the climate-resilience agenda, since they both deliver significant benefits if applied on large scales. Alternatively, it could be relevant to use more comprehensive definitions for setting strategies, which can be more familiar to or beneficial for investors, or to incentivise investments through governmental regulations. As in the case of Basel, it should become ‘business as usual’ to apply NBS in cities. However, it is necessary to firstly make a shift in the urban development paradigms and in the general public’s opinion on NBS, for instance including these measures into building regulations and building codes to facilitate the change.
Stephan Brenneisen explained the policy dynamics that facilitated the evolution of green roofs in Basel. The modality in which the subsidies started was indirectly favourable for the spread of green roofs, since the funding was generally targeting energy-saving measures. For these subsidies, there was high financial availability, which allowed to allocate funding in the installation of green roofs, even if at the time they were not as common and still associated with high installation costs. The most reluctant stakeholders to involve are normally building developers, even though this was not the case in Basel thanks to a high appreciation of biodiversity conservation. The role of politicians is also crucial in terms of decision-making for the allocation of governmental funding. Beyond governmental incentives, it is fundamental for the success of such initiatives to be included also into political discussions.
Maria Chiara Pastore provided some insights into the possible drivers behind the involvement of private investors for NBS projects, with particular reference to the case of the Parco Italia project, financially sustained also by a donation from Amazon. Evidence shows a progressive interest from companies in investing in green solutions, targeting corporate social responsibility and enabling environmental improvements. However, a mediation party for connecting private and public funding was identified as an important need.
Kym Whiteoak concluded the discussion highlighting the problem with involving the private sector for investments and calling for the need to explore co-financing opportunities. Businesses expect a significant high financial return, and the influence of policy can act directly on this, contributing to the NBS market creation, which is very important for establishing a solid network. Privates’ interest in investing in NBS projects can increase even with lower financial returns, for instance when these investments can also contribute to corporate social responsibility.
This webinar gathered the perspectives of various stakeholders on investments in nature-based solutions from different sources, and on what approaches to financing are being applied in cities. It consisted of a showcasing of successful examples, along with useful tools and opportunities for financing.
Access here the recordings of the webinar.
The presentations are available at the following links:
- IGNITION’s journey to find options to finance – implement NBS beyond the use of municipal budget and grant money Birgit Georgi
- Combining incentives and regulations to boost green-roofs in Basil Stephan Brenneisen
- Financing reforestation in metropolitan areas: The Parco Italia project and Forestami project MariaChiara Pastore
- Market values and solutions to private sector financing in cities Kym Whiteoak