Infrastructure for a Climate-Resilient Future

4. Harnessing Nature-based Solutions for climate-resilient infrastructure

Abstract

Nature-based Solutions (NbS) are getting more attention in national and international policy debates. They are increasingly viewed as cost-effective and flexible solutions that can help countries adapt to the accelerating impacts of climate change, including on infrastructure. Yet while NbS are often praised for generating social and environmental co-benefits, understanding and actual use of NbS for infrastructure remain limited. This chapter focuses on how NbS can be part of the toolset of measures to build climate resilience into infrastructure. It shows how NbS can be used as substitutes, complements or safeguarding measures to grey solutions. The chapter reviews successful applications of NbS in climate resilience building of different sectoral infrastructures. It sketches the enabling factors needed to increase consideration of NbS in infrastructure planning and development.

Key policy insights

• Nature-based Solutions (NbS) have significant potential to enhance climate resilience of infrastructure in cost-effective and flexible ways that harness social and environmental co-benefits.

• NbS can build climate-resilient infrastructure as substitutes, complements or safeguards to grey solutions. They can be used in both urban and rural settings, and to address all types of climate risks.

• To enhance their use, NbS need to be better and consciously integrated into the policy, regulatory and institutional frameworks that enable infrastructure development. They also need to be incorporated in the technical training programmes of designers and operators of infrastructure.

• A number of national and international initiatives are under way. They foster the use of NbS for enhancing climate resilience in infrastructure, while reaping their benefits for mitigating climate change, enhancing ecosystem services and protecting biodiversity.

4.1. Introduction

Nature-based solutions (NbS) are measures that protect, sustainably manage or restore nature. In so doing, they aim to maintain or enhance ecosystem services to address a variety of social, environmental and economic challenges (OECD, 2020[1]). NbS are gaining increasing attention in national and international policy debates as cost-effective and flexible solutions that can help countries adapt to the accelerating impacts of climate change, including their infrastructure. While NbS are often praised for generating social and environmental co-benefits, understanding and actual use of NbS for infrastructure remain limited. This chapter demonstrates the usefulness of NbS for climate-resilient infrastructure and identifies ways to strengthen their use.

4.2.  The rationale for using NbS to enhance climate resilience in the infrastructure sector

Infrastructure is highly vulnerable to the impacts of climate change, and this vulnerability increases the exposure of entire economies (Chapter 1). Infrastructure makes up two-thirds of government contingent liabilities based on the impacts and costs to date of extreme events related to climate change (OECD/The World Bank, 2019[2]). Estimates show that infrastructure will represent about 66%1 of total adaptation costs globally by mid-century if the world acts to ensure continuity of essential services for populations and protect them from climate impacts (Thacker et al., 2021[3]).

NbS have gained popularity for climate resilience building in the infrastructure sector in both national and international policy agendas. A recent presidential executive order made NbS a national priority in the United States. This order, together with the Bipartisan Infrastructure Law (The White House, 2022[4]), recognises NbS for their role in building climate-resilient infrastructure. It also matches earmarked funding sources for realising NbS projects (Section 4.4.3). Published in 2013, the European Union’s Green Infrastructure Strategy has also focused on the preservation, restoration and enhancement of green infrastructure. Over the past decade, it has aimed to help stop biodiversity loss and deliver ecosystem services for people (European Commission, n.d.[5]). For its part, the Roadmap of the G20 Working Group on Disaster Risk Reduction recently highlighted the importance of climate-resilient infrastructure and the role of NbS (G20 Brasil 2024, n.d.[6]).

Accompanying these policy ambitions, several funding instruments have been promoting use of NbS for climate-resilient infrastructure. In the European Union, these instruments include financial resources as part of the overall EUR 5.4 billion LIFE (European Commission, 2021[7]), the EUR 95.5 billion Horizon 2020 (European Commission, n.d.[8]) and the European Regional Development Fund’s Greener Europe programme stream with EUR 104 million (European Commission, n.d.[9]) between 2021-27. Similarly, some countries have targeted programmes. In Germany, for example, the Federal Action Plan on Nature-based Solutions for Climate and Biodiversity invests EUR 4 billion to scale up NbS to strengthen climate resilience (BMUV, 2022[10]; OECD, 2023[11]). Meanwhile, the recent resolution of the United Nations Environment Assembly (UNEA) underlined the importance of harnessing NbS to achieve the Sustainable Development Goals (SDGs), including SDG 9 on infrastructure (UNEA, 2022[12]).

While awareness levels of NbS have historically been low, NbS continue to attract attention among decision makers, accompanied by support for NbS measures by citizens. For example, 70% of surveyed subnational governments in Hungary2 used NbS through the concept of green and blue infrastructure over the past decade. Meanwhile, nearly 80% of subnational authorities in the country considered NbS important for climate change adaptation and reduction of climate risks (OECD, 2023[13]). Similarly, citizens indicate trust and preference for using NbS compared to grey solutions: 60% of respondents in a representative EU-wide survey would choose NbS over grey alternatives to tackle social, environmental and economic challenges (European Union, 2018[14]). In addition, surveys in a wide range of cities, such as in Catania, Italy and in Catterline, United Kingdom, indicate the appreciation of citizens for NbS. They associate them with purer air, recreational opportunities, mental well-being, landscape improvement, biodiversity benefits and risk reduction (Anderson et al., 2022[15]; Sturiale, Scuderi and Timpanaro, 2023[16]).

Different definitions of NbS emphasise distinct aspects. The International Union for Conservation of Nature (IUCN) defines NbS as “actions to protect, sustainably manage and restore natural or modified ecosystems that address societal challenges effectively and adaptively, simultaneously providing human well-being and biodiversity benefits” (Cohen-Shacham et al., 2016[17]). In so doing, it places strong emphasis on restoring and conserving nature (OECD, 2020[1]). The European Commission puts a stronger focus on cost effectiveness (De los Casares and Ringel, 2023[18]), defining NbS as “solutions to societal challenges that are inspired and supported by nature, which are cost-effective, simultaneously provide environmental, social and economic benefits, and help build resilience” (EEA, 2021[19]). The UNEA defined NbS as “actions to protect, conserve, restore, sustainably use and manage natural or modified terrestrial, freshwater, coastal and marine ecosystems which address social, economic and environmental challenges effectively and adaptively, while simultaneously providing human well-being, ecosystem services, resilience and biodiversity benefits” (UNEA, 2022[12]).

For the purpose of this publication and following earlier OECD work, NbS are defined as measures that protect, sustainably manage or restore nature, with the goal of maintaining or enhancing ecosystem services to address a variety of social, environmental and economic challenges (OECD, 2020[1]). This definition acts as an umbrella term that encompasses several approaches. These include ecosystem-based adaptation, eco-disaster risk reduction and green infrastructure (OECD, 2020[1]). As such, the definition encompasses various aspects of the term, including protection and restoration of natural features, as well as the creation of features mimicking nature (Silva Zuniga et al., 2020[20]). The definition also ensures that NbS do not adversely affect the natural environment or biodiversity. NbS can be provided as standalone solutions, as well as features to complement grey “engineered” solutions – i.e. built structures and mechanical solutions (World Bank, 2021[21]). No pre-defined scale is adopted through this definition. In other words, a green roof covering a limited surface can be considered as NbS just as much as a landscape-wide forest restoration project that spans hundreds of hectares (ha).

As substitutes, complements and safeguards to grey infrastructure (Section 4.3), NbS can strengthen climate resilience. Mangroves, coastal wetlands, coral and oyster reefs can reduce risks from coastal floods, storm surges and erosion induced by climate change, while healthy forests and riparian wetlands mitigate riverine flood risk induced by climate change. For example, when Hurricane Irene hit the United States in 2011, the city of Middlebury in the state of Vermont experienced half of the peak discharge as the city of Rutland 50 kilometres (km) upstream, despite a larger drainage area. Middlebury benefited from 6 000 km of wetlands that mitigated flood risk, saving an estimated USD 1.7 million in damages (Opperman and Galloway, 2022[22]). Bioswales, bioretention ponds and permeable pavements can lower the impact of heavy precipitation events on urban wastewater infrastructure, protecting people and economic activities from flash floods. Meanwhile, green roofs, street trees and green façades can provide much needed cooling from increasing temperatures.

NbS can also mitigate the negative impact of infrastructure assets and networks on ecosystems. For example, some large infrastructure projects are planned in locations of major natural carbon sinks or biodiversity hotspots, such as the Amazon or the Congo basins, as well as forests in Southeast Asia (Ermgassen, 26 November 2019[23]). Infrastructure development threatens about one-sixth of species at risk of extinction that are on the IUCN Red List (Ermgassen, 26 November 2019[23]). While not a panacea, integrating NbS as substitutes and complements to grey infrastructure can help tackle these challenges; working with ecosystems can harness biodiversity and contribute to carbon sequestration.

While NbS could provide significant benefits, they must be implemented effectively. Effective research and design are crucial to ensure that NbS do not lead to maladaptation such as the application of unsuitable species in a given environment. To avoid such maladaptation, especially biodiversity loss, policy makers need an understanding of the baseline conditions at different levels. They must also assess the landscape-scale factors affecting the integrity and the structure of the NbS (Sowińska-Świerkosz and García, 2022[24]).

4.3. NbS as a substitute, complement or safeguard of grey infrastructure

Through providing physical protection against climate risks, NbS can be used as a substitute, complement or safeguard of grey infrastructure (Silva Zuniga et al., 2020[20]). As a substitute, NbS can act as an alternative to grey infrastructure solutions, often offering more co-benefits than their grey counterparts. For example, oyster reefs can help reduce coastal erosion and flooding during storm surges, offering alternatives to breakwaters. In the United States, the restoration of 5.9 km of oyster reefs in Mobile Bay in the state of Alabama reduced wave height by 53% and wave energy at the shoreline by 91%. It thus helped reduce coastal erosion, while producing 6 500 kilogrammes (kg) of seafood annually (equivalent to half of total harvested oysters in Alabama in 2015) and reducing nitrogen pollution (World Bank and World Resources Institute, 2022[25]).

While substituting grey infrastructure with NbS is not always an option, it is estimated that at least 11% of the global infrastructure need could be built with nature (Bassi et al., 2021[26]). In some sectors, such as water and sanitation, this share reaches up to 25%. It is less in irrigation (20%), transport and energy efficiency (10%) and energy supply (5%) (Bassi et al., 2021[26]). Together, NbS could deliver annual cost savings of USD 248 billion to cover infrastructure needs compared to grey options. At the same time, they would deliver USD 489 billion of added benefits per year, primarily due to ecosystem services (Bassi et al., 2021[26]).

As a complement, NbS are combined with grey solutions to provide better overall resilience for infrastructure networks and people. Around Tanzania’s capital, Dar es Salaam, a combination of NbS (restoration of 3 000 square metres [m²] of coral reefs and 1 245 ha of mangroves) and grey infrastructure (2.8 km of sea walls, groynes and sea defence structures) protect communities from sea level rise and rain-induced flooding, directly benefiting around 58 000 people (UNEP, 2022[27]). Such combined NbS and grey solutions are increasingly important in building resilience. As the bursting of large dams during the 2013 flood on the Elbe River demonstrated, grey structures cannot offer 100% protection against floods in all cases. NbS, such as the restoration of riparian vegetation, the reconnection of rivers with floodplains and the revitalisation of wetlands, can help reduce flood risk (Haase, 2017[28]). Completed in 2018, a EUR 35 million project in the Lödderitzer Forest in Germany removed the existing dyke and reconstructed it farther from the river. The project reconnects 600 ha of forest floodplains with the Elbe, allowing more space for the river. It is thus expected to lower flood risk by 0.3 m for a 100-year return flood in the city of Aken through a combination of NbS and grey solutions (WWF, 2019[29]).

As a safeguard, NbS can be put in place to protect grey infrastructure assets, ensure their safe functioning and enhance their operable life. In the United States, for example, Hurricane Sandy and other storms damaged road infrastructure through flooding, storm surges and erosion. In response, a marsh and wetland re-stabilisation project in Little Egg Harbor aims to protect coastal road infrastructure from flooding in the state of New Jersey. This will benefit the area’s 20 000 residents and tourists (Worth, 2021[30]). In the Philippines, mangroves act as living safeguards to avert more than USD 1 billion in damage to residential and industrial infrastructure, while protecting over 600 000 people from flooding annually (Tercek and Beck, 2017[31]). For their part, green roofs can retain 50-100% of stormwater (World Bank and World Resources Institute, 2022[25]). Consequently, many cities use these roofs to reduce pressure on grey stormwater infrastructure given increasingly frequent and intense heavy precipitation events.

The advantages of NbS in building climate-resilient infrastructure

Besides protecting against climate risks, NbS can also enhance the lifespan of grey infrastructure assets and networks, as well as help improve their efficiency, when adopted as a safeguard or complement to grey infrastructure. In South America, for example, the impact of climate change on river flows is making precipitation patterns increasingly variable. To counteract these effects, as well as reduce sedimentation, 44 million trees were planted in the catchment of the Itaipú hydropower dam that provides 90% and 19% of electricity to Paraguay and Brazil, respectively. The project restored, reforested and preserved more than 100 000 ha of land. Reducing sedimentation and ensuring more stable river flows strengthened the dam’s resilience and operations. The project has brought USD 45 million of direct financial benefits to the dam’s operation alone (Rycerz et al., 2020[32]). In the United States, flood managers in the Sacramento Valley in the state of California complemented levees and other grey flood protection infrastructure by reconnecting 60 000 ha of floodplains via the Sutter and Yolo bypasses. By reducing about 80% of discharge during floods, the bypasses and floodplain reconnection reduce pressure on levees and combined NbS and grey solutions. This helps protect the city of Sacramento from floods (Opperman and Galloway, 2022[22]).

Furthermore, NbS can provide flexible and adaptive solutions in the context of climate change. Due to their natural adaptive and regenerative capacity, many NbS can adapt to changing climatic conditions, thus helping manage uncertainties associated with climate change. For example, coastal wetlands can migrate upwards in response to rising seas (if sea level rise is within certain limits and there is undeveloped space to expand) (Borchert et al., 2018[33]; UNEP, 2022[34]). This can be a particular advantage of NbS when compared to grey solutions. Unlike grey infrastructure built to replace them, mangroves can more easily adapt to a changing climate through their natural adaptive and regenerative capacity, and thus protect communities from storms (Van Zanten et al., 11 November 2021[35]). Similarly, NbS have the potential to recover following extreme weather events. Unlike sea walls, mangroves can recuperate following hurricane damage (as long as hurricanes do not alter ground topography) (Imbert, 2018[36]; UNEP, 2022[34]). Thus, as dynamic solutions, NbS can help avoid the lock-in grey infrastructure could bring.

4.3.1. The economic rationale for NbS to enhance climate resilience in the infrastructure sector

Though overall estimates are difficult to make, growing evidence demonstrates the economic benefits of NbS. In Canada, NbS for infrastructure in the province of Ontario directly generated CAD 4.64 billion in gross domestic product (GDP) and CAD 8.6 billion in gross revenues in 2018. By 2030, this could increase to CAD 13.2 billion in gross revenues and CAD 7 billion in direct GDP (GIO, 2020[37]). In Singapore, the Active, Beautiful, Clean Waters Programme re-naturalised rivers, streams and lakes. By shrinking the flood-prone area by 100 times (from 3 200 ha to 32 ha), the USD 300 million investment between 2007-11 helped save over USD 390 million in water costs (Kapos et al., 2019[38]). In the United States, the restoration of coral reefs in Puerto Rico and Florida offers similar savings. The reefs have the potential to save nearly USD 273 million per year in avoided direct and indirect flood damages (Storlazzi et al., 2019[39]). Overall, in the United States, coral reefs are estimated to provide annual flood protection benefits worth USD 1.8 billion and save more than 18 000 lives every year (Storlazzi et al., 2019[39]). In Viet Nam, aquaculture expansion had damaged mangrove forests. A USD 9 million investment was launched to restore these forests along the shore of 166 communes. The project aims to reduce coastal erosion and flood damage, saving USD 15 million in avoided damages (World Bank and World Resources Institute, 2022[25]). Globally, the estimated value of avoided flood damage by mangroves was at least USD 65 billion (Menéndez et al., 2020[40]; World Bank and IBRD, 2023[41]).

Estimates show that NbS for infrastructure cost half as much as grey alternatives, while generating 28% more in added value (Bassi et al., 2021[26]). In terms of coastal protection, salt marshes and mangroves are two to five times less expensive than submerged breakwaters to lower wave heights by 0.5 m and reduce coastal erosion (Narayan et al., 2016[42]; Dasgupta, 2021[43]). Furthermore, investors could save up to an estimated USD 248 billion annually by replacing grey solutions with NbS for only 11% of the global infrastructure need (i.e. in cases where it is practical and feasible to do so), while generating USD 489 billion in benefits (Bassi et al., 2021[26]). Using this logic, New York City in the United States invested USD 1.5 billion over nearly three decades to protect the watershed that provides the source of its water. This avoided spending around USD 8-10 billion to build a water filtration plant (Gartner et al., 2013[44]).

These cases show that NbS are generally cheaper than grey solutions, but the reverse can also be true. This makes it key to quantify the value creation (added benefits) and avoided losses for making the case for NbS. For example, installation costs of permeable pavements can be two to three times higher than that of asphalt and concrete. Meanwhile, the installation of green roofs is two to five times more expensive than that of their traditional counterparts (World Bank and World Resources Institute, 2022[25]). In addition, green roofs require more frequent maintenance than their traditional counterparts to maintain good results (Enzi et al., 2017[45]). In certain cases, long-term maintenance costs are borne by different actors than those covering the one-time investment in the installation of NbS. For example, the national government might (co‑) finance the installation of urban green spaces, while local authorities cover long-term maintenance costs.

However, the added benefits of NbS can often justify their implementation. Permeable pavements can reduce runoff volumes by 90% (World Bank and World Resources Institute, 2022[25]). Similarly, green roofs can retain 50-100% of excess precipitation in cities. Moreover, their longer lifespan and co-benefits can compensate for their implementation (World Bank and World Resources Institute, 2022[25]). In Australia, a case study found that a green roof in the city of Sydney can be up to 20°C cooler than its traditional counterpart (Irga et al., 2021[46]). The same study found a green roof can ensure building insulation, increase urban biodiversity (particularly of avian and insect species) and reduce air pollution.

NbS can also offer substantive economic benefits as safeguards to grey assets, as well as combined solutions. In the United States, a case study of stormwater management explored options for the city of Philadelphia in the state of Pennsylvania. It found that hybrid solutions (combining NbS and traditional options) created over 23 times more added benefits than grey solutions alone. Examples of NbS included green roofs and permeable pavements, while traditional options included storage tunnels. These hybrid solutions generated USD 2 846 million in benefits compared to USD 122 million for grey solutions. The benefits were generated through increased environmental aesthetics, heat stress reduction, and water and air quality improvements (Stratus Consulting, 2009[47]). Similarly, the city of Portland in the state of Oregon invested in urban NbS, such as bioswales. These complement grey solutions to tackle growing quantities of sewage and stormwater runoff. In so doing, the city has reduced peak flows by 80-94% in the target areas since 2007. A USD 9 million investment in NbS combined sewer overflows and lowered pressure on grey infrastructure. It thus delivered USD 224 million in reduced maintenance costs (World Bank and World Resources Institute, 2022[25]).

NbS also show to have net positive labour market impacts. While numbers for the infrastructure sector are unavailable, around 75 million people already work on NbS. This translates to 14.5 million full-time equivalent jobs as many of these employment opportunities are part-time (ILO, UNEP and IUCN, 2022[48]). The city of Rennes in France estimated that labour costs represent 80-99% of maintenance costs for green spaces (Barometres, 2017[49]), creating several long-term job opportunities. In particular, the creation and management of urban green spaces can establish one to five full-time jobs per hectare, while using NbS for watershed improvement can create one to three jobs (WWF and ILO, 2020[50]). The protection of coastal ecosystems is estimated to create 17 jobs for every USD 1 million spent (Edwards, Sutton-Grier and Coyle, 2013[51]). In Canada, NbS for infrastructure directly employed over 84 000 people in the province of Ontario in 2018, a figure that could grow to 103 000 by 2030 (GIO, 2020[37]).

NbS can also benefit the economy by helping to partially counterbalance rising temperatures that lead to reduced productivity. Even under a 1.5°C temperature rise scenario, conservative estimates forecast that 2.2% of total working hours could be lost by 2030 due to high temperatures globally – equivalent to 80 million full-time jobs. This could cost USD 2 400 billion in 2030 (nearly nine times more than in 1995), with low- and middle-income countries experiencing more profound impacts (Kjellstrom et al., 2019[52]). Green spaces can contribute to lower these impacts by reducing extreme temperatures. They do this both through evapotranspiration and by a favourable material composition that allows them to avoid heat absorption better than an engineered surface. For example, an 850 m² green wall on a public building in Vienna, Austria provided a cooling benefit of 712 kilowatt hours (kWh). This is equivalent to the production of 80 air conditioning units of 3 000 watts working for eight hours (Enzi et al., 2017[45]), thus lowering air temperatures in the building. Capitalising on such natural cooling benefits, a 20% increase in green areas (e.g. small parks, street trees, green roofs and walls, etc.) in Glasgow, United Kingdom could reduce surface temperatures by 2°C in 2050. This would reduce the extra urban heat island effect predicted for the city under a high warming scenario by a third to a half (Emmanuel and Loconsole, 2015[53]).

Through their strong risk reduction potential, NbS can also be put in place to ensure the insurability of infrastructure assets in the context of increasing climate risks. To reduce insurance loss value and insurance payments for claims over time, the insurance sector is increasingly turning towards NbS (Costa et al., 2020[54]; EIB, 2023[55]). In the United States, a project setting back levees on the Missouri River reduced flood risk for 1 455 homes, offering protection against 160-to-200-year return floods. By allowing the river to flow in a more ecological manner and reconnect around 420 ha of floodplains with the river to avoid the overtopping of levees, the project halves insurance property premiums (MunichRe, 2022[56]). Recently, academics and insurance providers collaborated to study further how the combination of NbS with insurance can boost coastal resilience and cover the increasing protection gap. The study drew on earlier research that showed how capitalising on the potential of coral reefs could lower wave energy and protect shorelines against storm damages and flooding. It found that a hypothetical 5 km coral reef restoration costing USD 6.45 million could lower and reduce risk of coastal flooding due to storm surges by 50% in a two-year period. In so doing, it could lower insurance premiums for coastal assets by over 56% in five years (Reguero et al., 2020[57]).

4.3.2. Social and environmental co-benefits of NbS

In addition to boosting the resilience of infrastructure assets, NbS can bring several environmental and social co-benefits that act as significant incentives for their implementation. Through enhancing human well-being and the quality of life in diverse ways, social co-benefits are often drawn out as an important advantage of various NbS measures. NbS protect people from climate risks and other natural hazards. Mangroves, for example, protect around 15 million people every year from flooding (Menéndez et al., 2020[40]). Several NbS measures capitalise on this protective potential of NbS. In the United States, the USD 60 million “Living Breakwaters” project grows oyster reefs off the coast of Staten Island. It protects residents from storm surges and coastal flooding in the nearby metropolitan area around New York City (Thiele et al., 2020[58]).

Health benefits offer further incentives to realise NbS projects. By helping reduce the urban heat island effect, NbS can help save the lives of citizens vulnerable to heat exposure. Inspired by evidence that green roofs can lower indoor air temperatures by 1.5-3 °C, a simulation study found that installation of green roofs could reduce deaths of the elderly. In Hungary, for example, green roofs on all buildings with elderly residents would reduce heatwave-related mortality in the city of Szeged by 63% by 2030. The benefits of green roofs were even higher (up to 71%) in the municipality of Çankaya, Türkiye (Marvuglia, Koppelaar and Rugani, 2020[59]). Similarly, trees are estimated to lower temperatures by 7-15°C through shade and evapotranspiration, thus mitigating the urban heat island effect (UNEP, 2021[60]), while providing health benefits due to cleaner air. Indeed, trees in ten of the world’s megacities alone are estimated to provide a health benefit of USD 482 million annually due to reduced air pollution (Endreny et al., 2017[61]). In Spain, 200 000 trees in the city of Barcelona were estimated to have removed 5 000 net tonnes of CO₂ and 305 tonnes of polluting compounds in 2008 (Ajuntament de Barcelona, 2013[62]; Cohen-Shacham et al., 2016[17]). Moreover, urban green areas are estimated to remove 1.97-3.8 g of ozone per square metre every year (Aevermann and Schmude, 2015[63]; Le Coent et al., 2021[64]). Furthermore, as green roofs can lower sound transmission by 10-20 decibels, several NbS measures deliver health benefits by lowering noise levels (Liberalesso et al., 2020[65]).

One of the key environmental co-benefits of NbS is their carbon sequestration potential. Mangroves, for example, can store over 900 tonnes of carbon per hectare (Alongi, 2012[66]). At the same time, wetlands protect people from floods. Sri Lanka, for example, has a project to restore and protect wetlands, woodlands, swamps, freshwater lakes and grasslands around the capital of Colombo. The wetlands absorb up to 90% of the city’s GHG emissions and clear the air, while protecting residents from flooding. Combined with grey solutions (e.g. pumping stations and water diversion tunnels), the project benefited 2.5 million citizens (World Bank, 2023[67]). In addition, in the Republic of South Africa, a study found that 67 000 m³ of green roofs in the city of Tshwane could store over 25 000 kg of carbon annually. At the same time, they could reduce energy needs by close to 690 000 kWh, saving 605 tonnes of CO₂ emissions every year (WWF, 2021[68]).

NbS can also help reduce pollution and enhance the quality of ecosystems by air, soil and water quality improvements. Moreover, if implemented effectively, NbS also help create positive outcomes for biodiversity. For example, wetlands can lower concentrations of nitrate of water flowing through them by over 80% (Millennium Ecosystem Assessment, 2005[69]). This helps reduce eutrophication, as well as protect freshwater animals from toxic nitrate levels. Since 1998, the 0.6 ha Hovi Research Wetland in Finland has reduced nutrient runoff from agricultural processes, as well as prevented eutrophication and harmful nutrient concentrations for living beings. In a decade, the wetland reduced phosphorous and nitrogen concentrations by an average of 62% and 50%, respectively. As a result, the wetland retained 90% of soil material and nutrient load flowing into it. Waters running through the wetland reached a cleaner status than those purified at water treatment plants (WWF Finland, 2013[70]). Similarly, bioswales and rain gardens were observed to clean stormwater of heavy metals by up to 90% (World Bank and World Resources Institute, 2022[25]).

Besides protecting coastlines from storm surges and tidal erosion, oyster reefs also have a significant potential to purify water. A single oyster on average purifies close to 190 litres of water from algae, phosphorus, nitrogen and other substances every day (NCCOS Video, 2 March 2020[71]). As regards biodiversity, the choice of species should be considered carefully to ensure measures create biodiversity-based resilience and multi-functional landscapes. For instance, non-native plantings can decrease erosion or urban heating but have negative impacts on biodiversity (Seddon et al., 2020[72]).

Overall, for NbS to maintain its multiple benefits sustainably, NbS should remain effective under changing climate conditions. This requires incorporating adaptive management strategies that allow for adjustments over time based on monitoring and evaluation (see Monitoring and evaluation), planning for future climate scenarios. For example, coastal NbS, like mangrove restoration, should consider projections of sea level rise.

4.4. Scaling up the use of NbS for infrastructure resilience

Despite the great potential of NbS to help build climate resilience in the infrastructure sector, their use remains scattered and mainly applied at pilot scales. NbS continue to be promoted in several policy frameworks, such as the EU Green Infrastructure Strategy or EU Biodiversity Strategy (EEA, 2021[19]). However, despite this progress, a recent study warns the application of NbS in the European Union remains mostly limited to small-scale projects (EEA, 2023[73]). Indeed, of nearly 1 400 NbS projects in the European Union and the United Kingdom, nearly three-quarters covered less than 1 km² (EIB, 2023[55]). While this may be the appropriate scale for certain NbS (e.g. green roofs, green façades), the low coverage demonstrates that NbS projects are mostly implemented on small spatial scales.

The main reason for limited uptake of NbS lies in the absence of an enabling environment for their use. Traditional policy, regulatory and financing frameworks present hurdles that prevent NbS from being considered on equal footing as grey solutions, which are perceived as simpler, less risky and more familiar. Moreover, NbS require distinct spatial scales, and often longer timescales for their intended benefits to materialise compared to grey solutions. These factors also act as barriers to NbS uptake (OECD, 2020[1]). In addition, as NbS require working with dynamic ecosystems, their planning, implementation and maintenance requires a special set of skills (OECD, 2020[1]). Limited technical capacity among public and private sector actors represents an additional barrier to upscale the use of NbS (OECD, 2021[74]; OECD, 2020[1]). This is often combined with low levels of awareness on NbS, leading decision makers, infrastructure planners and citizens to often focus on “conventional” grey solutions instead of NbS.

To promote wider uptake of NbS, national governments need to design innovative institutional, policy, regulatory and financial frameworks. These should enable the use of NbS by both public sector agencies and authorities, as well as private actors. Most relevantly, complex governance arrangements, the lack of coherence across sectoral regulations and limited financing must not inadvertently discourage different actors from embracing NbS. Investing in raising awareness and technical capacity are also key. Often, public and private sector actors have little knowledge on the use and benefits of NbS, and they see them as too expensive and difficult (OECD, 2020[1]).

4.4.1. Enabling environment

Institutional arrangements

Governance arrangements are often ill-suited to foster NbS planning and implementation. As NbS cut across sectoral boundaries, geographical areas and jurisdictions, they usually require the collaboration of a diverse policy and practitioner community (Bisello et al., 2019[75]). NbS planning and implementation build on regulations, policies and instruments that go beyond a single agency’s responsibility or jurisdiction. Instead, NbS fall into the mix of measures that can be employed by many actors. These include environmental ministries, national flood and drought management agencies, public works or infrastructure agencies, infrastructure operators, and regional and local authorities. Moreover, other non-governmental actors (e.g. landowners and Indigenous communities) also play an important role in their uptake (OECD, 2020[1]). For instance, the creation of green spaces to mitigate the risk and impact of flooding might require the co‑operation of different stakeholders. These could range from spatial planning agencies and private actors to housing, environment and water management authorities across different levels of government. This requires a cross-sectoral and cross-governmental approach to raise awareness or enhance technical capacity, as well as to improve the policy and regulatory environment for NbS. Nevertheless, the different actors involved tend to work in silos, with limited collaboration and co‑ordination across sectors (Nature Squared, 2021[76]; OECD, 2023[77]; OECD, 2021[74]).

To upscale use of NbS, it is therefore vital to create an institutional framework that enables and promotes co‑ordination, co‑operation and knowledge exchange across agencies, sectors and levels of government (i.e. national, regional and local authorities). Notably, co‑ordination among governmental bodies should foster synergies across policies and initiatives relevant for NbS, mainstream benefits of NbS to accelerate action and address trade-offs between them where necessary (OECD, 2021[74]; OECD, 2020[1]). Moreover, the institutional framework needs to define clear mandates, roles and responsibilities across the different phases of the NbS life cycle, i.e. from project design, appraisal and approval to construction, operation, monitoring and maintenance (OECD, 2023[77]). This can help facilitate co‑ordination when combined with information sharing, partnerships and exchange of good practices, while also avoiding overlapping projects, inertia and duplication (OECD, 2020[1]).

Successful NbS projects also depend on governance arrangements that engage with non-governmental actors throughout the life cycle to ensure their sense of ownership. This process, for example, can involve private landowners who contribute to financing NbS. It could also engage citizens, including Indigenous peoples and other diverse social groups who can co-design projects with urban planners. Involving non-governmental actors often requires development of innovative tools and mechanisms, such as public consultation exercises. However, it can offer significant benefits from NbS throughout all stages of the project – from design to maintenance (OECD, 2023[77]; OECD, 2021[74]; OECD, 2020[1]).

Policy and long-term planning

Policies, including long-term strategies, roadmaps and sectoral strategies across different levels of government, play a vital role in scaling up NbS for climate-resilient infrastructure. An increasing number of governments define a long-term strategic vision for NbS, recognising its role in climate resilience building. This helps promote the wider adoption of NbS by public and private players and enhance the climate resilience of infrastructure.

At the international level, the Kunming-Montreal Global Biodiversity Framework set a globally agreed ambition for countries to promote NbS at national level. In keeping with the agreement, at least 30% of degraded ecosystems should be under effective restoration (Target 8) by 2030. It also set out to restore, maintain and enhance nature’s contributions to people through ecosystem services (Target 11) by the same date. For its part, the European Commission launched a Strategy on Green Infrastructure3 in 2013, which highlighted the potential of ecosystem-based approaches to enhance climate resilience. Most relevantly, the strategy aims at creating an enabling framework for green infrastructure implementation. This will ensure ecosystem-based approaches become standard for spatial planning and territorial development, even at the national level (European Commission, 2013[78]).

Ambitions to increase implementation of NbS, notably in support of infrastructure, are also reflected in national-level policy planning. France’s Green and Blue Framework represents the national green development strategy, supporting resilience to climate change via green and blue infrastructure. Land use and landscape planning throughout the country needs to consider the framework (Office Français de la Biodiversité, 2022[79]). Similarly, Germany and England provide a strategic framework for the development of green infrastructure via Germany’s Federal Green Infrastructure Concept (BfN, 2017[80]) and Natural England’s Green Infrastructure Framework (Natural England, 2024[81]).

Besides strategies dedicated to scaling up NbS in the infrastructure sector, NbS are also increasingly recognised within infrastructure policy frameworks, which highlight their role in building climate resilience. In the United States, the Bipartisan Infrastructure Law in 2022 recognised that NbS can act as infrastructure and help enhance the operable lifetime and overall performance of grey infrastructure (The White House, 2022[4]). Accompanying the law, the White House released a roadmap identifying five strategic areas for scaling up NbS (The White House, 2022[4]). Similarly, the National Infrastructure Strategy in the United Kingdom recognises the role of NbS in enhancing climate resilience (HM Treasury, 2020[82]).

Such dedicated strategies at the national level provide overarching policy directions to facilitate use of NbS for climate-resilient infrastructure. However, they need to be mainstreamed across key environmental policies and actions. With their role in enhancing climate resilience across various sectors of the economy, adaptation strategies are key instruments to promote NbS for building resilience of several sectors, including infrastructure. Across the OECD, many countries include NbS as part of their national adaptation plans (NAPs) or strategies. For example, national adaptation policies from Australia, Canada, Denmark and Norway consider NbS as a complementary approach to grey infrastructure in certain sectors, such as wetlands and urban greening. Moreover, Australia’s National Climate Resilience and Adaptation Strategy 2021-2025 also recognises the key role of NbS to address coastal, river and urban flooding (OECD, 2020[1]). In addition, biodiversity strategies also have a key role in promoting NbS. Many European countries mention NbS as part of overarching national biodiversity strategies, including Austria, Belgium, Finland, Germany, Greece, Hungary, Italy, Luxembourg, Malta and Spain. In addition, throughout the European Union, the EU Biodiversity Strategy to 2030 encourages investments in green and blue infrastructure, as well as systematically including NbS and healthy ecosystems in urban planning (European Commission, n.d.[5]).

Although overarching national climate and biodiversity strategies are instrumental to promote use of NbS, governments also need to mainstream NbS into other sectoral policies relevant to infrastructure. Sectors such as transport, water management and disaster risk reduction can help NbS gain traction for climate-resilient infrastructure and drive their implementation on the ground (OECD, 2021[74]). Some countries have started mainstreaming NbS into sectoral policies for different areas. For instance, Mexico, the United States, the United Kingdom and New Zealand refer to NbS as a key strategic measure for coastal protection (OECD, 2020[1]). In the Netherlands and in Belgium, NbS has a central role in plans for restoration of rivers. In Italy, natural retention measures are included in the National Strategic Plan for the EU Common Agricultural Policy. They are identified as a solution to integrate mitigation of hydro-geological risk with the protection and restoration of ecosystems and biodiversity. In Germany, a new water strategy recognises the importance of NbS in water infrastructure development (BMUV, 2021[83]). Similarly, the EU Action Plan on the Sendai Framework or Disaster Risk Reduction 2015-2030 promotes NbS for disaster risk reduction. Meanwhile, the Urban Agenda for the European Union explicitly refers to promoting NbS and green infrastructure in urban areas to enhance climate change adaptation and resilience (EEA, 2021[19]).

Despite this growing recognition of NbS in sectoral strategies, several gaps remain in their mainstreaming. This is partly due to potential conflicting interests between NbS and other policy objectives. For instance, many NbS measures consume land, which can conflict with other policies, especially in urban and peri-urban areas. Further work is needed to understand trade-offs and synergies between different policy objectives and inform appropriate safeguards to avoid unintended consequences of NbS (OECD, 2021[74]; OECD, 2020[1]). Finally, it is important to recognise the role of subnational strategies in ensuring the mainstreaming of NbS throughout all levels of government (Chapter 6).

A growing number of subnational governments recognise NbS. In the capital of Hungary, the implementation of NbS is supported by Green Infrastructure Development and Maintenance Action Plan (Dezső Radó Plan) of the city of Budapest (City of Budapest, 2021[84]; OECD, 2023[13]). Similarly, in the United Kingdom, the Green Infrastructure Strategy (2015-25) in the city of Leicester facilitates use of NbS to enhance resilience to climate change impacts (Leicester City Council, 2015[85]).

Mainstreaming NbS into both sectoral and subnational policies must consider challenges that can differ markedly depending on the region and sector, highlighting the need for context-specific approaches. NbS implementation depends on factors such as climate risk exposure and vulnerability; capacity to implement measures; and policy, regulatory, institutional and cultural contexts. For instance, in arid and semi-arid regions, water resource scarcity and land degradation pose significant challenges to the establishment and survival of new vegetation. In the Sahel, efforts to create a “Great Green Wall” have faced challenges due to the extreme variability of rainfall and the fragile nature of the soil, making it difficult to sustain tree growth (IISD, 2022[86]). Urban areas are often faced with challenges related to limited space. Different challenges also exist between sectors. Spatial planning may face challenges related to land tenure and access rights, complicating the implementation of NbS. Meanwhile, the agricultural sector needs to overcome challenges related to balancing food production and security with ecological conservation that may reduce yields (FAO, 2019[87]; World Bank, 2019[88]).

Equally important is the role of local authorities in considering local communities in planning and implementing NbS. They can ensure that NbS are tailored to address specific local challenges, leverage traditional knowledge and foster community ownership. For example, local authorities in cities across Latin America, including Medellín in Colombia and Quito in Ecuador, have worked with communities to identify areas for green development. They have integrated these spaces into social programmes to address issues such as public health and recreation (C40, 2019[89]; DW, 2019[90]).

Regulatory framework

The regulatory frameworks governing spatial planning, land use, water supply and building codes can play a key role to unleash opportunities for NbS and promote their implementation on the ground (OECD, 2020[1]). For instance, spatial planning determines how housing, infrastructure development and land preservation are envisaged, and hence the role for NbS. Similarly, building codes comprise legal prescriptions on the materials and design for new and existing buildings, which could create opportunities for use of NbS. In recent and ongoing reforms to building codes, countries have started promoting use of NbS. For example, some require a minimum for green space areas on and around new buildings, as well as permeable material in driveways to increase water absorption and retention capacities (OECD, 2021[74]).

As mentioned above, prevailing norms and technical standards consider grey infrastructure as the main, or only available and feasible, option. This has resulted in a bias towards exclusive use of grey infrastructure by governments, local authorities and private actors. To upscale use of NbS, regulatory frameworks and requirements should be reformed to make them fit for NbS, or even make them the default option. In Norway, for example, the central government provides guidelines for adaptation planning to encourage subnational governments to use NbS in their land-use and general planning processes. In 2018, it introduced a requirement for both counties and municipalities to consider use of NbS in planning processes before the use of alternatives such as grey infrastructure. If subnational authorities choose grey infrastructure, they must justify their decision to the central government (OECD, 2021[74]; Norwegian Ministry of Local Government and Rural Affairs, 2018[91]). Similarly, in the United States, the Living Shoreline Protection Act of 2008 in the state of Maryland sets out the prioritisation of measures that preserve the natural environment. It allows use of grey infrastructure only under specific circumstances (State of Maryland, 2008[92]).

Some countries have already started updating their regulatory norms and technical standards to enable use of NbS.

• In the United States, the US Army Corps of Engineers streamlined the permitting process for living shorelines. This aims to incentivise these measures and correct the comparative advantage of hard infrastructure projects in terms of shorter timeframes to receive permits (OECD, 2020[1]). In another example, Executive Order 13690 in 2021 set out the Federal Flood Risk Management Standard requiring federal agencies to amend their floodplain policies to consider NbS (The White House, 2022[93]).

• In the United Kingdom, all new buildings in Wales over 100 m² must have sustainable drainage systems (SuDS) in place for surface water, such as infiltration ponds, street trees, green roofs and other green surfaces. This aims to facilitate the filtration of water following heavy precipitation. Before construction can begin, the SuDS installations must comply with the statutory SuDS standards, and be approved by the SuDS Approving Body in local authorities (Welsh Government, 2019[94]). In England, SuDS are compulsory for all new developments of ten homes or more. Indeed, it is considering amendments to legislation that make SuDs standards mandatory for all new homes (Defra, 2023[95]).

• In Switzerland, the Building and Construction Law in the city of Basel was amended in 2002 to mandate green roofs on all new and renovated buildings in the city. The amendment included requirements for green roofs such as use of native soils and a mix of native species, and compulsory consultations with the city’s green roof expert for roofs above 1 000 m². As a result, Basel has one of the highest per capita area of green roofs globally (Somarakis, Stagakis and Chrysoulakis, 2019[96]).

• In Canada, in 2009, the city of Toronto became the first North American city to adopt a green roof bylaw. It stipulates green roofs for new developments covering more than 2 000 m² (City of Toronto, 2009[97]).

• The uptake of green roofs has also increased in other cities around the world. In the United States, New York and San Francisco passed legislation requiring green roofs for certain developments. Meanwhile, Washington, DC, encourages use of green roofs through its stormwater management regulations (New York City, n.d.[98]; San Francisco, 2017[99]; DC.Gov, 2019[100]). Via binding land-use plans, around half of Germany’s municipalities have also made green roofs compulsory in new urban development projects (van der Jagt et al., 2020[101]).

Despite these good examples, challenges remain to ensure the regulatory framework enables and promote the scaling-up of NbS. Regulatory frameworks, ranging from land-use zoning to permitting and safety and performance codes, are often too complex to navigate. Consequently, they can result in high resource and transaction costs.

4.4.2.  Promoting NbS at the project level

NbS need to be part of infrastructure planning and design more systematically, more frequently, and at a larger scale. To that end, decision-making processes on public infrastructure investments should consider NbS, especially at the design, appraisal, procurement and selection phases.

Promoting the use of NbS in project design, appraisal and selection

Benefits and costs are assessed as part of project preparation, especially project design and appraisal. Appraisal guidance is key to ensure NbS are considered on an equal footing with grey solutions. Historically, it has been difficult to quantify the economic benefits of NbS, particularly at the project level, which often acted as a barrier for using NbS. Traditional valuation approaches and appraisal tools, notably cost-benefit analysis (CBA), have not considered social, environmental and economic co-benefits from NbS. Nor have they typically considered the value of nature or that of its loss. Consequently, grey infrastructure is often favoured over NbS (Bassi et al., 2021[26]). These methods have often failed to consider other specificities of NbS, such as the longer timescales required for their benefits to materialise. Thus, they fail to (fully) consider their benefits (Kuhl and Boyle, 2021[102]). Furthermore, these valuation methods often failed to fully consider the potential benefits of NbS with respect to climate change. Different climatic conditions may increase the need for cooling benefits or stormwater runoff reduction, heightening the value of NbS. Furthermore, under changing conditions, NbS may operate more efficiently than grey solutions (Kuhl and Boyle, 2021[102]).

Traditional appraisal tools can also be combined with or replace new methods to ensure a more comprehensive analysis and reporting on indicators. This can help grasp the ancillary social, environmental and economic advantages of NbS and their benefits to build climate resilience. This can be applied within environmental impact assessment (EIA) with the results also used to inform the appraisal process, including the CBA. Moreover, the use of CBA to compare alternative options can be complemented with multi-criteria analysis, which compares project alternatives on both quantitative and qualitative criteria. It therefore enables a fairer comparison with projects that do not necessarily score high on monetary outcomes but do have benefits according to nature and social indicators (Department for Levelling up, Housing and Communities, 2009[103]; OECD, 2023[104]).

Efforts are under way to overcome the persistent challenge of undervaluing NbS in CBAs. In the United States, for example, the Office of Management and Budget is reviewing central guidance on CBA to ensure federal agencies can better consider NbS in federal regulatory and funding decisions (The White House, 2022[93]). In addition, the country is developing a National Strategy for a System of Natural Capital Accounts. This aims to allow tracking of the economic benefits of investing in NbS (The White House, 2022[93]). Similarly, in 2009, the Netherlands developed the biodiversity points method. This measures the amount and quality of ecosystem services and biodiversity and their changes (i.e. the project’s impact) in a standardised way. National guidance on CBA recommends use of biodiversity points with calculations including use of climate scenarios to account for changing climate impacts (Bos and Ruijs, 2019[105]).

Furthermore, methodologies have emerged that can better capture the economic benefits of NbS. Sustainable asset valuation (SAVi) enables investors and policy makers to consider the cost of economic, social and environmental risks and externalities over a project’s lifetime (IISD, 2023[106]). SAVi also accounts for risks overlooked in traditional valuation approaches. This includes, for example, how water shortages may influence the attractiveness of a wastewater treatment plant in a decade’s time.

Over recent years, these methodologies demonstrated in several cases that NbS benefits outweigh their implementation and planning cost in a range of contexts. For example, studies found the benefit-cost ratios of preserving mangroves for coastal protection were more than five-to-one (World Bank and IBRD, 2023[41]). Similarly, the benefits of planting street trees – including cooling and less stormwater runoff – were found to outweigh the cost over 30 times in the city of Tshwane, Republic of South Africa (WWF, 2021[68]) (Table ‎4.1). The assessment of the costs and benefits of NbS is particularly vital in economies with limited financial resources, especially developing countries, to engage their limited resources as efficiently as possible.

Table ‎4.1. Cost effectiveness of NbS vs. grey solutions based on alternative valuation approaches

Location	NbS	Grey solution	Issue it aims to tackle	Description
Aarhus, Denmark	Retention pond	Closed basin	Heavy precipitation	Creating a retention pond was found to be almost 11 times cheaper than a closed basin to reduce pressure on the sewage system. While both structures are estimated to have the same operable lifespan, annual maintenance costs of NbS were estimated to be 4.6 times cheaper (Núñez Rodríguez et al., 2023[107]).
São Paulo, Brazil	Forest restoration	Dredging of reservoirs	Deteriorating water quality	The restoration of 4 000 ha of forest to reduce sedimentation was found to be USD 4.5 million cheaper than dredging of water reservoirs to enhance water quality for the city’s 22 million residents, while generating a net benefit of USD 69 million over three decades (Ozment et al., 2018[108]; GCA, 2019[109]).
Barantas River Basin, Indonesia	Land restoration measures (agroforestry, riparian bamboo plantations and absorption wells)	Water reservoir	Floods, erosion and deteriorating water quality	Land restoration measures were found to be more cost-effective solutions to address water scarcity and ensure the water provision for residents and industry compared to building a water reservoir. In addition, over two decades, NbS measures are expected to deliver USD 104-131 million of net benefits through averted flood and erosion damages, combined with carbon storage, improved water quality, bamboo production and job creation (Bassi et al., 2021[110]; Bechauf et al., 2022[111]).
Paterson Park Precinct, Johannesburg, Republic of South Africa	Stream re-naturalisation	Concrete culvert	Floods and water scarcity	A fully NbS approach (the complete re-naturalisation of a stream) was found to bring USD 10.6 million in averted flood damages over 40 years compared to a hybrid option combining NbS with a concrete culvert (which would have avoided USD 9.4 million in damages in the same period). The NbS option would also provide additional water supply worth around USD 3 million for the city over four decades through enhanced soil permeability (Wuennenberg, Bassi and Pallaske, 2021[112]; Bechauf et al., 2022[111]).

Project selection and prioritisation offer a further opportunity to promote NbS in infrastructure projects, but this first requires defining indicators and/or targets specific for NbS. Each project should then make clear how it contributes to or affects such NbS indicators or targets. For example, the European Environment Agency has developed a set of indicators to measure the share of green areas in cities and the distribution of green urban areas for urban infrastructure projects (EEA, 2021[113]).

Procurement and delivery of NbS

Public procurement represents another regulatory instrument the public sector can use to promote NbS at the project level (OECD, 2020[1]). Green public procurement, adopted in a number of countries (European Commission, 2008[114]), includes technical requirements and contract clauses that encourage use of NbS. For example, it requires use of specific construction materials or native plant species that can bring environmental, flood or drought management benefits to the management of public buildings or spaces (OECD, 2021[74]).

4.4.3.  Financing NbS

Investments in NbS face a significant gap (Chapters 1 and 3). While figures on NbS investment in the climate-resilient infrastructure sector are lacking, it is estimated that only USD 154 million is spent per year on NbS globally. This is less than half of the USD 384 million needed annually by 2025. Moreover, it is only a third of the annual USD 484 billion by 2030 required for limiting global atmospheric warming below 1.5°C, halting biodiversity loss and land degradation (UNEP, 2022[115]). Only 0.3% of all funding dedicated to urban infrastructure is estimated to finance NbS measures (WEF, 2022[116]). This demonstrates the scale of the funding gap for NbS in the infrastructure sector.

Historically, besides the overall funding gap, a large majority of funding for NbS is scattered across various funding sources. This results in a patchwork of options that stakeholders have to navigate when planning and implementing NbS projects for climate-resilient infrastructure. Previous OECD analysis in Hungary, the United Kingdom and Mexico underlined this notion (OECD, 2023[13]; OECD, 2021[74]). For example, several funds provide opportunities for funding NbS in the United Kingdom. These include the GBP 200 million COVID-19 recovery measure to construct SuDS and water storage areas (Defra, 2020[117]). However, overall funding for NbS measures remains scattered (OECD, 2021[74]). In addition, NbS projects generally remain small-scale. Of 1 364 NbS projects studied in the United Kingdom and the European Union, 72% covered less than 1 km². Moreover, 81% had less than EUR 10 million in overall investment and the total budget was less than EUR 1 million for 44% (EIB, 2023[55]). Overall, the typical investment in NbS projects in the European Union is less than EUR 2 million per project and most projects are financed by multiple funding sources (EIB, 2023[55]).

To overcome the funding gap, more governments have recently started investing in NbS for climate-resilient infrastructure as part of standalone initiatives or overarching programmes. Between 2015 and 2018, Peru invested USD 300 million in 209 NbS as part of public investment projects through the invierte.pe programme. This aims to incentivise use of NbS as complements, safeguards or alternatives to grey infrastructure that build climate resilience (OECD, 2020[118]). In 2022, Germany dedicated EUR 4 billion to the Federal Action Plan on Nature-based Solutions for Climate and Biodiversity (BMUV, 2022[10]), part of which fosters synergies for boosting NbS for climate resilience. In the United States, the government allocated USD 8.7 billion to strengthen the climate resilience of transport systems, including through NbS. Meanwhile, it allocated USD 8.6 billion to restore and conserve coastal habitats, helping protect communities from storms (The White House, 2022[4]). In addition, the G20 Sustainable Finance working Group is working on increasing funding for NbS to strengthen climate resilience under the Brazilian Presidency of the G20 in 2020 (G20 Brasil 2024, 2024[119]). Despite these recent funding envelopes for NbS, further dedicated funding sources will be required to realise the full potential of NbS in enhancing the climate resilience of infrastructure.

Funding options

Several options can be used to fund NbS interventions (Chapter 3) (Table ‎4.2). These options can include sources from public funding, such as subsidies, taxes or tax reductions. They can also provide options for the private sector to partially or fully play a role in funding NbS through, for example, green bonds, loans or payments for ecosystem services (PES). Indeed, besides further increasing public funding for NbS, significant potential lies in scaling up private investments for funding NbS measures. Overall, private investments for NbS only make up around 17% of NbS funding. The remaining 83% are largely covered by public sources based on global estimates (UNEP, 2022[115]).

Private investments in NbS did start to grow recently. Between 2021 and 2022, for example, private financial flows for NbS increased by USD 2.3 billion (UNEP, 2022[115]). However, further potential could be tapped to scale up private finance for ensuring the climate resilience of infrastructure via NbS. A recent study covering close to 1 400 NbS projects in the European Union and the United Kingdom found only 3% of projects had private sector financing. This funding paid for over half of the overall project costs (EIB, 2023[55]).

Several vital measures could increase private finance. A portfolio of bankable NbS projects could be developed in co‑ordination with relevant stakeholders. In addition, innovative financing mechanisms, such as blended finance, green bonds, PES or land value capture, could be harnessed (World Bank, 2022[120]; OECD, 2023[121]).

Table ‎4.2. Financing options for NbS to enhance climate resilience in the infrastructure sector

Option	Description	Example
Subsidies	Rebating the initial installation costs, subsidies are common ways to incentivise the installation of NbS for infrastructure.	Frankfurt, Hamburg and Stuttgart provide subsidies for green roofs, if minimum substrate depth of 8-12 cm is guaranteed. Subsidies on average for green roof installation across eight German cities are over 40 EUR/m2.
Taxes	Special taxes or tax increments can be used to finance climate-resilient infrastructure projects.	A moderate annual parcel tax of USD 12 per parcel was levied (after approved by a ballot from residents) to finance restoration of wetlands in the San Francisco Bay area.
Tax reductions	Tax reductions (e.g. property tax reduction, stormwater fee discount, etc.) to encourage the use of NbS.	In Mexico City, property tax reductions of 10-25% are offered depending on the type of green roof installed. Hannover and Hamburg offer 50% and 70% reductions in stormwater fees, respectively, if owners adopt green roofs.
Green bonds	Green bonds are debt instruments that are exclusively used to finance projects providing environmental benefits. They can help rapidly raise funds for climate-resilient infrastructure investments from multiple investors and pay them back gradually.	The Netherlands issued nearly EUR 6 million in green bonds to finance the Room for the River project.
Insuring NbS	Natural assets (e.g. coral reefs, dunes, etc.) can be protected by parametric (event-based) insurance products.	As Hawaii’s coral reefs protect communities from coastal risks, a parametric insurance product was set up to ensure funds for the reefs restoration in case wind speed rates exceed 57 mph.
Insurance discounts for risk reduction	The insurance sector can promote use of NbS by providing discounts on insurance premiums.	The United States Federal Emergency Management Agency’s National Flood Insurance Program has a voluntary community rating scheme. Through this scheme, residents of communities that restore or conserve wetlands, green spaces or natural elements of the landscape that reduce flood risk receive a 5-45% discount on their flood insurance premiums.
Grants	Grants provided by governments or private donations can fund NbS projects with specific objectives, usually selected as a result of a competitive application process.	In the state of Massachusetts, coastal communities can apply to fund NbS under the Coastal Resilience Grant Program by the Massachusetts Office of Coastal Zone Management. Projects funded in 2023 included dune and salt marsh restoration works to enhance resilience to storms.
Loans	Loans can involve market-rate loans by private institutions, concessional loans by development finance banks, subnational or national governments, or subsidised loans.	The Natural Capital Financing Facility set up by the European Investment Bank and the European Commission in 2015 offered loans between EUR 1‑15 million to finance NbS for public buildings (e.g. green roofs, rain garden), green and blue infrastructure until 2022. Similarly, in the United States, the Shore Up Connecticut Loan Program provided a low-interest loan of up to USD 300 000 to help homeowners in the state of Connecticut located in flood-hazard zones finance flood resilience retrofits. Borrowers must comply with certain resilience criteria to receive the loan (e.g. elevate homes one foot above the 500-year flood level).
Payments for ecosystem services (PES)	PES encompass diverse tools (e.g. sustainable forest management). These can be financed via direct public or private payments, as well as tax incentives (giving preferential tax rates to those providing ecosystem services) and other innovative ways.	To reduce sedimentation of the hydropower plant on the Reventazón River in Costa Rica and ensure biodiversity protection, farmers received PES. In return, farmers protected and reforested areas within the catchment and implemented specific agroforestry measures to help control erosion and harness environmental goals.

Source: (Adaptation Clearing House, 2013[122]; EIB, n.d.[123]; Green Finance Platform, n.d.[124]; Massachusetts Government, n.d.[125]).

4.4.4.  Capacity to design, implement and maintain NbS

Despite the growing demand for NbS, skills gaps and capacity barriers remain a key obstacle for their use. Informing and enhancing capacity to design, implement and maintain NbS are therefore important to scale up use of NbS. Good practice databases, networking and capacity building platforms can help existing projects inspire new ones. Several EU-funded initiatives provide such platforms for NbS professionals, funded via the LIFE, Horizon 2020, Interreg and other funding instruments (OECD, 2023[13]) (Box ‎4.1). Many national governments complement these platforms by domestic initiatives. The Atlas of Natural Capital provides a repository of nature capital, including use of NbS for infrastructure solutions in the Netherlands (Atlas Natural Capital, n.d.[126]). In France, the Ministry of Ecological Transition and Territorial Cohesion has a website focusing on NbS, including case studies on climate-resilient infrastructure and NbS (Ministry of Ecological Transition, 2023[127]). Similarly, the Swedish Environment Protection Agency has a website gathering relevant information and tools to support NbS (and green infrastructure specifically) for climate-resilient infrastructure (Naturvårdsverket, n.d.[128]).

Box ‎4.1. EU-funded platforms facilitating NbS for climate-resilient infrastructure

The Urban Nature Atlas, developed through the Horizon 2020-funded Naturvation project, provides a repository of over 1 000 NbS projects in European cities and beyond, many of which address infrastructure challenges. The “analyse” function of the platform allows users to better understand NbS projects by comparing them (e.g. their economic, social and environmental impact, implementation focus, scale, finance, governance) (UNA, 2023[129]; UNA, 2023[130]). Similarly, the Horizon 2020-funded Nature4Cities project created a platform to share NbS projects, including those focusing on climate-resilient infrastructure. Besides the database of projects, the platform also provides a networking platform for NbS professionals to discuss common challenges with peers. In addition, it provides NbS experts and municipalities with tools relevant for project development (e.g. tools for EIA, socio-economic assessment, project selection, implementation models) (Nature4Cities, 2017[131]). For its part, Network Nature provides a knowledge repository of experience and tools from over 30 Horizon 2020 projects. It also channels the latest results from scientific research, as well as providing capacity building events and networking for professionals working with NbS (NetworkNature, 2023[132]). Furthermore, it is connected to the EU’s OPPLA platform, which shares, obtains and creates knowledge and research on NbS, as well as acting as a networking platform for professionals working with NbS (OPPLA, 2023[133]). Climate-ADAPT of the European Environment Agency provides a platform of projects with an adaptation focus, including several detailed case studies that enhance infrastructure resilience (EEA, n.d.[134]). Focusing specifically on the water sector, the EU Directorate General Environment’s Natural Water Retention Measures Platform provides a list of solutions, practical guidelines and case studies for developing nature-based green infrastructure.

Guidelines also play an important role in the implementation of NbS. In the United States, to facilitate scaling up of NbS, the federal government released the Nature-based Solutions Resource Guide as a compendium of 30 federal NbS examples. This includes several climate-resilient infrastructure projects, as well as other tools and guidance (The White House, 2022[135]). Similarly, the United States’ National Oceanic and Atmospheric Administration (NOAA) published several guidelines for planning and implementing NbS for climate-resilient infrastructure. These included guidelines on CBA for assessing NbS against specific climate hazards, amending land-use codes and financing options (NOAA, n.d.[136]). In addition, the United States’ Environment Protection Agency has guidelines to facilitate the planning, design, operation and maintenance of NbS for enhancing climate resilience in the infrastructure sector (EPA, 2023[137]). In Canada, the not-for-profit International Institute for Sustainable Development (IISD) hosts the Nature-Based Infrastructure Global Resource Centre. It provides examples of asset valuations of NbS project case studies to help make the business case for NbS benefits (NBI Global Resource Centre, n.d.[138]).

Professionals working with NbS in planning, design and implementation need the right knowledge to facilitate good outcomes for NbS projects. This is especially true because NbS management in infrastructure can require different skills than that of grey solutions. Such professionals include engineers planning NbS interventions, decision makers approving NbS projects, workers maintaining NbS on a day-to-day basis and others. NbS-specific knowledge includes understanding ecological and socio-economic environments, how NbS measures interact under different climate scenarios and the interaction of NbS with planned/existing grey infrastructure. For instance, pests may affect trees that are planted to protect watersheds from increasingly frequent heavy precipitation events. NbS may require alternative considerations compared to traditional risk and uncertainty assessments for grey solutions; alternative workforce skills and knowledge; and alternative actions to manage uncertainty effectively (Browder et al., 2019[139]), such as planting a mixture of tree species to make them less prone to pests than monoculture.

Recognising the information gap for professionals working with NbS, several countries and not-for-profit actors started to provide training and advice. To help local authorities, associations and other relevant actors enhance their knowledge on planning, designing and maintaining NbS, Germany’s Ministry of Environment (BMUV) and Federal Agency for Nature Conservation (BfN) opened the Competence Centre for Nature-based Solutions (Kompetenzzentrum Natürlicher Klimaschutz, KNK) as part of the Action Programme on Nature-based Solutions for Climate and Biodiversity in 2023. It provides advice on NbS projects and funding opportunities, offers networking opportunities and organises training events on NbS (Kompetenzzentrum Natürlicher Klimaschutz, 2023[140]). The Nature-Based Infrastructure Global Resource Centre hosted by IISD in Canada offers free training courses for infrastructure planners, policy makers and investors on NbS for infrastructure (NBI Global Resource Centre, n.d.[138]). Meanwhile, NOAA in the United States offers several courses for coastal managers and planners to implement NbS to manage coastal climate risks (NOAA, 2023[141]). Providing training for a broader audience, the IUCN Academy offers courses on NbS that enable participants from all sectors to gain a Professional Certificate on NbS (IUCN, n.d.[142]). Providing training on NbS procurement and public private partnerships respectively, Germany’s Competence Centre for Innovative Procurement and the Global Center on Adaptation also offer targeted courses (Mačiulytė and Durieux, 2020[143]; GCA, 2021[144]). Despite these efforts, however, several countries still lack targeted initiatives to scale up NbS (OECD, 2023[13]).

4.4.5.  Monitoring and evaluation

Monitoring and evaluation (M&E) is key to ensure that NbS fulfil the functions for which they were built. As NbS involve working with dynamic ecosystems, they may not be able to deliver all intended project objectives. For example, pests may invade urban trees, which may erode their capacity to reduce extreme temperatures. Similarly, climate change may influence ecosystem processes in yet unknown ways, affecting the ability of NbS to deliver their risk reduction potential. If such negative inclinations are found during M&E processes, further steps in the maintenance phases are needed to deliver NbS interventions (Somarakis, Stagakis and Chrysoulakis, 2019[96]). It is thus crucial to develop an appropriate set of indicators that compare the outcomes of NbS projects to previous long-term trends at regular intervals based on indicators (Somarakis, Stagakis and Chrysoulakis, 2019[96]). M&E findings should then inform the adjustment of design or maintenance of NbS.

The selection of indicators for monitoring NbS projects depends on the specific aims of the project, including selection of appropriate monitoring timeframes (Kumar et al., 2021[145]). Overall, NbS indicators can be classified into i) process indicators (actions implemented compared to those planned, e.g. the number of seedlings planted); and ii) result indicators (assessing the outcomes achieved by the project compared to a baseline, e.g. change in the number of bird populations) (IISD, 2023[146]). Ensuring that indicators are monitored for appropriate timeframes is also central for the success of monitoring efforts. Long enough timeframes for monitoring are not only key to the resilience of project outputs but are also central for the appropriate maintenance of NbS projects over their lifetime (Section 4.4.2).

Existing practices in monitoring NbS

While historically several NbS projects lacked appropriate monitoring, some recent projects have started to develop indicators that can track resilience. For example, following completion of the Nosy Hara marine protected area rehabilitation in Madagascar, several indicators are monitored. These concern, among others, the resilience of the coral reefs (e.g. occurrence of coral diseases, fishing pressure, nutrient pollution, temperature variability) and increases in the number of species, coral growth (IISD, 2023[146]).

Thanks to Earth observation programmes and satellite monitoring techniques, ever expanding spatial resolutions and temporal scales have become available for long-term monitoring of NbS projects (Somarakis, Stagakis and Chrysoulakis, 2019[96]; Chrysoulakis et al., 2021[147]). These are often combined with in situ measurements on site (e.g. the monitoring of urban temperatures, particulate matter, species diversity). Such measures offer complementary data to provide a comprehensive picture on the performance of NbS (Somarakis, Stagakis and Chrysoulakis, 2019[96]). In Valladolid, Spain, a 350 m² green façade was constructed on the El Corte Inglés shopping centre to reduce urban temperatures while improving air quality and building aesthetics. In situ techniques measure mean and peak daytime temperatures, as well as concentrations of nitrogen oxides and particulate matter concentrations (European Commission, 2021[148]).

Following the development of indicators and the availability of datasets, monitoring approaches can become increasingly comprehensive, encompassing the different stages of the project’s lifecycle. In Norway, a green flood barrier was constructed in the Lillehammer municipality to reduce flood risk due to snowmelt and extreme precipitation in the Gudbrandsdalen Valley. It ensures the new barrier – which replaced the old artificial barrier with natural materials – allows more space for the river. In all, 47 indicators were developed in five areas to monitor the project. These comprise i) risk reduction (e.g. peak flow volume, extent of the flooded area, exposed residential areas); ii) technical and feasibility aspects; iii) environment and ecosystem (e.g. chemical water parameters, diversity in species); iv) effects on the society (e.g. number of visitors, the number of new pedestrian and cycle paths); and v) effects on local economy (e.g. number of jobs created) (European Commission, 2021[148]).

Another example is the indicator repository developed by Gonzalez-Ollauri et al. (2021[149]). They established over 40 indicators to assess NbS effectiveness in limiting risk of landslides and erosion. Their overarching “Rocket Framework”, which can be applied to different climate risks, enables the assessment of wider ecosystem functions and services. The NbS key performance indicators are categorised into a socio-ecological and an eco-engineering domain. The first represents economic impacts (e.g. income generation), as well as ecosystem services and co-benefits (e.g. accessibility of green spaces, recreation activities) brought about by implemented NbS. The latter refers to provision of tangible functions seeking to manage or mitigate the climate hazard (e.g. soil mass movement and deformation, and land exposure).

4.5. Conclusions

Overall, NbS have significant potential to achieve climate resilience in the infrastructure sector. While NbS cannot be a panacea for all future issues related to climate impacts, they have an important role in strengthening resilience. As the chapter demonstrated, NbS are gaining increased attention in national and international policy agendas, with a growing number of funding streams and capacity building tools mobilised to promote their use. However, the use of NbS still remains limited compared to their potential in resilience building. This calls for policy and institutional frameworks to encourage the use of NbS considering their specificities. Similarly, the design, appraisal, procurement and selection phases of infrastructure projects, including adjusting valuation approaches, should ensure the benefits of NbS are considered appropriately. Overcoming the finance barriers for NbS projects is also an important milestone for strengthening use of NbS for climate-resilient infrastructure. Despite recent funding boosts in some countries, investments in NbS face a significant gap. This forces stakeholders to navigate scattered funding sources across a patchwork of options. Ensuring enhanced public funding for NbS, combined with appropriate incentives for the private sector to invest in NbS, is thus a key step for scaling up NbS for climate-resilient infrastructure. In parallel, it is also important to enhance the capacity to design, implement and maintain NbS. Finally, strengthening M&E of NbS helps ensure adaptative management is based on dynamic ecosystem needs and changing climate scenarios. This plays a key role in guaranteeing that NbS delivers the functions for which they were implemented.

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Notes

← 1.  The estimate does not count buildings unlike the Thacker et al. (2021[3]) study.

← 2.  The survey was conducted by the Prime Minister's Office, Hungary in 2021 with 48 subnational governments responding to it (OECD, 2023[13]).

← 3.  GI is defined in the Strategy as “a strategically planned network of natural and semi-natural areas with other environmental features designed and managed to deliver a wide range of ecosystem services. It incorporates green spaces (or blue if aquatic ecosystems are concerned) and other physical features in terrestrial (including coastal) and marine areas” (European Commission, 2013[78]).