Greening America's Rivers: The Potential of Climate Financing for Nature-Based Water Quality Improvement

Abstract

Nature-based solutions have been used to improve in-stream water quality in lieu of building electricity-consuming gray infrastructure. We propose that carbon financing can provide a potential novel incentive to accelerate this transition. Combining data on impaired waters, treatment technologies, and life cycle greenhouse gas emission accounting in the continental United States, we compare traditional gray treatment technologies to green technologies which include constructed wetlands, saturated buffers, and agricultural management practices. We show that across the contiguous United States, green alternatives are less expensive, less energy intensive, and less carbon intensive than gray infrastructure alternatives and could save $15.6 billion USD, 21.7 terawatt-hours of electricity, and 29.8 million tonnes of CO2-equivalent emissions per year while sequestering over 4.2 million CO2e per year over a 40 year time horizon. While incentivizing adoption of green infrastructure remains challenging because of utility and regulator risk aversion, we find that the green solutions may have the potential to generate $679 million annually in carbon credit revenue (at $20/credit), which represents a unique opportunity to help institutionalize green solutions that meet the same water quality standards as gray infrastructure.