Implementing Nature-Based Solutions in Urban Areas: Financing and Governance Aspects

Abstract

Fostering nature-based solutions in urban areas is an issue that receives increasing attention on the political agenda. But in many cases, only insufficient financial resources are available for the implementation of such solutions. A central issue in this context is the structure of municipal revenues, which stem from either municipal tax revenue, fees for municipal services, or fiscal transfers from other governmental levels. Many of these revenues are however absorbed by specific tasks, especially social expenditure; thus there is little room left for autonomous investments, e.g. into nature-based solutions and green infrastructure. In this chapter we elaborate on the structure of the problem such as the corresponding fiscal and constitutional restrictions and analyse which solutions are possible to allow for greater investments into multifunctional urban nature-based solutions.

State of the Art and Latest Advances in Exploring Business Models for Nature-Based Solutions

“…Depending on the administrative structure in question, many authorities will have responsibilities, resources, and capacity covering urban planning, water supply, sewage networks, wastewater treatment, highways, management of public open spaces, environmental protection, and health. Despite this broad responsibility, urban greening efforts highlight a tendency towards silos and a lack of integration between departments [7]. To move towards a more integrated approach, urban planning teams play a crucial role.…”

“…Another barrier is the existence of administrative silos in many European cities, thus lacking the integration of financial resources, technical expertise, and strategic insights from the different departments that could contribute to their development [7]. This administrative rigidity further affects the development of innovative forms of governance and business model development that require more flexible planning processes and enabling regulations.…”

“…Even before the pandemic exacerbated public funding, NBS often competed for funding with other public services, such as health or education, creating budget allocation dilemmas for local governments [4][5][6]. Despite increasing evidence of their multi-functionality and crosssectoral benefits, public budgets for NBS investment are often insufficient to drive their mainstreaming [7].…”

Global progress on financing for adaptation

“…The diversity and heterogeneity of NbS financing needs requires a similarly wide-ranging portfolio of financing mechanisms that can be tailored to different situations, sectors and stakeholders. Yet, while a large volume of literature now exists on financing mechanisms for conservation and adaptation more generally (see, for example, Climate Finance Advisors 2019; Lo, Wu and Lin 2016;Meyers et al 2020;Tonkonogy, Mazza and Micale 2018), there is as yet little guidance that looks specifically at NbS (see, for example, Droste et al 2017;Somarakis et al 2019;TNC 2018). This literature suggests that there is a wide range of financing mechanisms with potential application to NbS, some of which are already widely used and others that are still emerging (table 6.4).…”

Nature-Based Solutions in Latin American Cities

“…For instance, the EU and the Brazilian government have just released a proposed routemap for the implementation of NbS in Brazil (European Union 2019), and the EUfunded project NATURVATION published a snapshot of NbS in Mexico City (Naturvation 2017). The introduction of the new term in the region has also been highlighted by academia (Cohen-Shacham et al 2019;Enzi et al 2017;Escobedo 2019;Droste et al 2017;Keestra et al 2018;Maes and Jacobs 2015;Nesshöver et al 2017).…”