Coastal communities worldwide are being threatened by the effects of climate change. Nature-Based Solutions (NBS) can play an important role to improve coastal resilience. Through mangrove restoration, for example, shorelines are better protected, the habitats for important species are improved, carbon is sequestered, and local livelihoods can be enhanced. Because of these many benefits, NBS often outperform hard or grey infrastructure options for coastal protection in terms of economic benefits.
Successfully implementing NBS projects, however, requires innovative financing approaches and adaptive management. To investigate the enabling conditions for the financing of NBS in developing countries, the Dutch Enterprise Agency commissioned IUCN NL and Wolfs Company to conduct a market study. In the study, we investigated barriers for financing of NBS related to institutional and legal frameworks, public procurement processes, immature markets and the bankability of projects.
We also developed a business case to illustrate how blended finance structures can be developed to make NBS attractive for private investors. The potential for Blue Carbon Credits is investigated in combination with various public and private financing approaches for a coastal protection project. The study addresses the challenges to develop a mature market, but also finds great potential for NBS to improve coastal resilience.