Can Nature-based Solutions unlock real value for communities?

How communities can unlock economic and financial value with nature-based solutions

Nature-based solutions (NbS) use working ecosystems and green infrastructure to address social and environmental challenges while creating measurable economic benefits for local areas. This guide explains what NbS are, how they deliver value through avoided costs, new revenue streams and job creation, and which types of green infrastructure most consistently produce local economic impact. You’ll find practical guidance on financing pathways, project packaging, policy and governance levers, and approaches to measure return on investment. We cover funding tools—grants, public–private partnerships, green bonds and payments for ecosystem services—and show how to make projects finance-ready. Finally, the guide outlines monitoring metrics and data tools that help communities quantify benefits and attract investors, making the case for NbS as a central strategy for sustainable local development and economic resilience.

What are nature-based solutions, and how do they support local economic growth?

Nature-based solutions are actions that protect, manage and restore natural or modified ecosystems to address societal challenges while delivering economic, social and environmental benefits. They tap ecosystem services—flood attenuation, water purification, carbon storage—to lower public costs, create revenue opportunities and support livelihoods. Direct economic benefits often include fewer infrastructure repairs, lower stormwater expenses and higher property values near well-designed blue–green infrastructure. Understanding these mechanisms helps communities select interventions that align ecological function with local development goals; the next section explains how that alignment supports sustainable development.

How do nature-based solutions advance sustainable development?

NbS advance sustainable development by combining climate adaptation, biodiversity conservation and local livelihoods into an integrated approach that strengthens long-term resilience. By reducing hazard exposure and rebuilding natural capital, NbS cut municipal operating and capital expenses while supporting jobs in restoration, stewardship and ecotourism. Examples include riparian buffer restoration that lowers flood repair costs and afforestation programs that open carbon finance possibilities for communities. Framing NbS as investments in natural capital helps align planning, finance and workforce development—an alignment that guides choices about which green infrastructure types deliver the greatest economic value.

Leveraging Nature-Based Solutions for Economic Recovery and Community BenefitsNature-based solutions work with nature to tackle societal problems while producing benefits for communities and biodiversity. Yet their role in post-crisis economic recovery—after conflicts or pandemics, for example—has been underexplored. To address this gap, we reviewed 66 systematic reviews on the economic impacts of nature-based interventions. Most reported positive effects on income and employment, though critically appraised reviews showed more mixed outcomes. Differences depended on short- versus long-term trade-offs, market conditions, regional context, reliance on subsidies, and gaps between projected and realized benefits. National-scale growth assessments were rare. About half the cases involved investments in nature-based food production, with many studies from sub-Saharan Africa, East Asia and the Pacific. Harnessing nature-based solutions for economic recovery: A systematic review, A Chausson, 2024

Which types of green infrastructure generate economic value?

Different NbS deliver different economic outcomes depending on local context, scale and co-benefits. Urban trees and green roofs cut energy use and heat-related health costs; wetlands and restored floodplains reduce flood damage; constructed wetlands for stormwater can replace expensive grey systems. Specific project types—wetland restoration, green roofs and walls, riparian buffers, afforestation and reforestation—rely on elements such as trees, soils and permeable pavements to provide measurable services. Matching a project’s ecological function to local needs is essential to turn environmental design into predictable economic value, which leads into the financing approaches in the next section.

How can communities finance nature-based projects effectively?

Effective financing for NbS means matching instruments to project scale, risk profile and expected revenue or benefit streams—and preparing finance-ready documents (feasibility studies, cost‑benefit analyses and measurable outcome plans). Communities commonly blend sources: grants for design and pilots, municipal budgets for public amenities and maintenance, green bonds for scaling proven programs, PES for revenue-backed projects, and PPPs to share risk in delivery. Structuring projects with clear monitoring metrics and demonstrated avoided costs or revenue potential improves investor confidence and unlocks larger capital pools. The list below summarizes primary funding sources and typical use cases to help local decision-makers evaluate options.

1. Grants and philanthropic funds: Support feasibility, design, engagement and pilot projects.

2. Municipal budgets and capital plans: Finance public amenities, maintenance and integration with grey infrastructure.

3. Green bonds and impact investment: Scale programs that can show measurable environmental and social outcomes.

4. Payment for ecosystem services (PES): Generate recurring revenue tied to services such as water quality or carbon sequestration.

Blending these instruments can lower early-stage risk and create pathways to repayable capital; the funding-source comparison table below shows typical trade-offs and matches.

Intro to funding-source table: Use this table to match financing instruments to project type, scale and common trade-offs so communities can choose the best-fit funding mix.

Funding Source	Typical Use / Scale	Pros and Cons / Example Application
Grants (government, philanthropic)	Small to medium — start-up and pilot projects	Pro: Non-dilutive, early-stage capital. Con: Competitive and time-limited. Example: design and monitoring for a constructed wetland pilot
Municipal budget / capital	Local public amenities and ongoing maintenance	Pro: Local control and accountability. Con: Fiscal limits; ongoing costs fall to the treasury
Green bonds / impact investors	Medium to large programs with measurable outcomes	Pro: Access to long-term capital. Con: Requires strong monitoring systems and creditworthiness
Payment for Ecosystem Services (PES)	Medium — revenue-backed projects (water, carbon)	Pro: Creates steady revenue. Con: Needs robust measurement and long-term buyers

Summary: Blending funding sources reduces risk and aligns incentives. Communities that demonstrate measurable outcomes are more likely to attract larger capital flows; the next subsection explores these funding options in more detail.

What funding streams are available for community nature conservation?

Communities can access local, regional, national and international funding that should be matched to project stage and ambition. Local funds typically support small demos and maintenance, while national programs and multilateral grants back larger restoration and adaptation efforts. Emerging markets for carbon and biodiversity credits, plus PES schemes, can create ongoing revenue but require strong measurement and legal frameworks. Competitive applications usually show community support, economic valuation of benefits and a clear operations plan—elements that make projects finance-ready and attractive to public and private funders.

Financing Nature-Based Solutions: Bridging the Investment Gap and Scaling Up FundingEstimates suggest investments in nature-based solutions must increase roughly fourfold by 2050 to meet global targets for climate mitigation, biodiversity and land restoration. This chapter analyzes the financing gap for NBS and examines how innovative financial mechanisms can help close it. It reviews funding sources that could scale and mainstream NBS, identifies barriers to financing and outlines the governmental role in removing them. Finally, it assesses private‑sector incentives for engaging with NBS. Financing nature-based solutions, RC Brears, 2050

How do public–private partnerships improve financing for nature projects?

Public–private partnerships (PPPs) can bring private capital and technical skills by allocating roles, risks and returns between public agencies and private partners. Common PPP models for NbS include concession contracts for park management, outcome-based payments tied to avoided flood damage, and developer-funded green infrastructure in new developments. Success depends on transparent governance, measurable performance indicators and fair risk-sharing to protect public finances. Communities exploring PPPs should adopt procurement checklists, define performance metrics and secure long-term maintenance funding to ensure lasting benefits and accountability.

Local governments and community groups often benefit from external advisory and technical-assistance services that help package projects for finance, qualify for grants and draft outcome-based PPP contracts. These services typically provide feasibility studies, monitoring frameworks and funding matchmaking. Engaging an advisory partner can shorten the timeline from concept to funded implementation while strengthening proposals and investor confidence.

What economic impacts do nature-based solutions have on local communities?

Nature-based solutions generate a range of economic impacts: avoided infrastructure damages, higher property values, tourism and recreation revenue, and greater fiscal resilience through reduced emergency and maintenance expenses. Quantifying these impacts involves converting ecosystem services into monetary terms using avoided cost, replacement cost or benefit-transfer methods. Comparing NbS by expected local benefit helps prioritize interventions that maximize returns per dollar invested. The EAV (economic and asset value) table below compares common NbS types, the mechanisms by which they deliver value, and example metrics to support prioritization.

Intro to EAV comparison table: This table compares NbS types by the economic or financial mechanism they use to create local benefits and lists example metrics or expected outcomes.

NbS Type	Economic / Financial Mechanism	Expected Local Benefit / Example Metric
Wetlands restoration projects	Avoided flood damages and stormwater treatment	Lower annual flood repair costs; metric: % reduction in peak runoff
Urban green roofs and walls	Energy savings and stormwater retention	Reduced building energy bills; metric: kWh saved per m² per year
Riparian buffer installation	Improved water quality and lower treatment costs	Reduced water treatment expenditures; metric: mg/L pollutant reduction
Afforestation / reforestation	Carbon sequestration and timber or non-timber benefits	Potential carbon revenue; metric: tCO2e sequestered per ha per year

Summary: Comparing NbS by economic mechanism clarifies where each approach produces the most value, which then informs financing choices and monitoring metrics discussed later.

How do conservation and restoration translate into financial returns?

Conservation and restoration convert into monetary value through avoided costs (fewer emergency repairs and replacements), service substitution (natural filtration instead of costly treatment plants) and revenue generation (tourism, PES, carbon markets). Common valuation approaches include avoided cost analyses, replacement cost methods and benefit-transfer when primary studies aren’t available. For instance, estimating avoided flood damage requires modeling reduced inundation frequency and applying local asset exposure values to calculate expected annual savings. These monetized benefits form the investment case and help secure financing by showing clear paybacks for municipal budgets and stakeholders.

Financing Nature-Based Solutions through Green Bonds, Loans, and MicrofinanceA variety of debt instruments can support scaling NBS—including green bonds and environmental impact bonds, green loans and credit facilities, and green microfinance. This chapter begins with an overview of green bonds and their benefits for issuers and investors, presents recommended issuance principles and climate bond certification, and reviews green city bonds and environmental impact bonds. It concludes by examining green loans, green credit facilities and microfinance options for financing NBS. Green bonds, loans, credit lines, and microfinance financing nature-based solutions, RC Brears, 2022

What job and income opportunities do green infrastructure projects create?

Green infrastructure creates jobs across design, construction, long-term maintenance, ecotourism and monitoring, with labor intensity varying by NbS type and scale. Short-term employment spikes during installation and restoration, while medium- and long-term roles arise in stewardship, native plant nurseries and nature-based tourism. Workforce programs that prioritize local hiring and skills training can amplify multiplier effects, increasing household incomes and local spending. Quantifying jobs per dollar invested helps funders and policymakers compare interventions and design inclusive hiring strategies that boost social and economic returns.

How do nature-based solutions improve community wellbeing and social outcomes?

NbS deliver measurable health and social co‑benefits that support inclusive economic development by improving air quality, reducing urban heat and creating recreational spaces that enhance physical and mental health. These benefits can lower public health costs and raise labor productivity, contributing to local economic value. Community engagement in project design strengthens social cohesion and helps ensure benefits reach underserved groups, improving equity outcomes. The next section outlines specific health and environmental benefits and indicators communities can track to capture these co‑benefits.

What health and environmental benefits do residents gain?

Benefits include lower local temperatures, reduced exposure to air pollution, more opportunities for physical activity and improved mental wellbeing from access to green space. Useful indicators include local temperature differentials, particulate matter concentrations, hospital admissions for heat-related conditions and survey measures of wellbeing and recreational use. Quantifying these benefits alongside financial metrics strengthens the investment case by linking ecological interventions to reduced healthcare costs and higher worker productivity, supporting integrated financing across health and environment budgets.

How does community engagement improve conservation outcomes?

Active community engagement boosts conservation success and economic value by aligning projects with local priorities, ensuring stewardship and creating local employment pathways for implementation and maintenance. Practices such as co-design workshops, local-hiring agreements and stewardship programs build ownership, reduce vandalism and lower upkeep costs over time. Engaged communities also help with monitoring and data collection, cutting long-term operational expenses and improving credibility with funders. Embedding engagement from the outset increases the odds of sustained benefits and unlocks broader social and economic returns that make NbS more investable.

Which strategies support sustainable development through nature-based solutions?

Sustainable development with NbS relies on policy levers, governance models and practical best practices that align incentives between public and private actors and secure long-term maintenance and benefit realization. Policy tools such as stormwater credits, tax incentives, procurement preferences for green infrastructure and zoning that protects natural corridors can stimulate investment. Integrating NbS into procurement and performance-based contracts encourages private-sector participation, while clear governance assigns maintenance duties and revenue-sharing. The list below outlines actionable policy and financing strategies communities can use to catalyze NbS investment.

• Stormwater crediting and feesthat reward property-level green infrastructure for reducing runoff.

• Tax or fee incentivesfor developments that incorporate high-performing NbS.

• Green procurement and outcome-based contractsthat prioritize NbS in public works.

• Maintenance endowments or dedicated municipal fundsto ensure long-term upkeep.

These measures create predictable revenue streams and regulatory clarity that attract investment and secure durable returns; the following subsection covers municipal policy actions in practical terms.

How can local policies encourage green infrastructure investment?

Local governments can encourage green infrastructure by creating incentives, streamlining permitting and embedding NbS into land-use rules and capital planning. Practical steps include stormwater credit programs that lower fees for properties that reduce runoff, expedited permits for projects meeting green-design standards and explicit inclusion of NbS in municipal capital improvement plans. Municipalities should add NbS criteria to procurement to favor solutions with proven lifecycle savings. Clear performance standards and monitoring requirements reduce investor uncertainty and integrate NbS into routine infrastructure decision-making.

What best practices ensure long-term economic and environmental success?

Long-term success depends on solid practices in design, finance, monitoring and governance: design for adaptive management, secure multi-year maintenance funding and use performance-based contracts that tie payments to outcomes. Best practices include establishing maintenance funds, training local crews for stewardship, and running monitoring programs that report on ecological function and economic performance. Adaptive management cycles let projects be adjusted over time, protecting economic returns and ecosystem health. Embedding these practices in governance frameworks helps ensure NbS deliver sustained benefits that justify the initial investment.

When communities need help implementing these practices, advisory services can provide policy design, procurement templates and funding matchmaking to turn plans into action. External technical assistance can draft stormwater credit systems, structure maintenance funds and prepare procurement documents that attract private partners. Working with advisors can speed policy adoption and reduce administrative burdens while keeping community priorities central.

How can communities measure and maximize the financial value of nature-based solutions?

Measuring and maximizing financial value requires choosing the right metrics, using appropriate tools (GIS, ecosystem-service models) and employing data to shape investment decisions that improve ROI. Key indicators include benefit–cost ratio, net present value (NPV), avoided damages, jobs created per dollar invested and quantified ecosystem-service flows such as water-quality gains or carbon sequestered. Data and technology—GIS mapping, remote sensing and valuation models—enable precise targeting, optimize design and strengthen financing proposals with investor-grade evidence. The toolkit table below summarizes core metrics and tools to guide measurement and decision-making.

Intro to metrics/tools table: This table lists key metrics and decision-support tools, what they measure and practical examples of how to apply them to NbS projects.

Metric / Tool	What It Measures	How to Calculate / Example
Benefit–Cost Ratio (BCR)	Ratio of total benefits to total costs	Sum of monetized benefits divided by project costs; BCR > 1 indicates net benefits
Net Present Value (NPV)	Present value of net benefits over the project life	Discounted sum of benefits minus costs over time; positive NPV supports investment decisions
GIS + Hydrologic Models	Spatial targeting and runoff reduction potential	Use runoff and hydrologic models to estimate reduced peak flows and map high-benefit sites
Ecosystem Service Valuation	Monetary value of services like carbon and water purification	Apply local unit values (for example, $/tCO2e) or use benefits-transfer methods where local data are limited

Summary: Combining these metrics and tools builds a persuasive economic case for NbS, improving the chances of attracting finance and maximizing long-term benefits; the sections that follow define core metrics and explain the role of technology.

Which metrics best assess economic impact and return on investment?

Core metrics include benefit–cost ratio, NPV/IRR, avoided-damage valuation, jobs per dollar invested and monetized ecosystem-service flows. Different metrics persuade different audiences: NPV and IRR speak to investors focused on returns, while avoided-damage and BCR resonate with municipal decision-makers prioritizing fiscal savings. Use transparent methods and conservative assumptions to build credibility; combining several metrics gives a fuller picture that satisfies diverse stakeholders. Agreeing on priority metrics early in project design strengthens monitoring plans and funding outcomes.

Communities often benefit from external measurement support to run GIS analyses, build valuation models and prepare investor-ready financial summaries. Advisors who specialize in data, monitoring and ROI can help translate measurement outputs into stronger funding proposals and boost investor confidence.

How can data and technology improve financial decision-making?

Data and technology—GIS mapping, remote sensing and ecosystem-service models—help target sites, optimize designs and tighten valuation for NbS projects. Practical toolkits combine spatial analysis for prioritization, cost-estimating models for lifecycle forecasting and monitoring platforms to verify benefits over time. Cost‑saving tips include using open-data sources, partnering with universities for technical support and adopting standardized reporting templates to satisfy funders. Building internal data capacity while outsourcing complex analyses as needed balances cost and quality to maximize financial value and funding success.

• Use open-data sources for baseline environmental and infrastructure information.

• Partner with universities or research institutions for technical modeling and capacity-building.

• Apply GIS-based spatial analysis to target high-impact sites and refine designs.

• Deploy monitoring platforms that automate data collection for ecosystem-service tracking.

• Adopt standardized reporting templates to streamline communications with investors and funders.

Recap and next steps: This guide offered actionable lists—funding instruments, policy strategies and measurement metrics—communities can use to plan, finance and monitor NbS projects. The practical steps are clear: choose NbS that meet local needs, structure blended finance, adopt enabling policy and implement strong monitoring to demonstrate ROI to both investors and residents.