To deliver real water benefits, along with economic and environmental “co-benefits,” green infrastructure needs to be integrated on a meaningful scale – and thus financed on a meaningful scale. That might seem simple, but in reality it requires a radical paradigm shift in the way our public and private institutions think about infrastructure – and the financial means to implement and maintain it.
Already, water users, governments, and businesses worldwide are starting to recognize the value of green infrastructure, both in terms of securing water supply and reducing water risks, and have begun to increase their investments in these measures. Forest Trends’ Water Initiative works to not only demonstrate the cost effectiveness of such investments, but also to regularly catalogue and analyze them in our “State of Watershed Investments” report. The report includes both a global and regional overviews of these investments along with real-world case studies of how these investments are structured.
Generally, investments in the green infrastructure of watersheds have been growing at a robust rate of about 12% annually over the past 10 years and currently amount to about $25 billion per year. But look more closely and you’ll see that government subsidies represent the vast majority of these watershed investments while other sources remain untapped, keeping these investments from reaching their full potential.
One sector of the watershed investment marketplace that is currently underutilized is that of water users – water utilities, hydropower generators, irrigator associations, bottling plants, households, and others who stand to benefit directly from improvements in watershed services.
In Lima, Peru, we’re seeing what those benefits could look like. Here, the national water utility regulator SUNASS has allocated portions of the tariff that water users pay to their utilities to go to green infrastructure projects and climate change adaptation. Forest Trends is now working with the water utility for Lima on a 30-year master plan that lays out how nature-based interventions can complement the existing gray infrastructure to ensure the region’s long-term access to clean and safe water.
Forest Trends’ Water Initiative is also at the forefront of next-generation business models for water-stressed cities and regions, working with public and private sector leaders, green infrastructure developers, and finance experts (see here for an example). These models bring better infrastructure within reach by leveraging private capital to stretch the spending power of water users, utilities, and governments, while also helping to fill key capacity gaps that traditional approaches don’t address.
