Financing Green Infrastructure: Innovative Strategies for Urban Resilience and Water Management
Welcome to this week’s edition of the “Our Future Water” newsletter. In this issue, we focus on Financing and Incentivizing Green Infrastructure. As urban areas grow and climate change intensifies, the need for sustainable water management solutions has never been more pressing. Discover how innovative financial mechanisms are leveraged to build and support green infrastructure that manages water quality, enhances urban resilience, and restores natural environments.
Insights
Cities Using Environmental Impact Bonds to Build Green Infrastructure
Cities worldwide are increasingly turning to Environmental Impact Bonds (EIBs) as an innovative financing mechanism to build green infrastructure that enhances resilience and manages water quality. By raising capital for projects such as green roofs, permeable pavements, and urban wetlands, EIBs help reduce stormwater runoff and mitigate flood risks while providing environmental benefits and cost savings by decreasing reliance on costly grey infrastructure. This approach aligns investor interests with public goals by linking financial returns to measurable environmental outcomes, fostering a collaborative strategy in urban water management. As a performance-based funding strategy, EIBs enable cities to enhance their natural environments while managing water resources more sustainably. Discover how the District of Columbia Water and Sewer Authority used an EIB to build green infrastructure that improves water quality, boosts resilience, and restores the environment.
Stormwater Fees to Incentivize Decentralized Rainwater Management Systems
As cities face the challenges of increased rainfall and stormwater runoff due to climate change, stormwater fees are emerging as an effective tool to promote decentralized rainwater management. By imposing fees based on the impervious surface area of properties, municipalities encourage property owners to adopt green solutions like rain gardens, bioswales, and permeable pavements, which reduce runoff and filter pollutants before they reach waterways. These fees generate revenue for cities and incentivize sustainable practices among property owners. These decentralized solutions alleviate the strain on ageing urban infrastructure and support a more resilient, sustainable water management framework. Explore how Berlin encourages businesses to adopt nature-based solutions on their premises through its Berlin Strategy for Biodiversity Preservation, promoting environmental restoration and decentralized rainwater management.
Water Utilities Issuing Green Bonds to Fund Nature-Based Solutions
Water utilities are increasingly issuing green bonds to fund nature-based solutions that tackle water supply and quality issues. These bonds finance projects like wetland restoration, riparian buffers, and reforestation, which help manage water flow and enhance ecosystem services. By investing in green infrastructure, utilities can reduce dependence on traditional, costly grey infrastructure and adapt better to climate change. Green bonds attract socially responsible investors interested in supporting sustainable development while earning returns. This strategy promotes innovation in water management and contributes to broader climate adaptation and mitigation efforts, enhancing city resilience against environmental challenges. Read how Anglian Water issued the first public sector Green Bond to fund innovative water management and ecosystem restoration projects.
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