R&D highlights edition 2019

PROJECTS Ecosystems and environmental quality 24 FINANCING NATURE-BASED SOLUTIONS FOR DISASTER RISK REDUCTION T here is a growing consensus that nature-based solutions represent great potential for the challenges and increasing risks facing our societies and economies as a result of climate change. However, there are major obstacles to their effective implementation at the scale required to achieve the envisioned results for Disaster Risk Reduction (DRR) and the provision of key water services. A crucial step in achieving a higher uptake of these solutions is the development of guidelines and a decision support framework that will guide local stakeholders in the design of implementation arrangements that are fit for purpose and that solve some of the challenges associated with poor implementation, examples being funding gaps, unclear business cases and limited interest from the private sector. The aim of our research is to develop a methodology based on institutional economics and blended finance principles to support the design of implementation arrangements - the Financing Framework for Water Security - and tailor it to the specific characteristics and implemen­ tation challenges of nature-based solutions/green infrastructure for water security. This research is part of the H2020 project NAture Insurance value: Assessment and Demonstration (NAIAD), which was established to operationalise the insurance value of ecosystems for water- related risks by developing and testing concepts, tools and applications at nine demonstration sites across Europe in the context of the overarching concept of nature-based solutions (NBS). The result is a handbook for the Implementation of Ecosystem- Based DRR to provide support for our demonstration cases in the H2020 project NAIAD and for the closing of the NBS implementation gap for DRR in the European Union and worldwide. The Financing Framework for Water Security, the general development of which began in 2016, is designed to close the implementation gap for hybrid green- grey strategies targetingwater security by: a) linking adaptive planning to investment planning by operationalising the concept of dynamic adaptive policy pathways and contextualising them in national public investment systems; and b) improving the investability and bankability of nature- based DRR projects by applying the UK Treasury Business Case methodology in combination with our IWRM planning methodology (Framework of Analysis). The main research questions addressed by the case studies are: - How to enable private sector parti­ cipation in collective watershed investments and ecosystems? - Which implementation arrangements – funding, governance mode, financing and procurement – are best to handle the specificities of NBS? And to align the incentives experienced by key implementation actors (public, private and communities, for example)? - What are the key technical and financial characteristics of NBS that need to be considered in design and implementation arrangements? These research questions have been worked out concretely by documenting pioneering cases worldwide and coaching the development of implementation strategies in four cases in the NAIAD H2020 project: Spain, Romania, Rotterdam and France. Contact: Dr. Ir. Monica A. Altamirano, Monica.Altamirano@deltares.nl, t +31 (0)6 1222 8685 Dr. Laura Basco Carrera, Laura.BascoCarrera@deltares.nl t +31 (0)6 3063 1097 Further reading : Denjean et al. (2017). Natural Assurance Scheme: A level playing field framework for Green-Grey infrastructure development. Environmental research, 159, 24-38. http://naiad2020.eu/ Ecosystems represent major potential for DRR. To enable a shift towards Natural Assurance Systems, we developed a metho- dology - Financing Framework for Water Security - to support the design of implementation and financing arrangements for NBS. The result is a handbook for the implementation of ecosystem- based DRR and a proven metho- dology applied to four demon- stration projects in the H2020 project NAIAD. DemoSites / nine demonstration cases for NAIAD