The economics of nature-based solutions: cost- benefit analysis, market development and funding

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Open Call Reference: HORIZON-CL6-2021-BIODIV-01-05


A successful proposal will support the development of policies, business models and market conditions to scale up and speed up the implementation of nature-based solutions (NBS)[1]. It will contribute to the wider deployment of NBS and to fully reaping their economic, employment, social and environmental benefits in order to build a competitive sustainability in Europe and to tackle climate change. NBS contribute to the EU biodiversity strategy for 2030 and other Green Deal priorities, by supporting biodiversity and vital ecosystem services: climate change mitigation and enhancement of carbon sinks, biomass provision, access to fresh water, clean soil, healthy diets and lifestyles and sustainable food systems. NBS deployment will also create green jobs and build resilience to climate change and natural disasters.


Developing markets for NBS has proved a continuing challenge. NBS investments are many and varied, with their benefits and costs differing by project type and context. They produce a range of benefits, many of which are public goods with limited revenue streams that may accrue to different stakeholder groups. Detailed understanding of these benefits is lacking. The same is true for potential economic benefits resulting from avoidance or reduction of costs due to NBS intervention. In addition, the variety of NBS and their context-specific nature across urban, periurban and rural realms, makes it difficult to predict reliably their commercial prospects. These features make financing of NBS projects challenging and investment from the private sector particularly so. As a result, funding of NBS has typically focused on a narrow range of public sources. Addressing knowledge gaps about the economic and financial performance of NBS investments, in combination with trialling the development of business cases and models for NBS implementation is particularly urgent in the current context where NBS need to be exponentially scaled up to meet the policy priorities of the European Green Deal. Despite growing interest in NBS, upscaling NBS investment would require better understanding of different return on investment (ROI) models while accounting for indirect revenue streams associated with NBS (e.g. lower insurance costs for local government from investment in flood defences).


– Better understanding of the economic and financial performance of NBS, contributing to a greater promotion of investments in NBS and to an acceleration of market uptake.

– NBS markets are further developed and better structured.

– Actors involved in NBS markets are better equipped to conduct cost-benefit analysis and monetisation of NBS, and to address their funding needs, for greater implementation of NBS, including ecosystem-based disaster risk reduction approaches.

– NBS business cases are strengthened, contributing to greater adoption of NBS and awareness of their benefits.

– Regional and Europe-wide advisory services are equipped with better tools and create multi-stakeholder networks to more effectively support NBS project development and investment vehicles.

– Informing Mission Adaptation to Climate Change, the EU Adaptation Strategy and the EU Taxonomy on Sustainable Finance.

– Assess potential skill gaps and devise trainings to tackle this skill shortage

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