Characterizing nature-based solutions from a business model and financing perspective.

Abstract

Nature-based solutions can help overcome urban sustainability challenges by providing services, creating benefits and holding value for different urban actors. However, the development of nature-based solutions is hampered by a number of barriers that relate to the value proposition, value delivery and value capture of NBS business models and sources of (public/private) finance to tap into. Value created from nature-based solutions which provide marketable products that can be privately appropriated, such as urban agriculture, can be more easily privately finance and delivered through business models than NBS such as urban forests which deliver nature-based value with mostly public good characteristics (e.g. improved air quality, CO2 abatement). We find that the level of finance and business models needed for different types of NBS varies. Policy makers can intervene at various administrative levels to encourage finance and business models for NBS innovations, for example through changing accounting frameworks, adjusting procurement rules and providing risk guarantees. The main challenge surrounding the scale up of urban NBS will be matching commitment from heterogeneous urban constituents to different types of nature-based solutions through appropriate finance and business models.