Policy Perspectives: Nature-based solutions for adapting to water-related climate risks - OECD Environment Policy Paper No. 21

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1 Introduction

Countries are facing a pressing, complex and interlinked set of environmental crises. While significant government resources and capacities need to focus on managing the social and economic consequences brought on by efforts to manage the COVID-19 pandemic crisis, the global environmental challenges of climate change and biodiversity loss remain urgent. Recent major international reports (e.g. IPCC (2018, 2019), IPBES (2019)) have highlighted the extent and severity of the climate impacts the world faces even if stringent mitigation action is implemented, with the possibility of far worse outcomes under higher emissions trajectories. At the same time, global biodiversity is rapidly declining and ecosystem health deteriorating due to human activities. This policy paper focuses on the role of nature-based solutions (NbS) in limiting and managing the current and future impacts of climate change, focusing on water-related risks. It will highlight how NbS may also support a greening of the recovery from the COVID-19 crisis.

The international community is increasingly exploring the use of NbS to maximise the synergies between ecosystem health and human wellbeing, while also offering attractive economic benefits. Both research and cases of early adoption have presented evidence of the value and multiple benefits of NbS. Protecting coastal marshes can provide multiple ecosystem services including flood abatement, carbon and nutrient sequestration, water quality maintenance and habitat for fish, shellfish, wildlife and flora (Narayan et al., 2016[1]). Restoring forests in upper catchments can help to protect communities downstream from flooding, while simultaneously increasing carbon sequestration and protecting biodiversity (Filoso et al., 2017[2]). These multiple benefits can provide economic dividends. In Korea, for example, investing in afforestation in the 1970s both created immediate jobs and yielded an estimated net present value of over USD 50 billion in 2010, due to a significant reduction of disaster risk and increase in carbon sequestration (Lee et al., 2018[3]).

Despite growing international interest, recent investigations into the use of NbS have found that their uptake remains limited (Kapos et al., 2019[4]; Browder et al., 2019[5]). While many examples of individual NbS projects exist across countries, they are usually disconnected pilot projects and applied at a relatively small scale (Trémolet S. et al, 2019[6]). In contrast to grey infrastructure, the use of NbS has not been mainstreamed into the set of solutions and options that are currently considered by governments, local authorities or the private sector in different policy areas.

As the COVID-19 crisis draws our attention to the interconnections between healthy ecosystems and healthy communities, it becomes even more important to understand how NbS can be fostered, replicated and scaled up in cases where they provide a physically effective and cost-efficient alternative or complement to grey infrastructure. Recent studies have identified potential barriers in the enabling environment that can prevent NbS from being considered on equal footing with grey options. This paper and subsequent OECD work on the topic aims to explore these barriers to allow NbS to be more systematically considered in decisions taken by governments, local authorities or the private sector.

To refine the discussion, this OECD policy paper focuses on the use of NbS for addressing water-related climate risks, and specifically examines coastal flooding, riverine flooding, urban flooding and drought. Since the bottlenecks may be similar across other application areas, the policy framework that will be presented herein is meant to inform the broader set of issues for which NbS can be considered. The rest of the paper is organised as follows. Section two provides an introduction to the concept of NbS. Section three focuses on the role of NbS in reducing the water-related exposure to climate risks, and provides an overview of their uptake to date in OECD countries. Section four explores why prevailing decision making frameworks may fail to adequately consider NbS, and section five examines how NbS have been integrated in policy frameworks to date. This analysis then informs section six, which builds a policy evaluation framework intended to structure the cross-country comparative analysis of future case studies.