New Report Outlines How to Unlock Additional Funding Streams for Restoration
For the nearly 40 percent of Americans who live near the coast, Hurricanes Harvey, Irma and Maria provide vivid reminders that living there comes with risks. These events also demonstrate that we need to rebuild stronger and smarter, by incorporating both gray and green infrastructure into coastal resiliency and protection plans. Strong community support – which stems from involvement in need identification and planning – is crucial for moving communities toward resilience
So is funding. Houston’s chief resilience officer, Stephen Costello, recently said the city will have to “get creative” to find the money needed to put in place badly needed flood protection upgrades. In nearby Louisiana, officials are facing a similar challenge: How to fully fund the state’s 2017 Coastal Master Plan, a 50-year, $50-billion blueprint for coastal protection and restoration activities.
The Louisiana master plan includes more than 100 projects to rebuild and sustain land and to protect communities and infrastructure. These include traditional gray infrastructure projects like levees as well as natural or “green” infrastructure solutions like coastal wetlands restoration. While Louisiana is set to receive approximately $15 billion in restoration funding from the Deepwater Horizon oil spill settlements and other sources, more funding is needed to fully implement the plan.
Unlocking Private Capital
To help spark conversations about innovative financing opportunities for natural infrastructure, Environmental Defense Fund recently released a new report “Unlocking Private Capital to Finance Sustainable Infrastructure.” The study outlines ways for the public sector – such as the state of Louisiana and City of Houston – to unlock additional funding streams for restoration of natural infrastructure.
The report lays out an investment design framework that looks at both demand and supply to help address funding gaps. On the demand side, it outlines green infrastructure solutions – such as coastal wetlands – that are cost-effective and can be used in conjunction with gray infrastructure to help bolster coastal protection. When looking at supply, it outlines barriers to investment in natural infrastructure and how to overcome them.
The report also outlines four key elements necessary for developing investment-ready projects, including suitable investment models, standardized performance measurement, transparent risk management and effective stakeholder engagement.
Environmental Impact Bonds
One example of using private capital to help finance sustainable infrastructure is the new Louisiana Coastal Wetland Restoration and Resilience Environmental Impact Bond (EIB) being developed by Environmental Defense Fund, Quantified Ventures and Louisiana’s Coastal Protection and Restoration Authority, with support from TNC’s NatureVest program, the conservation investing unit of The Nature Conservancy.
The Environmental Impact Bond feasibility analysis will evaluate using an EIB to finance the implementation of a wetland restoration project from Louisiana’s 2017 Coastal Master Plan. EDF’s overarching goal is to demonstrate the viability of EIBs to spur investment in resiliency. As such, EDF is looking for other areas and situations where EIBs will help communities reduce risks from extreme weather.