The potential of nature-based flood defences to leverage public investment in coastal adaptation: Cases from the Netherlands, Indonesia and Georgia

Abstract

Nature-based flood defences (NBFD) are receiving considerable attention in the coastal adaptation field. Advocates of NBFD point to their cost-effectiveness, flexibility and the range of co-benefits they produce beside flood risk reduction. However, NBFD are not yet common practice. One reason for this may be found in financial barriers. To date, there has been little attention for financial aspects of NBFD, as the literature has focused on design, effectiveness and socio-economic impact of such projects. We address this gap by analysing the financial attractiveness of real-world NBFD from the perspective of the public actor. We address the following research questions: through which mechanisms can public investments in NBFD projects be leveraged? and ii) what are the enabling conditions for these mechanisms? We find two types of revenue generating mechanisms: value capture, in which the public actor generates revenues from private beneficiaries through taxes; and co-investment, in which the project attracts in-kind or cash contributions from other actors. We illustrate the potential of these leveraging mechanisms in four case studies and find that NBFD can generate significant tax revenues in locations with high demand for certain co-benefits, whereas project size, type, timing and beneficiaries of co-benefits determine the potential for co-investment.