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Based Solutions to Reduce Risks of Flooding and Drought

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Based Solutions to Reduce Risks of Flooding and Drought FINANCIAL INSTRUMENTS FOR NATURE- BASED SOLUTIONS TO REDUCE RISKS OF FLOODING AND DROUGHT 1 PREFACE Nature-based solutions provide an opportunity to better integrate agendas for climate action, flood and drought risk-reduction and biodiversity conservation into a more coherent and holistic approach. This report reflects the knowledge, experiences and lessons learned within the project and its dialogue, workshops and studies. The report builds on previous results pointing to the need for a business model where downstream landowners pay or in other ways compensate upstream landowners to maximize the water retention potential through nature- based solutions, which was presented in a pre-study funded by Climate KIC/EIT. That study was carried out in Västra Götaland Region (Sweden) in spring 2018 by Region Västra Götaland/Västarvet and COWI. This project is also inspired by the Climate-KIC project on Climate Labelling Denmark Technical University with Lund University as a partner, and a recent handbook on nature-based solutions to keep water in the landscape developed by the County Administrative Board Region Västra Götaland and the Swedish Forest Agency. Disclaimer The content of this paper is based on the results of an applied project carried out and reported by the project partners. As such, the results do not necessarily reflect the opinion of EIT Climate KIC. Editors Anna Ternell and Peter Stigson, PE Teknik & Arkitektur Authors Anna Ternell, Peter Stigson and Bodil Elmqvist, PE Teknik & Arkitektur Johanna Alkan Ohlson and Helena Hansson, Lund University Anders M. Nilsson, Västra Götalandsregionen/Västarvet Photos Anders M. Nilsson, Västra Götalandsregionen/Västarvet Malmö, Sweden 18 December 2019 Project number: 103409 2 Table of Contents Summary ............................................................................................................................................................... 6 1. Background .................................................................................................................................................... 7 1.1. Objective and scope of study ................................................................................................................. 7 1.2. Climate benefits of nature-based solutions ............................................................................................ 8 1.3. European outreach .............................................................................................................................. 11 1.4. The financial model ............................................................................................................................. 12 1.5. The study area ..................................................................................................................................... 14 1.6. Stakeholders ....................................................................................................................................... 15 2. Methodology ............................................................................................................................................... 16 3. Conclusions from external workshops ......................................................................................................... 17 4. Societal values ............................................................................................................................................. 20 4.1. Green infrastructure ............................................................................................................................ 20 4.2. Values of nature-based solutions ......................................................................................................... 21 5. Financial instruments ................................................................................................................................... 25 5.1. Introduction ........................................................................................................................................ 25 5.2. A formalised system ............................................................................................................................ 25 5.3. A monetary system .............................................................................................................................. 26 5.4. Stakeholder perspectives ..................................................................................................................... 26 5.4.1. Perceived barriers as market failures ............................................................................................... 26 5.4.2. Perceived values as market opportunities ........................................................................................ 28 5.4.3. Comparing up- and downstream failures and opportunities ............................................................. 29 5.5. Input to further policy analysis............................................................................................................. 29 5.6. Discussion ........................................................................................................................................... 30 6. Legal barriers and possibilities to implement NBS ........................................................................................ 32 6.1. Introduction ........................................................................................................................................ 32 6.2. Method ............................................................................................................................................... 32 6.3. Relevant legal Acts and laws ................................................................................................................ 32 6.3.1 EU Directives ........................................................................................................................................ 32 6.3.2 Swedish Acts and laws.......................................................................................................................... 33 6.4. Theoretical paths for establishing upstream water retention ............................................................... 33 6.4.1. Path 1 Buying land (organizational factors) ...................................................................................... 34 6.4.2. Path 2 Purchase of water retention services (organizational factors) ................................................ 34 6.4.3. Path 3 Development of land use agreement (organizational factors) ................................................ 34 3 6.4.4. Path 4 subsidies for provision of ecosystem services ........................................................................ 35 6.5. Examples of organizational structures for the establishment of NBS..................................................... 35 6.5.1. Creation of wetland for achievement of good water status .............................................................. 35 6.5.2. Ecological compensation and the Balancing principle ....................................................................... 36 6.6. Regulation and NBS implementation in court cases .............................................................................. 36 6.7. Reflection ............................................................................................................................................ 37 7. Case projects, challenges and recommendations ......................................................................................... 39 7.1. Case projects ....................................................................................................................................... 39 7.2. Challenges and possible solutions ........................................................................................................ 41 7.3. Recommendations............................................................................................................................... 42 8. Business model ............................................................................................................................................ 44 8.1. Business model canvas ........................................................................................................................ 44 8.2. Key partners ........................................................................................................................................ 47 8.3. Key activities ....................................................................................................................................... 47 8.4. Key resources ...................................................................................................................................... 47 8.5. Value proposition ................................................................................................................................ 47 8.6. Customer relationships ........................................................................................................................ 47 8.7. Key resources ...................................................................................................................................... 47 8.8. Channels ............................................................................................................................................. 47 8.9. Customer segment .............................................................................................................................
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