Genevieve Bennett, Forest Trends’ Ecosystem Marketplace
March 2014
Who we are
The infrastructure gap
Estimated Global Annual Infrastructure
Investment Needs by 2030
$ billions
Electricity
Transmission and
Distribution
$80
Water Infrastructure
$1,000
Roads
$160
SOURCE: Source: OECD
(2006). "Infrastructure to
2030: Telecom, Land
Transport, Water and
Electricity."
Why natural infrastructure?
Managing our landscapes as natural
infrastructure
which means identifying the services
they provide that we depend on
like pollution filtration or flood control
and protecting those services, or
compensating the people who do.
SOURCE: Charting New Waters: State of Watershed Payments 2012.
Current state of finance
Eco-markets: Global values 2008-2013
$ millions
9000
8000
$ millions
7000
6000
5000
4000
3000
2000
1000
0
2008
2009
2010
205 active projects
77 in development
$8.2 billion transacted in 2011
117 million ha under management that year
2011
2012
2013
Watershed services, global
Forest carbon, global
Wetland and stream banking, US
Biodiversity offsets/banking, global
SOURCE: Ecosystem Marketplace’s ‘State of’ reports series
Investments by region
Value of Watershed Investment Programs, 2011
$ millions
Asia: $7,460
North America:
Oceania:
$361
$149
Europe:
$3
Africa:
$109
Latin America:
$89
SOURCE: Charting New Waters: State of Watershed Payments 2012.
The “classic model”
SOURCE: Charting New Waters: State of Watershed Payments 2012.
Who’s paying?
Share of investments by payer type
Percentage of total transaction values, globally
China
Beneficiary pays: 3%
Public good payer
97%
Not China
Polluter Pays: <1%
SOURCE: Charting New Waters: State of Watershed Payments 2012.
Investments in practice
82% Direct contracts with
governments and NGOs
7% Endowment and static funds for water
6% Direct contracts with water users
2% Water rights banking/acquisitions for instream flow
1% Water quality offsets and trading
>1% Groundwater mitigation banking
>1% Revolving loan funds
>1% Green infrastructure tax credits/incentives
SOURCE: Charting New Waters: State of Watershed Payments 2012.
What about the private sector?
SOURCE: State of Watershed Payments: Executive Summary for Business, 2013, and Gassert et al, Aqueduct Global Maps 2.0, 2013.
Landscape-scale risks overlooked?
67% of businesses managing water risk on-site
4% managing risk in the supply chain
3% managing risk at the watershed level
SOURCE: CDP Global Water Report 2013.
Why business is investing
Drivers of business investments in 2011
# of projects reporting driver
SOURCE: State of Watershed Payments: Executive Summary for Business, 2013.
Case study: Lake Naivasha, Kenya
Sediment
Fertilizer
Reduced flows in dry season
Surges in wet season
New geothermal
power plant
Hotels
Flower-growing businesses
High-value crop
seeds
Technical assistance
Vouchers for
agricultural inputs
(worth $17/per
household/year)
Ranchers
LAKE NAIVASHA WATER
RESOURCE USERS
ASSOCIATION
Harvest revenues 30x higher than value of
original voucher payment
SOURCE: State of Watershed Payments 2012.
Natural infrastructure and the nexus
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Projects funding sustainable
agricultural practices
% of projects
OECD countries
Non-OECD Africa
Non-OECD Asia
Non-OECD Latin America
Non-agriculture
Natural infrastructure and the nexus
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Projects with funders
in the energy sector
% of projects
OECD countries
OECD countries, proposed
Non-OECD Africa
Non-OECD Africa, proposed
Non-OECD Asia
Non-OECD Asia, proposed
Non-OECD Latin America
Non-energy
How do we facilitate investment?
X FACTORS:
Multilateral finance for water and energy infrastructure
Post-2015 SDGs on water and the nexus
Guidance and incentives for business
Natural capital accounting
12
10
$billions
8
BAU
6
4
2
0
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Thank you
Genevieve Bennett
Forest Trends’ Ecosystem Marketplace
[email protected]
Models for business investment
SOURCE: State of Watershed Payments: Executive Summary for Business, 2013.
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