Spending on green infrastructure hits $25bn

21 December 2016

Almost $25bn was spent on “green infrastructure worldwide in 2015 as the private and public sectors sought solutions to water shortages, according to a report.

Forest Trends’ Ecosystem Marketplace, Alliances for Green Infrastructure: State of Watershed Investment 2016 report found programmes in 62 countries made investments which rely on ecosystems to ensure clean, reliable water supplies.

In the face of growing water scarcity, increasing floods and droughts and climate change, the report tracks the growing popularity of holistic water management.

This approach aims to combine traditional engineered “gray” infrastructure solutions with green infrastructure, which includes forests, wetlands, grasslands and mangroves.

“This natural infrastructure can reduce flood risk, protect from storm damage and help deliver drinking water, often at a fraction of the cost of strategies that focus exclusively on gray infrastructure,” said the report.

Examples of such investments might include a beverage company paying into a local water fund or paying local farmers to reduce pesticide use, saving money on water treatment processes.

The report said $24.7bn was invested in 2015 to protect, rehabilitate or create new habitat on 486m hectares of land – an area 1.5 times the size of India.

Direct subsidy payments to public and private landholders accounted for all but $1bn of this total, as governments sought to encourage sustainable agriculture and other practices, and around $10bn was paid to reward farmers for good stewardship of land.

Genevieve Bennett, senior associate at Forest Trends’ Ecosystem Marketplace. “We’re seeing the traditional agricultural subsidy model retrofitted for a green economy – to focus on landscape health and not just agricultural productivity.”

Some $675m was spent by water users themselves – cities, companies and water utilities acting on behalf of customers – to safeguard water supplies.

Water utilities surveyed by Ecosystem Marketplace cited concerns about operational and maintenance costs as their core motivations for watershed investment. The private sector cited reputational and supply chain risks as the prime motivation for action.

This was particularly true of the food and beverage sector, which spent about $9m in 2015.

The report also highlighted the growing popularity of corporate water stewardship commitments made by large brands such as Coca-Cola, SAB Miller and Ikea.

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