Financing Natural Infrastructure For Coastal Flood Damage Reduction

This paper explores financial tools for investing in natural infrastructure to reduce current and future risks from flooding. The key conclusions are: 1. There is a large and growing pool of funding for natural infrastructure, but the availability is geographically uneven and providing sufficient resources will require significant actions by industry, government, scientists, and communities ; 2. There is no single appropriate financing mechanism for natural infrastructure. Financing should reflect the distribution of public or private benefits of flood protection through the payment mechanism as determined by specific local conditions. 3. The largest opportunities for funding are in the redirection of post-disaster recovery funds to pre-disaster investments in risk reduction. 4. The largest barriers for securing adequate resources are: identifying locations where natural infrastructure can play a significant role in flood risk reduction; developing the experience and standards to overcome institutional biases that favor gray infrastructure; and developing institutional arrangements capable of matching available funding with the needs of individual situations ; The funding strategy to be used for any specific project will depend primarily on the geographic, economic, and institutional circumstances in each location. But it is possible to create a general framework to catalogue the different approaches to financing, from which locally-determined funding strategies can be formed. This paper proposes such a framework, then outlines and examines the options currently available under the framework, and concludes with an assessment of how funding may expand in the future.