Nature-based Solutions in Latin America and the Caribbean: Financing Mechanisms for Regional Replication
Peer Reviewed
Date issued
Oct 2021
Subject
Nature-Based Solution;
Green Bond;
Sustainable Infrastructure;
Green Infrastructure;
Green Finance;
Climate Finance;
Infrastructure Development;
Financial Bond;
Natural Capital;
Sustainable Investment
JEL code
H23 - Externalities • Redistributive Effects • Environmental Taxes and Subsidies;
O13 - Agriculture • Natural Resources • Energy • Environment • Other Primary Products;
O16 - Financial Markets • Saving and Capital Investment • Corporate Finance and Governance;
O19 - International Linkages to Development • Role of International Organizations;
O44 - Environment and Growth;
Q54 - Climate • Natural Disasters and Their Management • Global Warming;
Q56 - Environment and Development • Environment and Trade • Sustainability • Environmental Accounts and Accounting • Environmental Equity • Population Growth;
Q57 - Ecological Economics: Ecosystem Services • Biodiversity Conservation • Bioeconomics • Industrial Ecology;
R11 - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
Category
Monographs
Innovative financing models are emerging globally to advance nature-based solutions (NBS) that can cost-effectively enhance infrastructure performance, meet Sustainable Development Goals, and mitigate the negative impacts of climate change. Despite the potential for NBS to generate attractive returns and provide significant cost-savings, these financing models remain underutilized. Consequently, NBS are not achieving their full potential and a tranche of pent up green capital is sidelined. This report highlights five proven NBS financing strategies that leverage private finance: green bonds, blended market-rate and concessional loans, land-based financing strategies, insurance policies, and endowments. This report also outlines current barriers to the successful scaling of these financing strategies in Latin America and the Caribbean and identifies the approaches and enabling conditions needed to overcome them.
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