The Conservation Finance Practitioner Roundtable gathered for its third time this year for two days in Washington, DC on Oct. 13-14. The event focused on four topics: the role of government in the creation of well-conceived policies and incentives, the need to increase collaboration between the private and public sectors, the conditions that are necessary to form and scale up conservation markets, and the current state of the soil carbon market.
District of Columbia Water and Sewer Authority (DC Water) has created an innovative municipal bond that covers the downside risk of using green infrastructure to control stormwater runoff. Compared with conventional gray infrastructure, green options have a shorter performance record and are more difficult to model. However, they are often cheaper and offer visible community benefits.
The San Francisco Public Utilities Commission issued the world’s first bond certified to the Water Climate Bond Standard last May. Market demand for third-party certified green bonds seems to be rising – and now, municipalities have a model. The $240-million bond will fund various wastewater and stormwater management projects in the commission’s Sewer System Improvement Program.
Farmers need to pool their resources to collaboratively strengthen water quality in California’s Lower Salinas Valley. A team received a $1,300,695 Conservation Innovation Grant (CIG) for this purpose from the United States Department of Agriculture (USDA) this fall. This project can also improve habitat for birds and marine species.
The current conservation finance gap is estimated to be $200-300 billion per year. As public and philanthropic investment in conservation are in decline, private investment has the potential to bridge it. That was the key message conveyed by the Coalition for Private Investment in Conservation launched at the International Union for Conservation of Nature 2016 World Conservation Congress on Sept. 2, in Honolulu, Hawaii.
This year’s World Water Week, which took place in Stockholm, Sweden from Aug. 28 through Sept. 2, focused on water as the central engine to set the planet on the path of sustainable growth and development.
The new Natural Resource Investment Center at the United States Department of the Interior is making strides toward using market-based approaches and innovative public-private partnerships to tackle natural resource and conservation issues. For years, the nation has been slowly coming to terms with aging water infrastructure, dealing with water shortages in the West, and attempting to revamp species and landscape conservation efforts.
Environmental NGOs and banks are both increasingly interested in conservation as a business opportunity. However, in the past, they have sometimes had an adversarial relationship. Their approaches to financing have also differed. In this interview, John Tobin-de la Puente, former managing director and global head of sustainability at Credit Suisse, said that partnerships between banks and NGOs are evolving toward mutual exploration of business opportunities. However, a substantial rift remains between these two types of organizations. The divide is political, pragmatic, and programmatic. To reach large-scale solutions, Tobin said, NGOs must work with profit-motivated businesspeople.
More and more foundations are turning to program-related investments (PRIs) to meet their goals. While each foundation does it differently, the successful ones are looking closely at their strategies for staffing, sources of PRI funding, ways to identify investable projects, and options for locating co-investors. Rather than starting from scratch when making these decisions, foundations should look to successful case studies and industry organizations to help ease their own transition to PRIs. These are some of the key findings from a July 12 report: “How Foundations Can Use Program-Related Investments to Address Water Challenges,” by Yale School of Forestry and Environmental Studies graduate students Allison Khoe and Susannah Harris.
In this interview, Todd Gartner, senior associate and natural infrastructure for water manager at World Resources Institute, provided a high-level perspective on how green bonds can support natural infrastructure for water security.