Economic Assessment of Nature-Based Solutions for Water-Related Risks

Evidence are dearly needed to understand under which conditions it is relevant for decisions makers to invest in NBS for water-related risk. This chapter presents the methodological framework developed for the economic assessment of NBS for water-related risks and its application to seven case studies. We particularly develop methods for the evaluation of implementation and opportunity costs, the assessment of the reduction of damage costs, and the monetary value of co-benefits. The study confirms that the cost of implementation and maintenance of NBS strategies is lower than the cost of grey solutions for the same level of water risk management, emphasizing the better cost-effectiveness of these solutions. Benefits in terms of avoided damages are however generally not sufficient to cover investment and maintenance costs. Co-benefits represent the largest share of the value generated by NBS strategies. The overall cost-benefit analysis implemented in four cases, is positive in three case studies and negative in one. This confirms the importance to carry out thorough economic assessments for the elaboration of Natural Assurance Schemes.