Individually, a drop. Together, a river: Driving watershed investments via collective action
By Justus Raepple, Director at the Nature for Water Facility with The Nature Conservancy (TNC)
Spending on nature amounts to a rounding error in the $800bn invested annually in the water sector. But interest is growing among actors – in particular utilities, corporates, and development banks – to leverage the benefits of nature to improve water security under the moniker of “Nature-based Solutions” (NbS). This drive is motivated in part by the dawning understanding that our landscapes are valuable infrastructure for providing clean water but are increasingly vulnerable to climate impacts and changing land use practices. The net result is more active interest by water users in proactively managing these landscapes to promote long-term and sustainable watershed health for the benefit of water security, community development, biodiversity, and resiliency.
Since the year 2000, The Nature Conservancy has been involved in the establishment of over 40 water funds across the Americas, Africa, Europe and Asia. These governance mechanisms are collective action platforms for multiple parties to invest in upstream NbS like wetlands restoration, forest protection, and riparian management to ensure water security and other related benefits. A key insight from the water funds model is that by stacking different parties, an investment that doesn’t make sense at the individual level can make a lot of sense when considered in the context of the broader set of members. Since the same watershed may affect a bottling operation, hydropower company, utility, and agricultural district, an appropriately defined portfolio of upstream NbS investments can serve to unlock collective interest and investment.
Crowding-in multiple partners to invest in NbS has many advantages, but purposeful and inclusive stakeholder engagement is an art. To help you effectively galvanize support for your own programs, here are three tips from our on-the-ground leaders based on 20+ years of building watershed investment programs.
Tip #1: Understand who has something at stake and what it’s worth to them. The initial step for most water fund efforts is stakeholder mapping, deep listening, and understanding why different parties might be motivated to care about upstream watershed health. A relevant first port of call is evaluating the water security concerns faced by these actors whether in the form of flood risk, water quality, or water availability. Your team should start to form a hypothesis of how specific NbS actions might ameliorate these concerns, and which challenges may be better addressed by a green-grey approach. We often find it effective to develop a business case that can articulate the specific benefits of a potential NbS portfolio using language and indicators that resonate with key stakeholders. For example, the Greater Cape Town Water Fund completed a return-on-investment (ROI) analysis evaluating the water quantity benefits of invasive alien plant removal, and concluded that such a solution costed just one-tenth as much as traditional options like desalination. This served as a major determinant for actors, including the City of Cape Town, to start making funding commitments.
Tip #2: Develop a concise & compelling vision to rally around. Having a clear idea of what success looks like, alongside the level of effort and associated costs, serves as a rallying point for stakeholder groups. For example, the Rio Grande Water Fund has over 100 signatories that came together in 2014 to set a vision based on science: the need for 30,000 acres per year of forest management treatments. Their aim was to create a forest management program that would reduce the risk of catastrophic wildfires, and the inevitable aftermath that clogs drinking water sources with sediment and ash. Their goal was 30,000 acres of forest thinning per year, but in 2014 they were only thinning ~3,000 acres. The clear, science-based messaging of this goal is one of the major reasons why the ten-fold increase in total treatments became a reality. Setting a line in the sand that articulates what success looks like can act as a motivating ‘north star’ for stakeholders.
Tip #3: Celebrate in-kind contributions. Watersheds are busy places, and multiple actors are usually already present and doing good work that can be combined in partnership via collective action. For example, the Upper Tana-Nairobi Water Fund Trust works with nearly 50,000 farmers to apply soil and water conservation practices, resulting in more than 70,000 hectares of land in the watershed under sustainable management. This is made possible by a strong alliance with existing county watershed managers who have pre-existing relationships with local farmers and serve as an extension network for the water fund’s activities. Without this in-kind partnership, it would have taken years (if not decades!) for the water fund to reach this level of at-scale implementation.
The challenges of today require us to increase the pace and scale with which we are investing in proven solutions. The programs that rapidly scale are those that have taken the time to establish strong relationships and an inclusive governance framework. The evidence on the ground is clear: if we want long-lasting, tangible results, we should move at the speed of trust.
For additional guidance on building out NbS investment programs to benefit watershed health, check out our new Financing Nature for Water Security: How-to Guide to Develop Watershed Investment Programs, which includes a dedicated “Deep Dive” on sustainable funding arrangements. Also, if you are part of a local initiative that is seeking to build out a watershed investment program, consider getting in touch with the Nature for Water Facility and applying for technical assistance via our semi-annual Call for Proposals.
This blog post is part of the learning journey on Innovative Financing for Water Security through an IWRM approach. The learning journey takes place on the SDG 6 IWRM Community of Practice and will last until October 2022. Interested IWRM practitioners can participate in the learning journey by creating a profile on the GWP Toolbox and then joining the SDG 6 IWRM Community of Practice