Overall, the amount of public international funding flowing to nature-based solutions (NbS) for adaptation is still relatively small, accounting for only US$3.8–8.7 billion, or approximately 0.6–1.4 percent of total climate finance flows1 and 1.5–3.4 percent of public climate finance flows, in 2018.
Funding for NbS for adaptation (NbSA) in 2018 was driven by a handful of major bilateral donors, including Germany, the United Kingdom, Japan, and Sweden. The European Union, Asian Development Bank, the Green Climate Fund, and the International Fund for Agricultural Development were among the largest multilateral donors and channels of funding. Countries in Sub-Saharan Africa and South and Central Asia received approximately 50 percent of total public NbSA funding.
Funding in 2018 came primarily through grants. Though grants may play an important role, utilizing a broader range of instruments for NbSA may increase the opportunities to crowd in and catalyze private capital with public concessional finance.
The absence of clear definitions, guidelines, and metrics and methodologies to track, quantify, and value NbSA benefits may significantly inhibit the development and financing of a robust pipeline of NbSA-related investments.
Some NbSA projects do not provide reliable revenue streams, making it important to find other ways to fund long-term operational costs. To scale up and mobilize additional sources of funding, the full economic and financial case for NbSA—including co-benefits—needs to be clearly communicated.