Long-term financing of nature-based solutions for urban water treatment: Opportunities of multiple values to develop public private financing models for wider adoption and the long term

Supervisors: Günter LANGERGRABER and Petra RIEFLER

PROJECT ASSIGNED TO: Maria WIRTH

Amid global challenges of climate change and population growth, cities are struggling with urban heat islands, water scarcity, flooding, and loss of ecosystem services to provide clean air, water and soil. Similarly, the increase of water and nutrient demand for food production requires new approaches to water and wastewater management.[1] With 56% of global population living in urban areas[2], cities play a key role in closing water and nutrient cycles, as they import large volumes of water and food into the urban system, and consequently produce equally large volumes of wastewater, biodegradable solid waste, and runoff water which could be captured, treated and water and nutrients made available again for food production.

Nature-based water treatment solutions can complement existing grey infrastructure for water, stormwater, and wastewater management. They can improve water quality, reduce flood risks, recover nutrient-rich, safe water for irrigation of agricultural fields and green spaces, carbon and nutrient-rich soil amendment, and thus contribute to creating a circular water and nutrient economy[3].

While NBS for wastewater treatment have been applied in rural areas for decades, and NBS for stormwater retention have been applied in cities in some cases, there is large potential to intensify their installation as part of urban infrastructure to help solve existing pressing and expensive challenges. In the urban water sector, they are not among mainstream technological choices due to issues such as path dependency, regulatory barriers and decisions affecting and depending on multiple urban stakeholders (e.g. several municipal departments, property owners) [4]. Financing NBS is seen as one major challenge to enable mainstreaming[4]. A better understanding of potentials for sustainable food systems, costs and co-benefits, (financial) returns of investment[5] of NBS by type, relevant institutional and stakeholders (perceptions, abilities, needs) as well as existing (co)financing options and O&M requirements and practices would help to develop financing and O&M models that are feasible and attractive to the stakeholders that are required to realize new NBS in cities.

The present PhD project is conducted within the frame of the MULTISOURCE project (H2020 GA n° 101003527). MULTISOURCE provides the knowledge, tools and business models that will enable stakeholders to conduct fit-to-purpose, large-scale planning in their city. MULTISOURCE monitors seven distinct NBS pilots across Europe, and works with four municipal and metropolitan public authorities to develop a set of tools, increased evidence, as well as business models. The types of NBS which are subject of the MULTISOURCE project include (i) treatment wetlands for raw municipal wastewater and pretreated wastewater, (ii) treatment wetlands for combined sewer overflow (CSO) treatment, (iii) green walls for wastewater or greywater treatment, (iv) raingarden to capture, treat and store road runoff water, (v) green roofs to capture, treat and store rainwater.

Expected research contribution

While a lot of research has been conducted on co-benefits, business models and governance for the general concept of NBS, existing knowledge is only in part transferable to the subset of NBS for water treatment (NBSWT) and their embedment in NBS systems for circular urban water and nutrient management. Remaining challenges include a lack of financing schemes for long-term management and lack of business models to capture the multiple values of NBSWT.

Hypothesis

The multiple capabilities and co-benefits of NBSWT provide opportunities for public-private partnerships and sources of long-term financing within and beyond the water sector.

Research objectives

The present PhD project aims to:

  • Develop a typology of existing business models for NBSWT and concepts proposed by existing research
  • Develop a typology of key financers and implementing partners along NBSWT project lifecycles, according to their goals and priorities, sphere of influence and roles, and needs
  • Co-develop long-term business models for four specific co-investment cases consisting of innovative partnerships and stakeholder roles
  • Compare the four co-investment cases and recommendations for public and private business model innovation and public sector investment planning

Methods include a systematic literature review, qualitative interviews and online surveys among relevant stakeholders, practitioners and scientific experts, stakeholder co-creation workshops, and a comparative case study.

References

[1] UN-Water, ‘Water Quality and Wastewater’, UN-Water (blog), n.a., www.unwater.org/water-facts/quality-and-wastewater/.

[2] The World Bank Group, ‘Urban Population (% of Total Population)’, Data, 2022, data.worldbank.org/indicator/SP.URB.TOTL.IN.ZS.

[3] WWAP, ‘The United Nations World Water Development Report 2018: Nature-Based Solutions for Water’ (Paris: United Nations World Water Assessment Programme, UNESCO, 2018).

[4] Beatriz Mayor et al., ‘State of the Art and Latest Advances in Exploring Business Models for Nature-Based Solutions’, Sustainability 13, no. 13 (January 2021): 7413, doi.org/10.3390/su13137413.

[5] Neil Coles et al., Analysis of the Business Case for the Application of the Nature Based Solutions, 2019.