▪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 flows 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 cobenefits—needs to be clearly communicated.

The 2019 flagship report Adapt Now: A Global Call for Leadership on Climate Resilience by the Global Commission on Adaptation (the Commission) identified access to finance as one of three key barriers that impede the scaling up of NbSA in many countries. NbSA encompasses several different types of activities, investments, and approaches that seek to protect and restore nature and ecosystems for the services they provide to human society.

Although various funding sources may exist, an individual country’s ability to access them depends on a range of factors, including readiness and capacity, knowledge, and foresight to plan NbSA investments and the skills to finance such investments. For many developing countries, these efforts may be further complicated due to overall economic challenges and those now resulting from the COVID-19 pandemic.

Meanwhile, interest in NbSA investment is changing quickly, with new actors, approaches, and investors seeking opportunities to invest in newly emerging NbSA in recent years. NbSA investments will be fundamentally important in helping many countries address climate change. In almost all circumstances, public capital will be highly valuable. Climate finance and official development assistance (ODA) will be important to help developing countries scale up such investments, particularly where national public budgets may be constrained.

Furthermore, because of the range of development and other benefits that NbSA can bring, integrating such approaches into post-COVID economic recovery planning can maximize the effectiveness of international and domestic public funding while delivering long-term resilience.

Demand exists. Seddon et al. (2019) showed that more than 60 percent of countries recognize the need to preserve ecosystems and have included NbS into their first nationally determined contributions (NDCs). Likewise, a similarly high number of countries acknowledge that protecting ecosystems and enhancing biodiversity is a key goal of their adaptation planning efforts.

This paper provides the first assessment of the landscape of public international funding (climate finance and ODA) for NbSA and seeks to help donor and developing countries better understand the current state of funding flowing for NbSA. The findings in this paper are based on an assessment of funding flows as well as interviews with key stakeholders, such as donors, climate finance funds, multilateral development banks, and countries.