“Hurricanes Harvey and Irma just wiped out an estimated $200 billion of economic value and caused widespread devastation – an alarming wake-up call for governments to invest in sustainable infrastructure now to help protect communities from the impacts of future storms,” said Namrita Kapur, Managing Director of EDF+Business and head of EDF’s Sustainable Finance program. “This new report highlights the economic benefits of investing in sustainable infrastructure and gives governments a how-to guide for getting started.”
After decades of neglect and lack of investment, the United States’ infrastructure faces critical challenges. The American Society of Civil Engineers estimates that $3.3 trillion will be needed by 2025 to upgrade or repair existing infrastructure and avoid negative economic impacts. There is, however, a funding gap of $1.4 trillion to meet this need. By 2040, this funding gap will be over $5 trillion.
The report, produced by Meister Consultants Group, Inc. for EDF, emphasizes the importance of investing in sustainable infrastructure, which is built and managed to help meet economic, environmental and social goals. Furthermore, it highlights the benefits of incorporating natural infrastructure approaches in coordination with more traditional structures or systems such as seawalls or levees. Natural or green infrastructure approaches can incorporate elements such as sand dunes, wetlands, salt marshes, or permeable pavements that can help regulate floods, control stormwater runoff, increase coastal resilience, and reduce erosion.
The Investment Design Framework draws from global best practices and several emerging and innovative methods to funnel financial resources to environmentally beneficial projects. These methods include green bonds, pay for success models used in environmental impact bonds, and unique forms of public-private partnerships focused on sustainability outcomes. The report highlights the potential of these methods through case studies:
- The DC Water and Sewer Authority (DC Water) is utilizing the nation’s first-ever Environmental Impact Bond;
- The New York Green Bank is distributing risk between government actors and private investors to accelerate clean energy;
- Prince George’s County is using a stormwater fee to support community-based partnerships, focusing on environmental and workforce development outcomes; and
- The Louisiana Coastal Master Plan is engaging technical experts and community stakeholders to form the right team in infrastructure development.
The framework also lays out key elements that foster successful collaboration with private investors, such as standardizing performance outcomes and metrics across technologies and within sub-sectors in order to scale the market.
What stakeholders are saying about the report:
“Fixing our infrastructure problems has many challenges and opportunities that require us to look at the problem differently than we have in the past. EDF’s new framework is a very useful tool for states and local governments to plan, fund and finance sustainable solutions,” said John Foote, Lecturer of Science, Technology and Infrastructure Policy at Cornell University’s Institute for Public Affairs.
“This report offers practical suggestions for unlocking private sources of capital to increase the sustainability and resilience of our country’s infrastructure and leverage critical – but scarce – public dollars,” said Alfred Griffin, President of NY Green Bank.
“EDF’s report offers a timely educational resource and call to action for cities and states to mobilize private finance for sustainable infrastructure projects. Through CDP’s Matchmaker effort to link more than 1000+ city projects reported to CDP to investors, we enable cities to better showcase infrastructure projects and find new ways to fund investment and ultimately deliver on their climate commitments. The EDF report provides guidance to public sector leaders looking for innovative ways to meet their sustainability goals,” said Katie Walsh, Senior Manager of CDP Cities North America.
Environmental Defense Fund (EDF), a leading international nonprofit organization, creates transformational solutions to the most serious environmental problems. EDF links science, economics, law and innovative private-sector partnerships.
Amy Morse, 202-572-3395, [email protected]
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SOURCE Environmental Defense Fund (EDF)
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