Paying for nature-based solutions: A review of funding and financing mechanisms for ecosystem services and their impacts on social equity

Funding and financing challenges remain a persistent barrier to implementing nature-based solutions that enhance ecosystem services, facilitate adaptation to climate change, and combat environmental stressors in cities. In the absence of adequate public financial resources, private funds are often expected to fill the gap. But market-driven, nature-based solutions can contribute to an inequitable distribution of urban ecosystem services by focusing on net benefits provided by nature. To help foster sustainable development and ensure that nature-based solutions reach diverse and historically marginalized populations and communities, this scoping review explores the ecosystem services provided by nature-based solutions and the payment mechanisms that produce and maintain them, focusing on literature on the United States. Findings suggest that the net benefits provided by nature-based solutions and the available payment mechanisms vary based on the solution utilized (e.g., urban trees, parks, community gardens). Further, the distribution of benefits from nature-based solutions is influenced by local historical, cultural, political, economic, and environmental contexts, the voices included in decision-making, and the payment mechanisms used. Inspired by social equity principles, we present a framework for ecosystem service provision that is sensitive to market-driven funding, financing, and partnerships. Practitioners can use this framework to assess whether payment schemes work in tandem with place (the local context) and process (governance and planning approaches) to ameliorate or exacerbate disparities in nature-based solutions and the benefits they provide to people.

Automated summary

Funding and financing challenges hinder the implementation of nature-based solutions in cities, resulting in an inequitable distribution of urban ecosystem services. This scoping review focuses on the United States and explores the ecosystem services provided by nature-based solutions and the payment mechanisms that produce and maintain them. The findings highlight the variability of net benefits and payment mechanisms across different nature-based solutions, influenced by local contexts and decision-making processes. A framework is presented to ensure social equity in the provision of ecosystem services through market-driven funding, financing, and partnerships.