Natural assurance schemes: moving earlier in the risk management cycle with nature based solutions and strategies

In Greek mythology, the Naiads (Naïαδες) are the spirits of small brooks, fountains, wells, springs, and other freshwater bodies. Different to the river gods, the naiads were smaller, more adaptable in different forms. The NAIAD project presented in this article takes inspiration from this freshwater ancient wisdom to look at disasters. Particularly, considering the prevention and reduction part of the disaster risk management cycle by looking at nature, not just as part of the problem but as part of the solution. 

The ancient Greeks thought of the world's waters as all one system, which percolated in from the sea in deep cavernous spaces within the earth, to the sea. This systemic view on risks is very much at the heart of NAIAD. The approach is also focused on this versatility afforded by nature and the interest in understanding the protective role of nature-based solutions (NBS) in buffering risks posed by natural hazards through the development of natural assurance schemes. 

Flood events have huge impacts worldwide. In Europe, numerous examples can be found from the past decade, that cause extensive damages (e.g., cloudburst in Copenhagen, the Elbe floods in 2002, 2013, Danube floods in 2006, Alpes Maritimes floods in 2015, Lez floods in 2014, Seine floods in 2016 and 2018, etc.). Around 90 % of natural hazards are water-related and these are likely to become more frequent and more severe due to climate change. For example, climate change is projected to increase damages up to 50 % by 2050 in France (Moncoulon et al. 2018). The Caisse Centrale de Réassurance (CCR) has estimated that mean annual insured of flood hazards will be up to 38 %, respectively 50 % related to runoff hazard and 34 % to river flooding. 

Climate change is already resulting in rising levels of risk posed by natural disasters and the related costs these create (Lawrynuik 2019). The total reported losses caused by natural disasters over the period 1980-2014 reached approximatively 453 billion euros in Europe, with only 45 % of these economic losses insured (EEA, 2019). Therefore the (re)insurance industry is a critical actor to engage and to understand its current and potential contributions to the assessment of what we have called Natural Assurance Schemes (NAS). The insurance sector has the opportunity to play different roles to engage loss prevention through NBS (Marchal et al. 2019). The use of catastrophe models developed by or for (re)insurance companies are tailored to assess the quantification of the avoided damage provided by preventive measures. It could be performed in addition of co-benefits assessment supported by both research institutions and specialist organisations with knowledge on the role of green infrastructure in delivering resilience dividends.

The main objective of the EU funded NAIAD project (1) is to develop a better conceptual framing and understanding on the insurance and assurance value of nature to help address and prevent damages from natural hazards by bringing nature into the equation not just as a problem but as a solution. NAIAD is a project funded by the European Commission under the program Horizon 2020 running over 3 and a half years (2017-2020) with a budget of 5 million euros. This short article will present the main results from developing this conceptual frame and the operationalisation of the assurance value of ecosystems in disaster risk management, putting a special emphasis on prevention and avoided damages through nature investments. 

The project is coordinated by the Duero River Basin Authority. It has brought together a consortium of 23 partners from 11 European countries including 3 universities and education research institutes, 8 research centres, 4 small/medium size enterprises, 3 public bodies with competences in applied research, 2 public bodies with key competencies in management (the city of Copenhagen and the Duero Basin Authority), 2 NGOs, and the French public reinsurance company CCR. 

The project´s purpose is fully aligned with the upcoming draft EU adaptation strategy “Adapting to climate change” (2) and EU Taxonomy on Sustainable finance including 68 activities on climate change adaptation (3) published in March 2020, contributing to make our societies (and our activities) more climate resilient. NAIAD starts from the assumption that healthy and fully functioning ecosystems can significantly contribute to mitigate extreme water risks and increase the resilience of society in a context of climate change.

To demonstrate the role ecosystems can play in reducing water related risks (e.g. frequent and extreme events) the project has developed what we have termed “Natural Assurance Schemes” (NAS). The project included 9 demonstration sites across Europe spanning different scales: from large scale like the Thames basin (UK), the Lower Danube (Rumania) or the Medina aquifer (Spain), to middle scale like the Lez, Brague (France) and Glinščica (Slovenia) catchments, to city scale of Copenhagen (Denmark), Rotterdam (Netherlands) and Lodz (Poland). These sites face different hazards, the majority focused on floods both pluvial and fluvial (Danube, Glinščica, Lez and Brague), whereas the Medina aquifer in Spain focused on droughts. These different sizes range from the smallest, a neighbourhood in the city of Rotterdam, to the largest one, the lower Danube, with a stretch 250 kilometres long. These cover urban, peri-urban and rural environments, including cities, basins and aquifers as units of analysis. Most importantly, in relation to the design of natural assurance schemes, our demos also cover cases that started from scratch like in Romania or Slovenia, to cases that were fully implemented and where attention was given, instead to developing robust monitoring and evaluation frameworks, to monitor the effectiveness of measures taken for e.g. natural flood management in the Lower Thames.

With this, the project aims to propose new concepts and approaches to enlarge the portfolio of available solutions. Conventional infrastructural measures are expensive - the investment needed in water infrastructure over the next fifteen years has been estimated at 22 trillion dollars, which is more than half of the total expected infrastructure investment demand (USD 41 trillion) (WEF, 2019). 

To achieve the central aim of demonstrating the assurance value of ecosystems, three strategic goals were identified: 
 

• To develop biophysical, social, and economic assessment tools and methods to provide relevant decision and planning support frameworks for identifying, co-designing and simulating NBS strategies for specific locations.
• Testing these tools and methods at the 9 demonstration sites/real environments, providing evidence on the value of ecosystems for DRR and Ecosystem based adaptation.
• Policy uptake and exploitation of the results of the project, by engaging different decision makers and policy makers at different levels. This will help to validate the results and identify next steps towards further implementation, as well as knowledge gaps that merit further research and development.

The paper -after a brief discussion on the main conceptual frame- will now present in sequence over the coming sections the results for these three strategic goals.

There is a realisation on the relevance to move earlier into the risk management cycle while helping to adapt to climate change and Disaster Risk Reduction (DRR). Here the role of mainstreaming and normalizing NBS as an alternative or complement to conventional grey solutions to prevent or reduce risks. Thus, increase resilience and response capacity to water related hazards. 

The interest in Nature-based Solutions (NBS) has significantly increased over recent years. The European Commission (2015) defines nature-based solutions as solutions that are inspired and supported by nature, which are cost-effective, and simultaneously provide environmental, social and economic benefits and help build resilience. NAIAD focused particularly on how NBS can help society become better prepared and more resilient to natural hazards, looking at the value from prevention in terms of avoided damages and other benefits, what we have termed “the assurance value”.  NBS offer different functions, from conserving or rehabilitating natural ecosystems, the enhancement or creation of natural processes in modified or artificial ecosystems, and can be applied from the micro- (e.g. a small wetland) or macro- (e.g. flood plain restoration) scales (WWAP/UN-Water, 2018). 

We have made a conceptual difference starting from the fact that the insurance value can have several interpretations or components depending on the value dimension considered, and more specifically who/what is insured: the ecosystem or the humans? and the risk considered. Thus the difference between nature insurance, when e.g. a mangrove is itself insured for the protective value as a financial product for risk transfer versus the “assurance value of nature”, i.e. the protective functions from nature itself, whether insured or not .(4) Theoretical aspects of the insurance value of ecosystems have already been covered in the literature (Pascual et al., 2010; Baümgartner & Strunz, 2014), yet there is a lack of operational methods building on these theories that enable cities or basins to assess strategies including NBS against grey strategies or status quo. 

A series of the tools and method has been developed and will be briefly presented in this paper (5). These schemes are designed to capture the natural Assurance Value in the reduction of risks that natural systems can secure (Denjean et al, 2018, Marchal et al. 2019 (6)). This includes the full range of economic, financial, regulatory, institutional and stakeholder mechanisms that regulate a sustainable and equitable flow of primary and co-benefits between NBS and society. What has developed is a structured, modular approach with the development of (1) methodologies to assess and value NBS biophysically, socially and economically, (2) the notion of risk perception and (3) experiences with implementation of NBS in the NAIAD case studies have furthered this definition of NAS to operationalize all elements of the enabling environment. 

The starting point for all of our demos was the biophysical assessment of their risks. Several tools and methods have been developed that can do this and that are suitable for the different scales. 

For example, the Eco:Actuary Toolkit was developed for the larger scale demos. This toolkit consists of three elements. First, the Eco:Actuary Decision Support Tool is a global spatial catastrophe model which maps flood risk and exposure under current climate and Intergovernmental Panel on Climate Change scenarios as well as loss mitigation and avoided losses by use of natural flood management (NFM) interventions. Second, the //Smart:River Freestations (see Fig 2) which links real time low cost DIY IoT-linked monitoring (FreeStations) to understand NFM contribution to flood risk reduction. Finally the Eco:Actuary Investment Planner, a simple, online spreadsheet based tool that allows assessment of the scale and approximate cost of different types of interventions required to achieve a specified flood reduction goal. The relevance to the insurance industry is that natural catastrophe models are commonly used tools in the insurance industry. They help insurers assess the severity of risk and thus set appropriate insurance premiums. The Eco:Actuary Toolkit includes a catastrophe model with a range of scenario options to explore the effects of climate change and flood mitigation options such as changes to land use, land management practices and natural flood management interventions.  

Figure 2: Image of a //Smart:River FreeStation: using IoT for flood prevention.

In some countries the insurance industry and national government are closely aligned with increased awareness in the insurance industry to help reduce flood risk. That is how insurance and mitigation interact. By investing in mitigation interventions, insurance companies could save on compensation in the long term. //Smart uses networks of low cost IoT connected water level loggers can be used for (a) understanding the effectiveness of flood mitigation measures, (b) monitoring peak flows during flood events as either an early warning system or a real time data feed for the development of parametric insurance, in which pay-out is made with a loss adjuster i.e. on the basis of flood depth.

Other tools and methods suitable for smaller scales were also developed like the «Flood-Excess-Volume» method and tool (FEV), which provides a rapid assessment on the cost-efficacy of flood-mitigation strategies: In order to optimise the tailoring of generic flood-mitigation strategies to specific river-catchment scenarios, an algorithmic protocol, or «tool», is required that can assess a wide range of measures in a clear, quantifiable, educational and user-friendly fashion that is accessible to a wide audience. Through a collaboration between the University of Leeds, UK, and the EU-funded NAIAD project, precisely such a tool has been developed and tested on data accrued from real flood events occurring in the UK, France and Slovenia (for more details please see: Bokhove et al., 2019, 2020) (for further details see the insert about the Flood-Excess-Volume tool).

The second type of method focused on the social assessment based on a participatory modelling tool for NBS co-design. The method aimed at handling ambiguity in risk perception though inclusive and equitable engagement of the different stakeholders. The tool was mainly based on system thinking approach. That is, the developed model aimed at defining and analyzing the complex and non-linear causal connections, affecting the behavior of the system to be managed. The tool is based on the sequential implementation of different phases: i) individual risk perception elicitation and analysis; ii) development of the System Thinking-based model; iii) detection of the main barriers to NBS co-design and implementation; iv) trade-off analysis and conflicts identification. Specifically, the analysis carried out in phases i) and iii) allowed NAIAD to bring stakeholders and decision-makers in a participatory process which main scope is to co-design effective interventions for reducing the water-related risks and producing the expected co-benefits. The methods implemented in phase iv) were meant to enhance the equity of the NBS implementation process.  Stakeholders were capable of recognizing their contributions in the model, developing a sense of ownership in the obtained results. The effectiveness of this approach to also develop indicators which are placed specific has now been developed for the Glinščica catchment (Santoro et al., 2019; Pagano et al. 2019), the Lower Danube (Giordano et al., 2020) and the Medina Aquifer (Giordano et al, 2020).

The Participatory Modelling approach adopted in many NAIAD demo sites contributed to engage different stakeholders in a NAS design process that was inclusive, legitimate and cooperative. This, in turn, contributes to enhance the NBS social acceptance. Specifically, the adopted method and accompanying modelling tool contributed to the inclusiveness and legitimacy of the participatory process by giving voice to the different point of views concerning the management of water-related risks. The tool aimed at enhancing the potential richness, diversity, and complexity of the collected knowledge, rather than searching consensus among participants. To this aim, the tool was based on individual cognitive models, representing the individual perceptions of the water-related risks to be dealt with, the main impacts at local level, and the main social issues that need to be addressed. The integration of the knowledge of the different stakeholders and the scientific knowledge allowed developing a model that was perceived as legitimate by the participants. They could recognize their contributions in the model, developing a sense of ownership toward it and the obtained results. 

Concerning the cooperation issue, two key benefits were produced during the participatory modelling process. Firstly, the stakeholders’ engagement for the model development contributed to build relationships among the stakeholders, and between them, the scientists, and the decision-makers. Secondly, the participatory modelling tool allowed unravelling the complex network of interactions taking place between the decision-actors involved in the NBS design and implementation. The results obtained in different demo sites showed that ineffective interaction networks represent a barrier to NBS implementation. Therefore, measures and actions are needed to enhance the cooperation among different institutional and non-institutional actors to effectively implement NBS.   

The economic assessment framework, which is one of the pivotal elements in the development of natural assurance schemes, was developed with accompanying detailed guidelines aiming to compare the main costs and benefits generated by NBS for water related risks. We particularly developed methods for the monetary assessment of different costs and benefits: 
 

• Costs of implementation: those that are necessary for the implementation and maintenance of the NBS included in the NBS strategies.
• Opportunity costs: related to the loss of benefits of areas that are taken out of production, or land that is used for NBS and that cannot be used for other profitable purposes such as the construction of building. These are the indirect costs of the NBS strategies.
• Avoided damages: the damages avoided due to the reduction of water risks generated by NBS strategies. Avoided costs are the primary benefit generated by NBS strategies aiming at reducing water risks.
• Co-benefits:  the additional environmental, economic, and social benefits generated by NBS. 

The economic assessment subsequently compares these costs and benefits over the life-time of alternative projects, grey, hybrid and NBS, with a Cost-Benefit Analysis. Our results reveal that the cost of implementation of NBS is lower than the cost of grey solutions for the same level of reduction of water risks. This reinforces claims about the cost-effectiveness advantage of NBS and would urge decision makers to consider more systematically these solutions to address water risks. However, the economic benefits related to the reduction of flood damages are not sufficient to fully cover investment and maintenance costs. This problem may be a challenge to have these solutions funded by sectorial financing mechanisms focused on the reduction of water risks. Instead more comprehensive projects would tap into all the benefits. 

Co-benefits (reduced air pollution, reduction of heat in cities, improved landscape, climate change mitigation…) and these represent the largest share of the value generated by NBS strategies. The co-benefits are needed for these solutions to be economically beneficial, while initially designed to reduce water risks. This multiplicity of benefits therefore requires project developers to look for and blend multiple sources of funding and financing. Enabling policies for NBS development would therefore require facilitating this process.

For the case of avoided damages, we relied on the expertise of CCR with their CAT Model. Modelling of overflow and runoff hazards is performed in the first unit; insured contracts geolocalized at the address level with information on the type of risk and insured value are available in the second unit; the last unit merges hazard to vulnerability with damage curves linking water height/water flow to destruction rate. Finally, it is possible to estimate the insured losses as consequences of a natural disaster (see the insert about CAT Models). 

The knowledge obtained in each demo case resulting from the biophysical, social and economic analysis is integrated into a global framework that can be applied in environments with different technical, biophysical, social and economic challenges. To facilitate the integration and use of the multidisciplinary knowledge, support methodologies have been designed for decision-making.

A series of additional methods and tools were created to integrate the different elements in the assessment like the development of a stakeholder engagement protocol that supported the whole process of problem identification, potential solutions and favoured strategy (see Annex 1), which translated into a strong process of co-design with local stakeholders. This was then linked to the adaptive planning cycle and the use of a specific natural assurance business canvas to identify potential revenue flows and the financing framework on how to fund these NAS schemes focused on identifying finance options available (particularly around blended finance, impact investment and performance based contracts). We now explain each of the integrative methods in more detail.

This section summarises some of the results from some our case studies. For reasons of space we only reflect on a number of them, namely the smallest and the largest case studies: the case of the Spangen neighbourhood in Rotterdam, which is being replicated in the Spanish city of Valladolid, the Thames, Lower Danube and the Medina del Campo case studies.

The Lower Danube case study covers an area of 250 km of the river. The strategy selected by stakeholders was flood plain restoration. Based on a structured process from the Stakeholder engagement protocol (see Annex 1), the main priority was to reduce the risk of floods and drought in the region. Stakeholders of the project (local and regional authorities, insurers, farmers, Watershed Management Authority, etc.) met with those responsible for the NAIAD project to discuss the most appropriate solutions to tackle the problems of the region, the direct benefits and co-benefits associated with these solutions. For this region based e.g. on the participatory modelling explained earlier, stakeholders identified the Nature Based Solutions preferred to reduce the risk, in this case the restoration of the Potelu pond and the restoration of the flood plains of the Bisret area were selected as a strategy. The direct benefits in this case are the flood risk reduction and the avoided damage costs, where the CAT Tool was implemented. Then, the associated benefits from the implementation of these solutions and the co-benefits associated to these solutions. 

Local development, increased biodiversity, decreased soil erosion and reduced population migration to urban areas were identified as the key co-benefits. Then, in a facilitated process of co-creation, stakeholders identified who owns the problem, who implements the solutions and the regulations that would regulate the implementation of the solutions (direct, indirect and extended beneficiaries that will be benefited, based on the use of the NAS Canvas), as well as qualitative estimates on the direct costs of the implementation, as the planning, construction, maintenance, monitoring among others. The direct costs of the execution of the work, of the planning, construction, maintenance and monitoring of the solution and possible funding instruments, revenue flows and / or financing options were also identified and analysed. Data, governance, and revision of legislation regarding land use change were identified as key resources. Finally, a series of monitoring indicators were defined to evaluate the effectiveness of the solutions and the provision of co-benefits.

The Eco:Actuary toolkit was co-developed with the insurance industry and implemented in the UK Thames region with local authorities and land owners.  During NAIAD we have held “Dragons’ Den” type pitches with investors keen to develop green investment opportunities. These include investing in large scale NFM and drought friendly farming practices, such as regenerative agriculture, and using the //Smart: system to quantify the contribution of those investments to mitigate flooding and drought.  We are also working with actuaries associations have also expressed an interest in a global climate risk index based on the Eco:Actuary global model. Finally a UK water supply company has invested in using the //Smart: technology developed during NAIAD to help advice farmers on best practices for reducing leachate using tillage and cover crops in drought-prone and nitrate-sensitive chalk aquifer areas.

The results of the monitoring and evaluation frame have shown that investment in Regenerative Agriculture is the most cost effective way of mitigating flood; if water stays on the land and is able to infiltrate, this very effectively reduces flood risk downstream. By improving infiltration, water remains available during seasonal droughts.  Regenerative agriculture has significant co-benefits including reducing carbon emissions from ploughing and increasing soil biodiversity and organic matter. Increasing rainfall infiltration will reduce runoff and erosion, and thus preserve soil fertility and prevent pollution of the waterways from agricultural runoff.

In the case of Medina del Campo, both droughts and floods were analysed. The Groundwater Directive 2006/118/EC and the Water Framework Directive 2000/60/EC impose the obligation for the Duero River Basin Authority (DRBA) to assess the impact and damages from existing pressures and to take measures to restore the good quality status by 2027. In the case of the Medina del Campo Groundwater body, the main threats identified include lowering piezometric levels, diffuse agricultural pollution (NO₃), and elevated arsenic contents of lithological origin. A first measure established by the DRBA to address these pressures was a water transfer from the neighbouring Adaja River and the Cogotas reservoir to substitute groundwater by surface water for irrigation in the Adaja irrigation district (6,000 ha). As a result, a localised recovery on piezometric levels was detected in the surrounding area due to the double effect of stopping groundwater extractions and increased replenishment from surface water losses. 

The NAIAD framework aimed to contribute to these challenges in the Medina case study. The study pursued to identify and assess possible Natural Assurance Schemes (NAS) that could help reduce water related risks while restoring the aquifers system status and functions. With this objective, a series of NAS strategies were co-designed with local stakeholders combining NBS and soft measures.  The process followed the iterative steps set by the NAIAD stakeholder engagement protocol (Annex 1). The collaborative approach was combined with an analysis of their legal and technical feasibility by the river basin authority.

Two NAS strategies were considered for reducing vulnerability against drought risk while restoring the aquifers system status and functions in the Medina del Campo Groundwater Body: 
 

1. Crop change towards drought resilient species, soil and water conservation practices, establishment of water user associations, abstractions monitoring and control and environmental awareness rising.
2. Aquifer recharge, establishment of water user associations, abstractions monitoring and control and environmental awareness rising.

The groundwater flow was simulated for three different climate scenarios and three different groundwater management scenarios: 1) Business as usual (BAU); 2) a reduction of Exploitation Index to 0.85 by year 2050 and beyond, and 3) a reduction of EI to 0.8 by 2050 (DRBA goal) and beyond. The last two models aimed to provide sensibility on the impact of small groundwater management changes. The main results were that groundwater management (through reducing the EI) has a much larger impact on piezometric recovery than climate change (through modified recharge of the aquifer).

The two NAS strategies proposed for coping with drought hazard risks in the Medina del Campo groundwater body were also economically evaluated under different scenarios following the economic cost-benefit analysis framework presented in Le Coent et al. (2020). 

The climatic and socio-economic/regulatory scenarios considered were selected using a combination of expert-based and participatory co-development approaches. The evolution of the EU Common Agricultural Policy (CAP) subsidies was identified by stakeholders as a critical driver of land use change. Consequently, both a current CAP scenario and a more environmentally oriented CAP scenario were considered. Regarding climatic scenarios, a preliminary assessment of trends in average and maximum precipitation using the RPC 4.5 and RPC 8.5 IPCC projections (CEDEX, 2012) showed that no significant trends existed in any of the rainfall series to the project time horizon (2050), in line with the risk assessment results (Llorente et al., 2018). Consequently, only one climate scenario, based on the historical trends, was simulated (Calatrava et al., 2019).

The economic impacts of the NAS strategies in terms of reducing drought risk have been assessed using an agro-economic model calibrated to the technical, economic, and hydrological characteristics of the study area. This model simulates land and water allocation among cropping alternatives to improve the aquifer’s conditions and to reduce drought risk in irrigated agriculture, under the different climatic and socio-economic scenarios considered, and computes several economic, social and resources use indicators. The method and results of the economic assessment of the impact of NAS strategies on the avoided damages is detailed in Calatrava et al. (2019). 

Although the strategies’ co-benefits have not been monetarily evaluated, the combination of the different analysis performed allowed for the qualitative and/or quantitative assessment of major expected co-benefits. 

Identified co-benefits include an increase in water productivity, job generation and the profitability of agricultural employments, suggesting a greater potential for higher agricultural wages. Regarding the environmental co-benefits, both strategies would have similar impacts on the improvement of the aquifer’s quantitative and qualitative status, although the artificial recharge in strategy 2 would accelerate the aquifer’s improvement and would positively impact on some riverine ecosystems. Lastly, strategy 1 implies a less intensive farming than strategy 2, as crop rotations and less water-demanding crops are fostered, resulting in an environmental improvement of agricultural systems. 

The results of the economic assessment show that the second strategy does not reduce drought risks but improves local riverine ecosystems, while the benefits of strategy 1 largely outweigh its costs, with a 3.17 benefit/cost ratio, even if the existing co-benefits were not considered (see Calatrava et al., 2019). However, strategies 1 and 2 are not conflictive but highly complementary and should be ideally combined to accelerate the aquifer’s recovery and increase other environmental co-benefits. Our results also indicate the importance of considering an integrated value frame (Lopez-Gunn, et al., 2020). 

Finally our smallest demo developed within the H2020 NAIAD project concerned flood mitigation in a neighbourhood of Rotterdam, Spangen. Here, an NBS was implemented which increases rainwater retention while reducing rainwater discharge to the sewage system. The neighbourhood did not have sufficient rainwater retention capacity, which is problematic during extreme rainfall events that are expected to become more frequent in the coming years. At the same time, the neighbourhood had been vulnerable in relation to drought (e.g. heat stress or degradation of foundations of buildings). As such, the municipality of Rotterdam concluded that the area required an additional 53,000 m³ of water retention capacity.

To meet the need for the retention capacity, the municipality prepared a water plan for the neighbourhood. Part of this plan was the realisation of a pilot project 'Urban Water Buffer’ (UWB) around a Sparta football stadium. The UWB relies on subsurface storage in which water is collected and stored during heavy rainfall events. Also, rainwater runoff from the roof of the stadium and from surrounding areas is collected, treated and recovered for irrigation. The project results in an increase of neighbourhood retention capacity of 1,500 m³ every 48 hours, which can contribute to flood as well as drought mitigation. 

In addition to the empirical study of the implementation and decision-making process evolving around the implementation of the UWB, the NAIAD project assessed the economic impact of three strategies for flood mitigation in relation to the entire neighbourhood of Spangen Rotterdam:
 

• Grey, being a separated sewer system and permeable pavement.
• Hybrid, being a separate sewer system with natural retention and infiltration at public squares, including aquifer storage.
• Green, being only green infrastructure for retention and infiltration. 

Critically, the analysis considered not just direct financial costs and benefits relating to the primary purpose of flood mitigation (which were designed to be equivalent in each option), but also considered a range of co-benefits that the NBS options produced.  These co-benefits included health impacts, impacts on property values, heat mitigation, roof lifespan extension (for green roofs) and potable water system savings from water reuse. 

The analysis found that the cost of implementation of grey solutions was higher (by 15 %) than that of NBS for the same level of risk management – therefore NBS are likely to be more cost-effective than grey solutions. Additionally, the co-benefits of the green option were estimated to be far higher than the flood mitigation benefits, making an attractive case for investment.

The solution is now in the process of being replicated in the city of Valladolid and the José Zorrilla Football Stadium, joining forces with the H2020 UrbangreenUp project in the same site, together with funding provided by the Partners for Water Dutch innovation fund and co-funding by the city of Valladolid, with the technical support of Aquavall, the local water company, the Real Valladolid Football club and the Duero River Basin Authority. This shows how nature-based solutions can mitigate flood and drought risks which are more likely under climate change scenarios while generating important co-benefits, made possible through the collaboration of cities, football clubs, local water companies and basin agencies, supporting innovations from European start-ups backed by the best scientific institutions.

The NAIAD Project has focused on the potential that nature-based solutions and green infrastructure offer for future proof investment for climate change adaptation, to increase the resilience at both territorial and city scale to floods and droughts. This increased resilience is built on the bundle of avoided damages and co-benefits that nature can provide. We have introduced the concept of a Natural Assurance Schemes (NAS) that cities and regions can develop, by sharing a range of NAS tools and methods: tools like Eco:Actuary or the FEV for biophysical assessments, a participatory modelling frame to capture stakeholders values and perceptions, an integrated cost benefit analysis, the framing into the adaptive cycle, a business model canvas for natural assurance schemes and a financing framework for water security, which are all part of the NAS Methodological Assessment frame. We have also presented some of the results of their application to four of our nine demos located across Europe spanning different scales: from large scale like the Thames basin (UK), the Lower Danube (Rumania) or the Medina aquifer (Spain), and Rotterdam (Netherlands), including its replication to Valladolid (Spain). 

At the end of the project experience a first NBS Dragons’ Den and NBS Pitches, were held with our demos, with a “mock” exercise with real private and public investors in our final demo meeting in Copenhagen (Jan 2020), and what elements would be needed to turn this knowledge into lessons learnt and bankable natural assurance scheme viable projects.

Equally a series of policy briefs and guidelines have been developed. In the final months, a series of national roundtables have been organised in different EU countries (Spain, France, Romania, Sweden and Slovakia) to directly present some of our results but even more important, validate these results and frame them into the wider policy discussions currently under way on the draft EU adaptation strategy, the new draft Law on Climate Change and the EU Taxonomy on Sustainable finance.  Here the focus has been to include in the conversation the role of NBS and potential natural assurance schemes in three gaps identified in conversations with DG Clima: the protection gap, the investment gap and the information sharing gap.

Ultimately NAIAD has provided a conceptual framework, a set of tools and methods and means for integration to have a better understanding on the role that nature based solutions can play for risk reduction and prevention, capitalizing on the assurance value of nature for both avoided damages and co-benefits, testing it in 9 demo cases at different scales and locations, and at different stages in the implementation cycle. As has been seen these frameworks and tools aim to support the integration of NAS into planning and implementation (gathering evidence of the effectiveness of the measures implemented) at different environments. The possibility to evaluate NBS will facilitate the incorporation of these solutions in, for example, river restoration plans, and therefore, funding for its implementation to convert them into real projects. Another key output of the project is a set of training materials on NAS implementation and assessment, through a MOOC (massive online Open course), that will be now complemented through an edited book with Springer currently in preparation. 

Altamirano, M.A., Benitez, Avila C., de Rijke, H., Angulo, M., Dartée, K., Nanu, F., Peña, K., Arellano, B., Mayor, B., Lopez-Gunn, E., Pengal, P., Scrieciu, A. (2020), Chapter 9, Closing the implementation gap of NBS for water security: Developing an implementation strategy for natural assurance schemes in Lopez Gunn, E.; van der Keur, P., van Cauwenbergh, N., Le Coent, P. and Giordano, R., (Eds) Greening Water Risks: Natural Assurance Schemes, Springer (forthcoming).

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• The assessment of the risk perception in the area.
• Selection and validation of the solutions more suitable (including hybrids, grey…).
• The identification of the co-benefits associated to these solutions.
• The co-identification of indicators to monitor these solutions along the time and see if they are being effective in reduce the risk, provide co-benefits…
• Additional discussion on possible NBS-Strategies, the most effective combination of different solutions.
• And in the final workshop, co-identification of potential business models derived from the solution selected.

This project has received funding from the European Union’s Horizon 2020 research and innovation programme under grant agreement No 730497. We also want to thank the Duero Basin Agency as strong supporters for this project.

For this paper we have also drawn on the work of many NAIAD colleagues. As a non-exhaustive list we want to thank in particular: 

Altamirano, M. and Basco, L., DELTARES (Netherlands)
Calatrava, J., and Manzano, M., UPCT (Spain)
Darte, K. and Peña, K., Field Factors (Netherlands)
de la Hera, A. and Llorente, M., IGME (Spain)
Pagano, A. IRSA, (Italy)
Piton, G. and Tacnet, J.M., INRAE (France)
Scrieciu, A., GEOECOMAR (Romania)
van Cauwenbergh, N.,  IHE-Delft, (Netherlands)
van der Keur, P., GEUS, (Denmark)