Funding for Nature Based Solutions
Determining how new approaches to flood and erosion control impact budgeting practices can be an important step in setting such projects up for success. The University of North Carolina’s Environmental Finance Center provides an excellent reference for budget officers that provides based on issues such as long-term operations and maintenance, necessary additional infrastructure, lifecycle costs, etc. (Download PDF)
Funding Nature-Based Solutions
There are a wide array of funding sources or approaches available to municipalities that are interested in investing in nature-based solutions, from local taxes and fees to federal programs. Both the EPA and the Georgetown Climate Center have put together extensive resources on funding and financing opportunities specifically focused on the implementation of nature-based projects. While these resources focus largely on managing stormwater, they provide an excellent overview of the kinds of sources of funding that may be available to a community.
Taxes provide municipalities with the most consistent stream of income to fund both the implementation costs and the operation and maintenance costs associated with a nature-based approach. State and local governments across the United States have implemented different types of taxes to fund specific flood reduction strategies.
- In Iowa a state Flood Mitigation Board relies in part on an incremental increase in the state sales tax to raise funds for flood mitigation projects. The board was created in 2013 and, as of their 2015 annual report, had approved nearly $600 M in flood reduction projects.
- The nine counties that make up the greater San Francisco Bay area have established a $1/month parcel tax over the next 20 years to fund wetland restoration efforts to address the impacts of climate change and sea level rise. All told this will create $25 M a year for restoration activities, with a lifetime total of approximately $500 M in funding to support the efforts of the San Francisco Bay Restoration Authority.
- The five towns on the east end of Long Island implemented the Peconic Bay Community Preservation Fund, a 2% tax on real estate transactions. The proceeds of this tax are directed towards open space preservation, water quality improvements, and projects that increase overall coastal resilience. Since its inception in 1998, the fund has raised over $1 B.
Fees are another means of generating the necessary funding for flood reduction projects. Tying fees to activities that are related to flood or stormwater management also provides an opportunity to offer incentives to promote individual actions at the homeowner scale that can help the broader stormwater management system deal with flooding events. Stormwater fees in particular are a common means of funding stormwater management activities, though they are often driven more by water quality challenges than by water quantity challenges. The EPA has put together guides on using stormwater fees as well as employing incentive programs.
There are numerous federally administered programs and grant opportunities that municipalities can take advantage of to fund nature-based flood projects. Below is a small sample of the more commonly used programs.
- FEMA Hazard Mitigation Grant Program – The HMGP provides funding for communities that have suffered a Presidentially declared disaster and allows for activities such as home elevations or buy-outs, among other things. https://www.fema.gov/media-library/assets/documents/103279
- FEMA Pre-Disaster Mitigation Grant Program – The PDM program is designed to help communities prevent damage from disasters before they happen. Activities can only be funded if they are included in a Hazard Mitigation Plan, but funding can be applied to planning activities as well as project based activities.
- FEMA Hazard Mitigation Assistance, Climate Resilient Mitigation Activities – FEMA now allows hazard mitigation assistance, whether via the HMGP or the PDM programs, to be directed at activities intended to reduce the impacts of climate change, with a special focus on flooding and droughts.
- FEMA Environmental and Historic Preservation Fact Sheet (pdf) – FEMA provides funding for culvert upgrades under their HMA programs.
- HUD Community Development Block Grant – Disaster Recovery Program – The CDBG-DR program, administered by HUD, is intended to provide funding for low- and moderate-income communities to help recover from disasters. The funding is only available after a Presidential disaster declaration has been issued, however it is highly flexible and can be used in a number of ways to promote more resilient communities. In the aftermath of Superstorm Sandy, and through the National Disaster Resilience Competition, HUD has been more permissive with these funds, allowing them to be used for a wide array of activities from buy-outs of homes to watershed protection and restoration to planning activities. HUD has additional resources available for promoting community resilience
- NOAA Regional Coastal Resilience Grants Program – The NOAA Regional Coastal Resilience Grants Program helps communities increase preparedness and improve coastal resiliency measures. This program is applicable to nonprofit organizations, higher education institutions, regional organizations, private entities and local, State and tribal governments that work toward resiliency strategies for land and ocean use, disaster preparedness, environmental restoration and hazard mitigation projects benefiting coastal communities.
- NOAA Regional Coastal Ecosystem Resiliency Grants Program – This program is specifically focused on promoting resilience of coastal ecosystems, largely through coastal restoration activities. Grants are offered on an annual basis.
- U.S. Department of the Interior’s Fish and Wildlife Service, Coastal Program – The USFWS’s Coastal Program utilizes tax revenue from hunting, boating, and fishing in order to reinvest in conservation and coastal wetland ecosystems. A primary goal of the program is centered on seeking to help mitigate flooding and increase water quality. Grants opportunities are offered for restoration and protection of coastal wetlands, amongst other things.