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Heavy rain and flooding
Natural Environment

Drought and flood: Harnessing nature to fight climate risk – Part 1

Hard engineered, “grey” infrastructure projects such as sea walls and dams can be costly, carbon intensive and poorly adapted for changing climate scenarios. Nature-based solutions, meanwhile, can enhance defences against water related risks, while promising a range of green and economic dividends.

Organisation for Economic Co-operation and Development (OECD)
5 August 2021

There is a significant and growing body of scientific evidence documenting that climate change will intensify the risks of water-related hazards. By creating a warmer lower atmosphere, climate change is altering the water cycle through an increase in evaporation, evapotranspiration and precipitation and changes to atmospheric circulation, which can lead to wet regions becoming wetter while dry regions become drier.

Compounding these risks, a deteriorating natural environment worldwide is increasing vulnerability to water-related hazards. A range of interlinked pressures, such as the loss and degradation of natural areas like wetlands, soil sealing and the densification of built-up areas are undermining ecosystem functionality. This challenges the provisioning of ecosystem services, resulting in negative impacts on human well-being.

To reduce the exposure to water-related risks, countries have made significant investments in grey infrastructure, such as dikes or dams. While they have provided protection and other vital services on which human lives depend, such as regulating water supply and generating hydropower in the case of dams, they equally have limitations. First, grey infrastructure can be costly to build and to maintain, and when it fails, it has shown to cause significant ripple effects. Second, grey infrastructure is long lasting and inflexible, and in the past has been designed assuming static hydro-climatic conditions. For example, coastal defences have become increasingly expensive to adapt to rising sea levels (e.g. by widening or raising) and to maintain over time. The high costs of adapting inflexible grey investments can lead to vulnerability to failure under changing climatic conditions. This puts large, costly infrastructure projects at risk of becoming ‘stranded assets’, failing to deliver their designed services when conditions change, with potential catastrophic consequences (such as a dam breach). Finally, grey infrastructure can undermine the ability of natural systems to regenerate – for example, coastal dikes can intensify land subsidence and prevent the natural accumulation of sediments by tides, waves and wind.

The high costs of adapting dikes and dams can increase vulnerability to failure under changing climatic conditions. This puts large, costly infrastructure projects at risk of becoming ‘stranded assets’, failing to deliver their designed services when conditions change, with potential catastrophic consequences.

There is increasing evidence on the performance of nature-based solutions (NbS) to reduce water-related risks, highlighting features which make NbS particularly well suited for adapting to changing climatic conditions. These include:

    • NbS may be a “no-regrets” adaptation measure, as they can yield benefits even in the absence of climate change, making them an effective way to cope with climate variability and change. For example, urban parks can reduce the urban heat island effect and absorb floodwater, while providing recreational value, improving air quality, and making a space more economically attractive.
    • NbS can assist in managing uncertainty related to climate change by avoiding or delaying lock-in to capital-intensive grey infrastructure, allowing for flexibility to adapt to changing circumstances. For example, a floodplain may attenuate larger flood volumes than can be held within a levee lined river channel, with co-benefits of sustaining bird and fish species and providing recreational benefits to people. Another example is emerging evidence that mangroves can keep pace with moderately high rates of sea-level rise.
    • The benefits of NbS have been found to outweigh the costs of implementation and maintenance in a range of contexts (see below for more detail).
    • NbS can increase the effectiveness and operable life of grey infrastructure. For example, integrating NbS into grey flood control measures can increase water absorption capacity, reduce velocity, and regulate peak flows. In the Odra basin in Poland, natural flood retention areas (dry polders) were combined with traditional flood embankments to protect against the recurrence of a very severe (1,000-year) flood.


The economic argument for NBS

There is growing evidence of the economic benefits of maintaining natural habitats through avoided losses to water related disasters. For example, in the Northeast of the United States, protected coastal wetlands are estimated to have helped prevent over USD 600 million of direct property damages during Hurricane Sandy. Globally, it is estimated that without mangroves, 15 million more people would suffer from flooding annually.

Research has shown that in some cases, NbS can be more cost-effective than grey alternatives, and in particular for less extreme hazards. For example, across 52 coastal defence projects in the United States, NbS were estimated to be 2-5 times more cost-effective than grey infrastructure, and most effective to defend against waves up to half a metre high and at increased water depths. However, studies which compare the value of NbS to alternative approaches are rare, and economic appraisals often do not properly capture or value the full suite of co-benefits of an NbS.

Across 52 coastal defence projects in the United States, nature-based solutions were estimated to be 2-5 times more cost-effective than grey infrastructure.

In addition to reducing losses and damages, the multiple co-benefits of NbS can have significant economic value. For example, in Europe, it was found that restored rivers, in addition to increasing flood protection, enhanced agricultural production, carbon sequestration and recreation, yielding an estimated net societal economic benefit over unrestored rivers of an estimated €1400 per hectare per year.

Finally, investments in NbS can stimulate the economy by creating jobs, much the same way as investments in grey infrastructure. For example, the American Recovery and Reinvestment Act of 2009 financed coastal habitat restoration projects that yielded 17 jobs per million dollars invested. In the European Union, it is estimated that restoring 15% of degraded ecosystems, consistent with Target 2 of the EU 2020 Biodiversity Strategy, would result in between 20,000 and 70,000 full-time jobs.

This article is excerpted from the OECD policy paper: Nature-based solutions for adapting to water-related climate risks

Download the full report here