NCEAS Project 12689

SNAP_Prioritizing investments in green infrastructure to meet urban water security needs in Latin America

  • Joshua Goldstein
  • Elizabeth Tellman

ActivityDatesFurther Information
Working Group27th—28th March 2014Participant List  

Water stress is an increasing global problem, with as much as 30% of the world’s population facing water shortages on a regular basis. Water stress arises because of growing water withdrawals for both irrigation and drinking water. This is will be exacerbated in the future by both rising demands from the expanding and urbanizing human population and higher evapotranspiration rates driven by global warming. Water scarcity can directly impact human wellbeing, by decreasing sanitation and food security and constraining economic growth in developing countries. Multilateral development banks and national governments historically have reduced water stress with large infrastructure projects such as dams, reservoirs, and wells. Water quality, which will be further exacerbated by lower flows, is generally addressed via expensive treatment plants. In addition to exacerbating existing water scarcity and quality concerns, predicted climate change impacts on precipitation (e.g., in Latin America) may increase the frequency and intensity of storm events. Flood events in developing countries have long-term economic impacts. Existing city flood control infrastructure may be overwhelmed and even destroyed by record river levels. However, increasing river channelization to respond to increasing flows can increase costs for water treatment as natural floodplains that filter toxins are replaced with concrete walls. Climate change will require some cities to adapt to complex problems of water scarcity, flooding, and reduced water quality. This overwhelming and expensive challenge can in some cases be partially met with natural infrastructure and holistic watershed management, reducing the need for costly built infrastructure. Furthermore, investments in watershed protection and restoration can provide additional benefits for biodiversity conservation, ecosystem services, rural livelihoods, and economic development. Water funds have created an innovative mechanism to mobilize and scale up investment in natural capital to meet cities’ growing water security needs. Starting with the pioneering program launched in Quito, Ecuador in 2000, over 30 water funds are now in operation, primarily in Latin America and expanding to the United States, Africa, Asia, and Australia. Water funds represent a promising strategy to advance the use of nature as infrastructure to meet human needs. To date, most investments in water funds and related natural infrastructure projects have arisen on an ad hoc basis, since systematic analyses on how to maximize return-on-investment have not been available. To fill this gap, our project has two overarching goals. First, we will develop and demonstrate a decision-oriented rapid assessment methodology to identify the most promising cities for water funds based on science (e.g., hydrology, economics, climatology), institutional analysis, and investment potential. We will explicitly incorporate scenarios related to future projections of climate change, population growth, and land use change. In addition to this “forward looking” analysis, our second goal is to analyze current activity with water funds to draw out key lessons learned to inform the design and implementation of future water funds in the most promising cities. Our methodology and analysis will focus on Latin America, especially Brazil and Mexico, where water funds have been deployed over the past two decades and influential decision-makers (e.g., multi-lateral banks, federal water agencies in Brazil and Mexico, Latin American Water Funds Partnership, Latin America Conservation Council) are positioned to use the deliverables of this project to replicate and scale up investments in water funds over the next 5-10 years