World Water Day is an annual event celebrated on March 22nd, dedicated to raising awareness about the importance of freshwater and advocating for the sustainable management of water resources worldwide. In the face of escalating water crises and environmental degradation, the call for innovative solutions to ensure sustainable water management has never been more urgent. Traditional infrastructure projects alone may no longer suffice to address the multifaceted challenges posed by water scarcity, pollution, and climate change. Instead, there's a growing recognition of the profound benefits offered by nature-based solutions, which bolster water resilience while harmonizing with ecosystems. Nature-based solutions encompass a spectrum of interventions, ranging from reforestation and wetland restoration to green roofs and permeable pavements. At ELI, one way that we engage with these topics is through our research on advancing nature-based resilience solutions in the Mississippi River basin.
Despite mounting evidence for the effectiveness of nature-based solutions, funding from public and private entities is not at the level needed to match the potential demand for these project types. It is therefore important to understand the challenges behind these funding mechanisms for nature-based water infrastructure projects. ELI analyzes cross-cutting issues around nature-based solutions including federal funding structures and burdens for water infrastructure projects. Utilizing this research and emerging federal policies, we identified several key areas for improvement in promoting funding opportunities for nature-based water infrastructure projects.
Funding Nature-Based Water Infrastructure Projects
Under the Biden-Harris Administration, the federal government is increasing efforts to advance water infrastructure projects that incorporate nature-based solutions. In September 2022, the White House Council on Environmental Quality published a “roadmap” highlighting opportunities for federal agencies to help accelerate use of nature-based solutions. However, the amount of federal funding allocated to nature-based solutions—and the accessibility of these funds— vary depending on the administering agency and the types of projects and communities seeking funding (e.g., grants set aside for tribal governments and communities facing environmental justice issues).
Previous ELI blogs detail recent federal investments made in water infrastructure, including funding through the Inflation Reduction Act. In addition, the Bipartisan Infrastructure Law provided $50 billion to the EPA specifically for water infrastructure projects. While these historic investments pave the way for more integration of nature-based solutions, there are clear challenges in accessing these funding opportunities for water infrastructure projects, including:
- Unclear guidelines for nature-based solutions in grants- Given that there are a broad range of projects that implement nature-based solutions, from bioengineering to urban redesign, it may be difficult for applicants to interpret funding guidelines with ambiguous language. Without clear and specific criteria outlining the eligibility and requirements for nature-based projects, applicants may struggle to tailor their proposals effectively or determine whether their projects align with funding priorities. Some grant programs have aimed to address this issue, such as FEMA’s Building Infrastructure and Communities (BRIC) grant program. They recently specified their guidelines for funding nature-based solutions by categorizing projects as either “neighborhood or site-scale” or for “watershed or landscape-scale” activities, “including those that support coastal resilience.” This is helpful for communities looking to define the scope of their water infrastructure project and where it fits within funding criteria.
- Cost share requirements- Federal grants for water infrastructure projects often don't cover the entire project cost, requiring the non-federal sponsor(s) to contribute financially. This arrangement, termed "cost sharing," ensures that federal grant recipients have a vested interest in project outcomes. Yet, it poses a significant barrier for many communities, especially those that are small, rural, or lack sufficient resources, as it can deter them from seeking federal grants and pursuing vital infrastructure endeavors. One way that federal funding programs attempt to solve this issue is through modifying their cost share requirements. For example, BRIC allows for various alternatives to the standard cost share percentage, depending on the recipient’s circumstances. This includes the designation of “Economically Disadvantaged Rural Communities” (EDRCs) or “Community Disaster Resilience Zones” which shift from a 75% federal and 25% non-federal cost share to a 90% federal and 10% non-federal cost share.
- Lack of technical expertise- Developing competitive grant proposals and navigating the intricacies of federal funding programs often requires technical expertise in areas such as engineering, environmental science, and grant writing. Communities lacking access to such expertise may struggle to effectively pursue federal funding opportunities. One example of a grant program aiming to provide technical assistance is FEMA’s Flood Mitigation Assistance (FMA) program. The FMA program offers several technical assistance documents on its website, including guidance on creating Benefitting Area Maps, Benefit-Cost Analysis reports, and Capability and Capacity Building Activities for Localized Flood Risk Reduction Projects. There are also instructions for submitting phased projects for funding. This guidance is an important first step towards capacity building, but more support is needed to promote effective, equitable distribution of program funds across eligible communities.
- Differing agency oversight- Nature-based water infrastructure projects are often regulated by multiple agencies, which can lead to complex coordination and fragmented decision-making. For example, a stormwater project incorporating natural processes across watersheds can trigger involvement of more than one local, state, and even federal agency. This can lead to bureaucratic hurdles, and delays in project approval and implementation. One example of a project overcoming differing agency oversight is through the City of Portland. After facing bureaucratic hurdles through environmental site assessments, the City decided to create a formal interagency agreement that streamlined leadership from federal agencies and facilitated easier sharing project information. This resulted in a more efficient permitting process and strengthened relationships between the agencies.
Despite these challenges in the existing funding landscape, we see opportunities to promote more accessible and streamlined financing for nature-based water infrastructure projects. Steps might include:
- Consolidating funding programs across various federal agencies into a single, cohesive initiative focused specifically on nature-based solutions for water infrastructure. This consolidation might streamline the application process, reduce bureaucratic hurdles, and provide clearer guidelines for project eligibility and funding criteria.
- Enhancing coordination and collaboration among federal, state, and local agencies. This would facilitate a more integrated approach to funding allocation and project implementation. This might involve establishing interagency task forces or partnerships to identify priority areas for investment, share best practices, and avoid duplication of efforts.
- Providing technical assistance and capacity-building support to underserved communities, particularly those with limited resources or expertise, can help bridge knowledge gaps and empower local stakeholders to develop and implement nature-based water infrastructure projects effectively.
- Incorporating metrics for monitoring and evaluating project outcomes, such as ecosystem health indicators, social equity measures, and cost-benefit analyses, would ensure accountability and inform future funding decisions based on evidence of success and impact. By leveraging these opportunities to improve and streamline federal funding mechanisms, the U.S can better support the widespread adoption of nature-based solutions for water infrastructure and ultimately enhance environmental sustainability, community resilience, and public health.
What’s Ahead
As we confront the complexities of water management in the 21st century, embracing nature-based solutions offers a pragmatic and sustainable pathway forward. By harnessing the resilience and functionality of ecosystems, we can forge resilient water systems that benefit both people and the planet. However, realizing this vision requires bold investments, collaborative partnerships, and supportive policies that prioritize the integration of nature-based approaches into water infrastructure planning and implementation. These goals will continue to inform ELI’s work in promoting climate resilience through nonpartisan, scientific-based research. To learn more about these issues, we invite you to connect with our Climate Resilience and Hazard Mitigation program and other external opportunities.