Methods, tools and skills for a clear appraisal of economic costs and benefits of NbS

Further developing methods, tools and skills for a clear appraisal of economic costs and benefits of NbS, e.g., related to natural capital accounting and financing of NbS, is key for the development of attractive business models and cases, and advancing the methodologies and tools for systematic evaluation of benefits and co-benefits. More research is also needed to differentiate between financing, governance and business models at different scales of financing. Closely linked to the implementation and capacity building, stakeholder feedback shows that while numerous valuation methods per se exist, a significant challenge remains in capacities and skills required for, e.g., regions or municipalities to consistently evaluate the impacts of NbS, alongside with their communication to the public. Moreover, more research is needed into the transaction costs for NbS planning and implementation, which sometimes appear to be higher than for traditional engineering projects, because there is a broader set of stakeholders and government agencies that must coordinate on NbS projects. These transaction costs must be factored into any appraisal of the economic costs and benefits of NbS. A clear appraisal is needed to operationalise NbS in business and developing investment capacities for NbS, and is recognised as a priority question by economic actors. As the World Economic Forum states, “significant barriers are inhibiting their deployment at scale, in particular how investment is linked with inclusive economic benefit, project prioritisation for sustainable financing”.