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Securing Infrastructure Benefits With a Natural Capital Approach

January 11, 2017 |


This report is a product of the Natural Capital Project. Their full document ‘Use Cases and the Natural Capital Science-Technology Platform‘ can be downloaded here.

The Inter-American Development Bank, through its Biodiversity and Ecosystem Services Program (BIO), is helping governments integrate the value of biodiversity and ecosystem services into infrastructure planning and loan decisions, with pilot projects in countries throughout Latin America and the Caribbean, including Colombia, Barbados, and the Bahamas.

“Better infrastructure is key to tackling poverty and promoting inclusive growth. Yet infrastructure projects that fail to take into account environmental and social objectives can lead to conflicts and ultimately fail to deliver the development benefits envisioned.”

– Luis Alberto Moreno, President, Inter-American Development Bank

Trillions of dollars will be spent on development in the coming decades to meet the demands of a growing and urbanizing global population, with USD $60 trillion projected for road and rail infrastructure alone by 2050. As infrastructure networks expand, so too do opportunities for investing in biodiversity—the web of life that provides countless benefits to people and economies. Wisely managed, biodiversity and ecosystem services hold significant promise for securing long-term growth and prosperity.

Until recently, governments lacked the ability to easily identify where ecosystem services originate. This has meant that valuable places that provide clean water, erosion control, and climate regulation have not been recognized within the process of siting infrastructure projects. Without this information, new roads, dams, and seawalls could cause unintended harm to local people. For example, a new road, built to spur trade and travel could also promote deforestation, creating a cascade of impacts, including local and downstream declines in water quality, release of stored carbon dioxide, and exacerbated flooding and landslide risks from the loss of stabilizing vegetation. Unexpected loss of such ecosystem services can translate into unbudgeted costs for maintenance, water treatment, and disaster relief, as well as risks to businesses dependent on the infrastructure.

Awareness of these risks is growing, and governments and multilateral development funders such as the Inter-American Development Bank (IDB) are investing in efforts to map and preserve ecosystem services, recognizing their crucial support of long-term, sustainable growth.


Promising Advances

Advances in remote-sensing, software, and data processing technologies make it possible to map ecosystem services throughout a region or an entire country, so that infrastructure can be built away from sensitive areas. New tools allow stakeholders and decision-makers to easily compare cross-sector impacts and benefits of various development scenarios. The Colombian government is among the first worldwide to legally require the assessment of biodiversity and ecosystem service ben- e ts to people in all development permitting decisions. The Colombia Ministry of the Environment and Sustainable Development is now using a simple spatial assessment tool to systematically evaluate the environmental impacts of all proposed infrastructure projects and o sets. This information can then be weighed explicitly in conjunction with cost and with human well-being benefits considered in standard permitting decisions.

IDB and other partners are extending the work in Colombia to create custom software for governments undertaking spatial planning processes that make trade-o s in development and environmental objectives more transparent, and cross-sector planning between transportation, forestry, fisheries, tourism, water, and energy faster and easier. These approaches have been co-developed with The Natural Capital Project for coastal planning in Belize, and work is underway for Andros Island in the Bahamas, and for Barbados as it launches a national coastal marine planning process.


Solutions, Science & Tools

The Natural Capital Project has co-developed a free, open source software tool that makes the localized consequences of development transparent by identifying for specific infrastructure projects where ecosystem services are being provided, where they will be lost, and which communities will be affected. The software, O set Portfolio Analyzer and Locator or OPAL, can also highlight mitigation and compensation options that benefit specific communities who will lose ecosystem benefits as a result of development. The OPAL software came out of an early partnership with the Colombian government and The Nature Conservancy to determine ways of compensating for development’s damage to ecosystems and the benefits they provide. Similarly, for coastal and marine development planning, The Natural Capital Project’s free, open source InVEST tool enables scenario analyses that can promote sustainable development while ensuring the long-term viability of coastal habitats that support economies and livelihoods.


Scaling Up

The Inter-American Development Bank funds USD $1.8 billion for infrastructure projects annually throughout Latin America, and is a leader in supporting development that reduces poverty and inequality and achieves sustainable growth. The tools that are making cross-sector analyses fast and freely available have the potential to transform how development is pursued throughout the region, beginning with the Bahamas and Barbados, where IDB has been active in development planning for over 30 years. Additionally, this work is synergistic with the Latin American Conservation Council’s “Smart Infrastructure” initiative, launched in 2015, with project pilots in Mexico, Colombia, Brazil and Peru.

As interest in including ecosystem services in infrastructure planning processes grows, software like OPAL and InVEST will help fulfill demand for on-the-ground information about trade-o s. The governments of Peru and Paraguay are implementing ambitious o set policies, and several governments in Asia and Africa are embarking on spatial planning to guide siting of infrastructure development by considering multiple aims for a region or country’s environmental needs.

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