Nature-Based Solutions in Latin America and the Caribbean: Support From the Inter-American Development Bank
Countries in Latin America and the Caribbean (LAC) face a substantial investment gap in their work to achieve the Sustainable Development Goals (SDGs) and their nationally determined contributions (NDCs) to the Paris Agreement. This paper discusses how nature-based solutions present the IDB with an opportunity to maximize the impact of finance leveraged towards these goals in a way that prioritizes social inclusion and environmental sustainability.
Nature-based solutions are uniquely positioned to deliver benefits across multiple sectors and can serve as tools to both mitigate and adapt to climate change. Because of their ability to efficiently generate high-value services and co-benefits when combined with traditional gray infrastructure investments, NBS can play a critical role in maximizing the impact of capital invested in the region’s infrastructure. Integrating NBS and traditional infrastructure can improve overall cost-effectiveness, resilience, and performance of infrastructure service delivery.
NBS present an opportunity for the IDB to advance the region’s progress in achieving the SDGs and NDCs in a way that prioritizes social inclusion and environmental sustainability. As governments have limited resources to invest in infrastructure and increasing challenges resulting from climate change and ecosystem degradation, NBS offer cost-effective and resilient strategies to achieve their development priorities. By forging creative partnerships and building confidence in NBS through flagship projects and initiatives, the IDB can play a key role in developing and scaling NBS throughout the region.
The IDB 2020 Mainstreaming Action Plan for Environmental and Social Sustainability (2021–25) provides the formal operational guidance necessary to mainstream NBS within the IDB’s portfolio (IDB 2020c). Notably, the Mainstreaming Action Plan includes cross-cutting action plans related to climate action, disaster risk management, and natural capital, all of which include NBS considerations. This issue brief provides a baseline assessment of the IDB’s investment in NBS from which these plans can make progress.
- Governments across Latin America and the Caribbean (LAC) face formidable challenges in extending and maintaining infrastructure to serve their populations, especially as climate change and ecosystem degradation endanger communities and infrastructure assets across the region.
- To help address these challenges, the Inter-American Development Bank (IDB) aims to increase its support of nature-based solutions (NBS) in accordance with the Bank’s 2020 Mainstreaming Action Plan for Environmental and Social Sustainability.
- Because of their ability to generate benefits across multiple sectors, NBS can play an important role in maximizing infrastructure service delivery in economic recovery efforts in the wake of the COVID-19 crisis.
- The IDB offers technical and financial support for integrated green-gray projects, which utilize NBS as part of large-scale infrastructure projects. The IDB also supports clients to advance enabling conditions for effective NBS adoption across key sectors.
- This issue brief serves two main functions. First, it describes the IDB’s growing focus on NBS and provides a tour of the IDB’s main offerings regarding NBS project support and investment. Second, it serves as a baseline of the IDB’s activities related to NBS on which the Bank and partners can build moving forward.
- Going forward, the IDB will ramp up support for clients to incorporate NBS considerations and opportunity analysis in country agreements and throughout all stages of project preparation, from investment identification to execution.