Climate Adaptation

Why Investing in Nature Makes Economic Sense

Impact Investments and Green Infrastructure in an Era of Rapid Urbanization

Can conservation efforts, green infrastructure, and “impact investments” actually lead to significant returns and protect against financial instability as the impacts of climate change worsen? On September 14th, 2015, experts from The Nature Conservancy (TNC) and The George Washington University (GWU) met for a Sustainable Development Forum to discuss the economic benefits of investing in nature – and the new strategies being employed by those on the front lines of environmental initiatives and programs.

The discussion, featuring TNC’s President and CEO Mark Tercek, TNC scientist Rob McDonald, and IIEP affiliates Marcus King and David Rain, was centered around Tercek’s recent book, Nature’s Fortune, and ideas it raises. In the book, Tercek explored “impact investments,” a conservation strategy that focuses on the economic benefit that a private actor can gain from investing in important social and environmental causes. Globally, this can translate into concrete action to improve water security, food security, and infrastructure needs. While private transactions will be vital in protecting against the problems that come with a changing climate, governments also have significant financial incentives to invest in climate change adaptation and green solutions to infrastructure issues.

David Rain, Associate Professor of Geography and International Affairs at GWU, brought his own experience in Ghana to the Forum’s discussion of how cities can reap economic benefits from natural investments. Flooding and other adverse effects of climate change, which are both physical threats and threats to financial stability to the African country, can be combated with natural capital. As urbanization increases the severity of the threats that come with weak infrastructure, strategic urban planning becomes a crucial tool in fighting against floods and other climate impacts – creating an effective buffer to protect urban populations.

This “natural capital” can be effective in more ways than expected, according to Rob McDonald of the Nature Conservancy. McDonald focused his remarks on takeaways from his recent book, Conservation for Cities: How to Plan and Build Natural Infrastructure. Even the increased growth of tree cover in urban settings can reduce temperatures and protect populations from the excessive heat that climbs each year. In cities like Washington, D.C., for example, green infrastructure is a “smarter, more cost-effective way to address infrastructure problems like storm drainage. The massive growth of urbanization that we are experiencing – and will continue to experience in the coming decades – does not have to occur alongside the destruction of nature. As McDonald and Rain emphasized, the costs of neglecting nature in the face of rapid city growth will come at a massive cost – to welfare and assets. As the efforts of organizations like the Nature Conservancy have made clear, the two can not only coexist, but improve together. The question then becomes: how can we achieve this reality?

According to Mark Tercek, mobilizing voters to put priority on the most important global sustainability issues is key to environmental progress. The Nature Conservancy works across the country to generate bipartisan support for conservation and green solutions to the problems facing the globe, like climate change and failing infrastructure. However, NGOs seeking to make major shifts in the way governments approach conservation and green infrastructure initiatives often face an uphill battle.

Despite some bipartisan successes, “partisanship is a two-way street,” McDonald acknowledged. “We have to spend a lot of time listening to what local groups want.”

Mark Tercek and David Rain highlighted how important it is to engage diverse communities in our efforts to find green solutions. The next generation of leaders in business, economics, and conservation hugely benefit from exposure to nature and STEM programs. Through community engagement that brings these issues to the forefront of urban and youth conversations, we can generate interest and a desire to pioneer different areas of green science and sustainable policies. From a policy standpoint, community engagement is critical in sharing the effects of impact investments and green infrastructure with those who would benefit most – and the voters who like-minded NGOs seek to engage.

The other strategy that Mark Tercek advocates in pushing environmental progress forward – and the one he has largely pioneered – is the formation of relationships between non-governmental organizations and big business, who initially seem to make an unlikely pair. Although the goals of environmental NGOs and major corporations have long been at odds, Mark Tercek seeks to change this relationship – instead recognizing their shared interests and the value each actor can bring to conservation efforts. In fact, Tercek highlighted the urgency and precision that businesses bring to such a partnership during his discussion.

“1 + 1 + 1 is worth more than 3. It’s worth multiples of that,” Tercek said, highlighting the value of a relationship that brings together public, private, and government actors into a mutually beneficial collaboration. Tercek stressed that environmental efforts need “more people, more money, and better dialogue” – and the forging of new partnerships is one pathway to achieving this goal.

“Collaboration is really important for achieving a bunch of society’s main goals,” he said.

The Nature Conservancy’s recent partnership with JPMorgan Chase, for example, led to the creation of NatureVest, an impact investment unit that bridges the gap between investors and viable conservation investment opportunities. By assessing risk, sourcing projects, and using TNC’s insight into science and policy areas, the organization is demonstrating how environmental initiatives are not only economically viable, but can create a large market for investors.

Tercek’s work catalyzed the discussion about the economic feasibility of natural investments and green solutions to the problems facing our planet.

“We’re winning battles, but we’ve got to be better and faster, or we might lose the war,” Tercek proposed. Watch the full panel discussion to learn more about the ways private, public, and government actors are (and should) work together to achieve universal goals.


The Institute for International Economic Policy (IIEP), which is located within the Elliott School of International Affairs, serves as a catalyst for high quality, multi-disciplinary, and non-partisan research on policy issues surrounding economic globalization. The Institute research program helps develop effective policy options and academic analysis in a time of growing controversies about international economic integration in many countries around the world. The institute's work also encompasses policy responses for those who face continued poverty and financial crises despite worldwide economic growth. Affiliated faculty have appointments in the departments of economics, history, and political science as well as the law and business schools.

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