Quantifying the Co-Benefits of Nature-Based Solutions: A Choice Experiment Approach to Flood Risk Adaptation in the Netherlands

The increase in frequency and severity of climate risk events highlights the need for investing in climate change mitigation and adaptation. Nature-based solutions (NBS) have proven to be effective at limiting the impacts of different climate risks. Despite their proven effectiveness, there is little investment in NBSs as a climate change adaptation solution. A cause for this NBS finance gap is the diversity of NBS benefits, many of which are difficult to quantify in monetary units. Without an accurate understanding of co-benefits, the societal return on investment of NBS would likely be undervalued and less attractive in investment decisions when compared with traditional solutions in cost-benefit analyses. 

 

By means of a novel choice experiment, this study aims to improve the monetary quantification of NBS co-benefits. A survey was distributed in the Netherlands to over 2,000 respondents, with a deliberate oversampling of participants from Limburg, a region that suffered from devastating floods in 2021. We employ a co-creation approach involving local stakeholders for our experimental design and for the selection of NBS solutions presented in the experiment. Additional topics explored through our choice experiment include land use change and environmental preferences of respondents in their trade-offs. We also assess how respondents' perspectives on equity and redistribution impact willingness-to-pay to protect higher risk areas and lower-income households through publicly funded policies. 

 

Findings from the choice experiment show monetary values assigned to different benefits of NBSs for flood risk reduction, and how respondent characteristics may influence these values. Additionally, we assess how the valuation of NBS-benefits differs between areas that were recently flooded compared to low-risk areas. Results from this study can be coupled with a flood risk model to obtain a comprehensive figure of benefits of NBSs as a flood adaptation measure, which may be applied in cost-benefit analyses or other decision-making tools by policymakers and institutional investors.