Emerging roles for finance in river restoration and resilience
River restoration has primarily relied on public sources for funding projects, such as agency-based grants and philanthropy. More recently, there is growing interest in the potential role of private finance to offset the declines in public funding and to potentially increase the scale and scope of river restoration overall. This paper reviews broad concepts in finance and then describes two broad types of private sector approaches to capitalising restoration projects: voluntary markets and regulatory markets. Voluntary markets are those in which the participants – the restoration developers and those purchasing the benefits of restoration – enter the transaction and market voluntarily; such cases are rare but do exist. Regulatory markets are driven by policies and regulations, and thus market participants do so through regulatory compulsion and requirements. In the United States, there is a burgeoning of regulatory markets, which is, in turn, driving considerable increase in private capital and financing of restoration projects. In addition to reviewing case studies of these different types of markets, I also review the broader realm of environmental finance and place river restoration and river resilience within the expanding scope of markets, capital and privatisation.
