What is economic development?

Economic development can be defined in many ways, but it involves the transformation of an economy in a country, region or community which improves the well-being and quality of life of the population. This typically involves increasing income levels, reducing poverty, creating jobs, improving access to education and healthcare, and improving living standards and environmental conditions 

Addressing economic development with NbS

Economic and social development is one of the most understudied societal challenges when it comes to how they be addressed with NbS. The economic impacts of NbS have mostly been studied in terms of income, revenue and labor demand and, to a lesser degree, skills and training, job security and economic growth. Most studies found the incomes and revenues were mostly impacted with mixed results and labor demand was mostly positively impacted.  

NbS across ecosystems and interventions can support economic development in several ways. For example: 

  • Securing good environmental conditions is important for any economic sector, as all sectors are dependent on natural functions and resources either directly or through their supply chains. Protecting and restoring ecosystems is crucial to reduce financial risks caused by nature and biodiversity loss and provide sustainable jobs.  

  • In an urban setting, investing in NbS can improve the urban environment and living conditions, which in turn can boost local property values, job creation and public health.  

  • Working with NbS can provide jobs, from planning to implementation and ongoing maintenance and care.  

  • Involving private sector investment in NbS can contribute to sustainable economic development. The demand for nature-based enterprises is on the rise. Nature-based enterprises work with and for nature to address societal challenges and biodiversity loss as the core of their mission and operation with their products and services supporting NbS. They can be involved in planning, implementation or maintenance of NbS. Important enabling factors for nature-based enterprises are supportive politicians and public authorities, economic incentives and funding, environmental awareness among the public, knowledge and tools for measuring impact and valuating outcomes, the dependence on nature with its ecosystem services, and government interventions like legislation and regulations. 

What to think about...

Nature-based solutions should address societal challenges while providing benefits for human well-being, ecosystem services and biodiversity. However, when working with NbS, one can easily forget to accommodate for ecosystem service provision that benefits human well-being and the economy. It is important to pay attention to these aspects and make trade-offs when needed. For example:  

  • While improving the urban environment can boost the local economy, it can also cause gentrification due to increased property prices. This issue should be addressed when considering adopting a strategy to implement NbS to boost local economic development. 

  • While NbS offer several opportunities for economic development, it can also, in some cases, pose challenges for certain sectors, such as forestry and agriculture, where profitability might be affected. Recognizing and addressing such potential impacts is essential to ensure a balanced approach.  

  • There are also nature-based approaches that are specific to certain sectors like agriculture and forestry. Changing to more sustainable practices may also be profitable in the long run, as it reduces the risk of depleting natural resources. 

To ensure that the NbS is meeting its goals for economic development, it is essential to have monitoring in place. This can include indicators to monitor property values, number of new businesses and jobs created, retail and commercial activity, gross value added to local economy, recreational monetary value, or overall economic, social and health wellbeing in proximity to NbS. 

NbS with a focus on economic development

It is important to highlight the societal benefits of each nature-based solution, considering the context-specific potential that is determined by ecosystem characteristics. We encourage users of this handbook to fully realize the potential within the specific context of the ecosystem and to set clear targets that can be followed over time. Working with nature to improve the living conditions for humans and biodiversity, while securing important natural functions, can contribute to a more sustainable economic development.  

Are you unsure how to choose an NbS that addresses economic development? See our general guidance on Nature-based solutions!  

References

Chausson, A., Smith, A., Reger, R. Z. Z., O’Callaghan, B., Mori Clement, Y., Zapata, F., & Seddon, N. (2024). Harnessing nature-based solutions for economic recovery: A systematic review. PLOS Climate, 3(10), e0000281. 

Dumitru, A., & Wendling, L. (2021). Evaluating the impact of nature-based solutions: Appendix of methods. European Commission. 

Dunlop, T., Khojasteh, D., Cohen-Shacham, E., Glamore, W., Haghani, M., van den Bosch, M., ... & Felder, S. (2024). The evolution and future of research on Nature-based Solutions to address societal challenges. Communications Earth & Environment, 5(1), 132.  

Kooijman, E. D., McQuaid, S., Rhodes, M. L., Collier, M. J., & Pilla, F. (2021). Innovating with nature: From nature-based solutions to nature-based enterprises. Sustainability, 13(3), 1263. 

McQuaid, S., Kooijman, E. D., Rhodes, M. L., & Cannon, S. M. (2021). Innovating with nature: factors influencing the success of nature-based enterprises. Sustainability, 13(22), 12488. 

McQuaid, S., Kooijman, E., Rizzi, D., Andersson, T., & Schanté, J. (2022). The vital role of Nature-Based Solutions in a Nature Positive Economy. Brussels: European Commission. doi, 10, 307761. 

Tedeschini, F., Blaettner, D., Tuerk, A., Klinkenbergh, O., McQuaid, S., Brangan, E., Romanovska, L., Chen, W., Chakravorty, D. & Furuseth, I. S. (2024). Markets, financing and incentives for NbS WP3, Task 3.3. Deliverable 3.3 in Invest4Nature.  

World Economic Forum, P. (2020). Nature risk rising: Why the crisis engulfing nature matters for business and the economy. WEF, Geneva, Switzerland.