Nature-based solutions (NbS) and ecosystem-based adaptation (EbA) are the point of discussion in terms of climate change effects, mitigations, and resilience strategies. 

Nature-based Solutions (NbS) – defined as actions to protect, sustainably manage, and restore natural or modified ecosystems to address societal challenges, simultaneously providing human well-being and biodiversity benefit – are crucial for sustainable development (IUCN Global Standard for NbS, 2020). NbS are one of the best tools available to enable the essential revolutionary change to address climate change due to its sustainability, cost-effectiveness, and scalability. As an umbrella word, NbS incorporates approaches to addressing climate change that involve collaborating with nature, such as ecosystem-based adaptation (EbA) and ecosystem-based mitigation (EbM). EbA, also known as Nature-based Solutions for Adaptation, includes a wide range of ecosystem management activities, such as the sustainable management of forests, grasslands, and wetlands, that increase people's and the environment's resilience to climate change. 

EbA measures include the restoration of coastal habitat in ecosystems such as coral reefs, mangrove forests, and marshes to protect communities and infrastructure from storm surges; agroforestry to increase crop resilience to droughts or excessive rainfall; integrated water resource management to deal with consecutive dry days and changes in rainfall patterns; and sustainable forest management interventions to stabilize slopes, prevent landslides, and regulate water flow to rivers. 

Cost-benefit analysis (CBA) was discussed in UNDP publications which is taken as a reference to help break down the CBA of EbA solutions. CBA can be used to assess the economic and financial viability of EbA interventions. CBA is a systematic approach that compares and expresses the costs and benefits of a project during its entire duration in one measurement (typically in monetary terms). The following explanation sheds light on the economic complexities behind ecosystem-based adaptation, providing useful insights for people seeking to comprehend and engage with the transformative potential of nature-based solutions. 

Let us consider a coastal place, due to climate impact it is vulnerable to facing huge storm surges. There will be solutions like building big walls, relocating the people to higher areas, or adopting EbA practices like mangrove plantations in coastal regions to help absorb the shocks and reduce the high waves. Let’s break down the economies of each intervention as CBA. 

Mangrove Plantation: Let us consider the initial cost of planting mangroves is 50 lakh rupees, which includes preparing the land, plantation, and monitoring their growth. In addition, an annual expenditure of 5 lakh rupees is required to maintain the mangroves and facilitate their interaction with the community. However, this investment is more than offset by the benefits that mangroves provide. For every rupee spent on mangroves, we receive a return of 10 lakh rupees. Stormy waves are less likely to damage a mangrove maze, which saves us 10 lakh rupees each year in repairs and lost homes. In addition, the mangroves provide a habitat for fish, which increases the local catch by 1 lakh rupees each year. Mangroves also absorb carbon dioxide, which helps to combat climate change and earns us 50,000 rupees each year. Finally, beachgoers enjoy the mangroves and contribute 30,000 rupees each year to the local economy. 

Building the Walls: Constructing a concrete barrier against the ocean might seem like a sturdy solution, but the price tag will be steep—Rs 1 crore investment! And that is just the beginning. Every year, we will have to shell out another 10 lakhs to keep the barrier from eroding under the salty spray. While it may hold back the waves for a time, it will not bring in any additional fish farming or help to combat climate change. And consider the beach—replaced by a gray dull wall, hardly a tourist attraction. 

Moving Communities: Uprooting everyone and finding them new homes on safer ground sounds , but let's see the expenses. Finding land, building houses, and helping communities settle in won't come cheap – 2 crore rupees, to be precise. Every year, we'll need to spend another 2 lakhs to support the community and keep life running smoothly. But here's the thing – we won't get any of the benefits like fish, carbon credits, or tourism. It's just a big expense, one that doesn't solve the problem at hand. 

So, which option is better? The number speaks for itself. Mangroves, with their green benefits and fishy friends, have the highest Net Present Value (NPV) of about 6.69 crores over 10 years. This means that for every rupee invested, we will receive 13 rupees in return. In comparison, the wall and relocation options are less cost-effective and will leave us with less money and no good ecosystem. 

To calculate NPV, first list all future costs and benefits associated with each option. Then, using a predetermined discount rate (such as 5%), you calculate the present value of each cash flow while accounting for its timing. Finally, you subtract the sum of discounted costs from the sum of discounted benefits for each choice. 

Of course, this is merely a snapshot. Other factors, such as social and environmental impacts, must be considered, and the community must be involved in the final decision-making process. However, one thing is clear: EbA practices like mangroves provide green, cost-effective, and enhance ecosystem to coastal issues. As awareness and understanding of NBS and EbA grows, and as funding becomes more available, these solutions are likely to play an increasingly important role in the fight against climate change. 

References:

UNDP (2015a). Making the Case for Ecosystem-based Adaptation: The Global Mountain EbA Programme in Nepal, Peru and Uganda. UNDP, New York. 

UNDP (2015b). Natural Resource Economic Analyses for the Ecosystem Based Adaptation (EbA) Project in Mount Elgon Ecosystem: Draft Report. Uganda, Ministry of Water and Environment.