a coastal city needs $200 million in flood protection. the traditional playbook: issue bonds, raise taxes, or wait for federal grants that may never come. there's another way.
natural infrastructure—wetlands, floodplains, mangroves, forests—can be funded by the people who benefit from it. operators who need reliable supply chains, property owners who avoid flood damage, utilities who depend on clean water. they're already paying for the consequences of not having this infrastructure. the question is whether they'll pay proactively (less) or reactively (much more).
tl;dr: map the hazard and who benefits from protection, price the service as avoided damage and avoided downtime, issue ensurance certificates to co-investors, collect premiums from beneficiaries, and verify outcomes with MRV. no bonds, no taxes, no grants required.
step 1: map the hazard and beneficiaries
start with the physical reality. what's the hazard? flooding, storm surge, wildfire, water scarcity, heat. then map everyone who tangibly benefits when that hazard is reduced:
| beneficiary type | what they gain | why they'd pay |
|---|---|---|
| port operators | reduced storm downtime | every day of closure costs millions |
| adjacent property owners | lower flood risk, better insurance rates | avoided damage + premium savings |
| logistics companies | supply chain reliability | shipping delays cost more than premiums |
| airlines | operational continuity | diversions and cancellations are expensive |
| utilities | cleaner source water, less treatment | wetlands filter for free |
| municipal governments | avoided emergency costs | disaster response far exceeds prevention |
this isn't abstract. a single major flood event can cost a mid-sized city $500M+. the wetland that prevents it might cost $50M to protect. the math works—you just need to distribute the cost across beneficiaries.
step 2: price the service
ecosystems provide services with real economic value. the key is translating ecological function into business terms:
flood attenuation: a healthy wetland stores X acre-feet of floodwater. during a 100-year event, that storage prevents Y dollars in damage to downstream properties. price the service as a percentage of avoided loss.
water filtration: wetlands remove sediment, nitrogen, and pathogens. calculate what the utility would pay for equivalent treatment capacity. that's the baseline value.
reliability premium: for operators, downtime has a price. if a port loses $5M/day during a flood event, and wetland restoration reduces expected annual downtime by 3 days, the annual value is $15M. a $1M annual premium is cheap insurance.
use external studies to anchor these valuations. the EPA, USACE, and academic literature have decades of benefit-cost analyses for nature-based projects. you're not inventing numbers—you're applying established methodologies.
step 3: structure the financing
once you've identified beneficiaries and priced the service, structure the capital stack:
ensurance certificates: issue certificates tied to the specific natural asset. buyers become co-investors in the infrastructure. proceeds fund protection, restoration, and stewardship. certificates can be structured with different risk/return profiles for different investor types.
beneficiary premiums: ongoing payments from those who benefit from the service. structure like insurance premiums—annual payments tied to the value received. these cover operational costs and provide returns to certificate holders.
performance tranches: layer the risk. senior tranches get paid first from premiums. junior tranches take more risk but capture upside if the asset outperforms. this lets conservative investors participate alongside those seeking higher returns.
the beauty: no public debt, no new taxes. the people who benefit from the infrastructure fund the infrastructure.
step 4: establish MRV and governance
trust but verify. tie payments and renewals to measurable outcomes:
ecological metrics: vegetative cover, water storage capacity, biomass, species presence. use remote sensing, on-ground monitoring, and third-party verification.
service delivery metrics: actual flood attenuation during events, water quality measurements, documented avoided damages.
transparent reporting: all data open to stakeholders and regulators. onchain verification creates an immutable record. no one has to trust—they can verify.
governance should include beneficiary representation. those paying premiums have a stake in how the asset is managed. structure decision rights accordingly.
step 5: communicate the value proposition
the framing matters. this isn't a tax or a fee—it's an investment in infrastructure that happens to be green instead of gray.
compare to alternatives: a traditional seawall costs $X and requires ongoing maintenance. a restored wetland costs $Y, provides co-benefits (recreation, fisheries, carbon), and maintains itself. show the lifecycle comparison.
lead with avoided costs: don't lead with environmental benefits. lead with "this saves you money." the CFO cares about the balance sheet. the environmental benefits are a bonus.
show the MRV evidence: data builds trust. when beneficiaries can see that the wetland stored 50,000 acre-feet during the last storm event, the value becomes tangible.
frequently asked questions
why would beneficiaries pay voluntarily?
because the alternative is more expensive. companies already pay for flood insurance, supply chain disruptions, and disaster recovery. proactive investment in natural infrastructure reduces all of those costs. it's not charity—it's rational self-interest.
what if the natural asset fails to perform?
structure payments as performance-based. if the wetland doesn't attenuate floods as projected, premiums adjust. this aligns incentives—asset managers are motivated to maintain ecological function because their revenue depends on it.
how is this different from conservation easements?
easements are typically funded by philanthropy or government and focus on restricting development. this model is funded by direct beneficiaries and focuses on active service delivery. the natural asset isn't just preserved—it's managed as working infrastructure.
can this work for wildfire?
yes. fuel breaks, managed forests, and watershed protection all have identifiable beneficiaries: utilities (reduced fire risk to transmission lines), insurers (lower payouts), property owners (lower premiums), and municipalities (avoided suppression costs). the structure is the same—map beneficiaries, price the service, issue certificates, collect premiums.
next steps
natural infrastructure is real infrastructure. it can be financed like infrastructure—through the people who benefit from its services. the model exists. the question is whether your region will adopt it proactively, or wait until the next disaster makes the cost of inaction undeniable.
explore how ensurance certificates work | talk to our team about structuring a project