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Investing in green infrastructure

In a nutshell

Green infrastructure is a catalyst to economic growth. It is usually cheaper than traditional grey infrastructure, creates sustainable jobs and brings great returns on investments.

In practice

Investing in green infrastructure does not just protect natural capital. It is a big step towards the smart, sustainable and inclusive growth which is one of the EU's priority objectives.

  • It contributes to climate change mitigation and adaptation;
  • it reduces resource consumption by lowering energy use or increasing available water supply,
  • it attracts new investments or new businesses to an area, and inspires new business models;
  • it saves costs arising from negative environmental effects and brings health benefits, including through disaster prevention and mitigation (floods, droughts, forest fires, heat waves in urban areas, avalanches and landslides in rural areas,...).

Funding for Green Infrastructure

Member States can support Green Infrastructure through programs integrated into their development strategies. Here are some of the co-financing opportunities currently available:

The new multi-annual financial framework for the period 2014-2020 also proposes enlarged financing possibilities for green infrastructure projects.

Natural Capital Financing Facility (NCFF)

The Commission and the European Investment Bank (EIB) have established a Natural Capital Financing Facility. The NCFF will finance investments in natural capital projects, including in green infrastructure, which generate revenues or save costs and contribute to nature, biodiversity and climate change adaptation objectives. The NCFF is open to public and private entities, where appropriate cooperating in partnerships. Investments could for example focus on ecosystem restoration projects as insurance against floods or draughts or to improve water quality.

Green infrastructure and smart growth

In order to respond to the economic and financial crisis, we must deliver on the 3 mutually reinforcing objectives of the Europe 2020 Strategy and achieve smart, sustainable and inclusive growth. The way ahead has to include significant innovation. Global demand for environmental technologies, eco-friendly products and services and sustainable design ideas is expected to gather speed. The global market is currently estimated at €1.15 trillion a year. It could reach €2 trillion a year by 2020. To seize this opportunity, EU Member States and regions need to invest more in the development of research and innovation and entrepreneurial capacity in areas such as sustainable energy, ecosystem services and eco-innovation. Success will be largely determined by decisions made at local and regional levels. Read our practical guide on connecting smart and sustainable growth (November 2012).

Private sector investments

Investing in green infrastructure can bring great returns for the private sector too. Green infrastructure can be used by developers to increase land value or to protect assets from the impact of climate change given the carbon storage, erosion and flood control services of many ecosystems.

A 2014 study on the economic and social benefits of environmental protection looked at the economic impacts of 363 floods recorded across all EU Member States, with total damages estimated at €150 billion. The study showed that, while the cost per flood was €360 million, investing in flood protection typically returns benefits 6-8 times the costs, with green infrastructure projects potentially delivering significant environmental benefits as well as cost savings. (Read the study or access specific data on floods in its annex).

Green infrastructure also provides great financing opportunities linked to innovation (such as innovative planning approaches, the design of urban elements enhancing biodiversity, technologies enhancing ecosystem services...).

Further information

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