The Economics of Investing in Green Solutions to Stormwater Management

New York, NY (September 22, 2013) — A recent Forbes article investigates the payback for private investment in new and retrofit green solutions to manage storm water. Moving from “gray” to “green” infrastructure, which may include roadside tree plantings, parks, green roofs, and other tools that replicate more natural hydrologic functions, can be more cost effective, but funding needs outweigh available government resources.

Green infrastructure photoThe article cites a NRDC report  (February 2013) that analyzed private financing mechanisms for 27 potential stormwater retrofits on commercial projects under high, medium, and low investment options. They found that the high investment option reduced the stormwater fee by the greatest amount but also incurred the highest retrofit costs.

Of the projects analyzed, all but two generated an Internal Rate of Return (IRR) for the property owner that exceeded 13%, and one case study showed a projected IRR as high as 132%. Learn more about green solutions to stormwater management.

Although there are challenges to creating a large and liquid market for private investment into stormwater benefits, including relatively high transaction costs, uncertainty regarding long-term trends for municipal stormwater fees and credits, and lack of available collateral, the article makes the case for private investment.

Ultimately, successful examples of private sector investment in stormwater retrofits are critically needed, as cities nationwide are seeking cost-effective alternatives that leverage private dollars to complement necessary public investments in stormwater infrastructure.

Read the full article: “Private Investment in Green Roofs, Roadside Plantings, and Parks, Oh My!

In related news, the New York Restoration Project cut the ribbon this week on a new flood-preventing garden that will absorb 150,000 gallons of water annually. NYRP equipped the Gil Hodges Community Garden with  high-performance stormwater infrastructure, including a bioswale in the nearby sidewalk (a street tree in an enlarged bed with native plants and a low curb), porous pavers, a rain garden, and flood-tolerant plants. More

Related Resources
Green Solutions to Stormwater Management
Watershed Forestry Resource Guide: Reducing Stormwater Runoff