The challenge of nature loss

The degradation of biodiversity and ecosystems erodes economies by diminishing essential Ecosystem Services (ES). A decline in surface water availability alone could put nearly 15% of Europe’s economic output at risk. The Kunming-Montreal Global Biodiversity Framework (GBF) and EU Nature Restoration Law mandate restoration and private capital involvement. Current economic systems externalise nature loss, creating a need for Ecosystem Service Valuation (ESV) to clarify value creation and public-private benefit distribution.

Nature-based solutions as part of the answer

Nature-based Solutions (NbS) are transitioning from optional projects to instrumental methods for delivering resilience and restoration. While NbS represent around 25% of the most cost-effective climate actions, they remain marginalised in global finance. Scaling finance is hindered by fragmented methodologies and a lack of standardised metrics, making project aggregation and benchmarking difficult. ESV addresses this by evaluating direct and indirect contributions of ecosystems to human wellbeing, calculating Total Economic Value (TEV). Standardising these metrics reveals how NbS generate multifaceted socio-economic gains, providing a foundation to internalise nature in policy and financial decision-making.

The case studies – NbS in the UK and Spain

Two case studies illustrate ESV’s role in measuring structural shifts in ecosystem-service flows. In the UK (Avon Needs Trees), a 784-hectare reforestation initiative more than doubled the total annual ES value compared to the intensive baseline, generating significant gains in climate regulation, flood mitigation, and cultural services. In Spain (El Roble Farm), a 300-hectare transition to regenerative agriculture generated a net annual economic gain of over Int $1.26 million compared to conventional farming. This agricultural NbS increased provisioning value alongside regulating and cultural services. Both cases show that the largest value increases occur in regulating and cultural ecosystem services, benefiting distributed actors rather than being directly monetised by landowners.

The potential for public-private partnerships

The misalignment between where value is generated and where financial returns accrue necessitates Public-Private Partnerships (PPPs). PPPs must align distributed benefits with concentrated investment responsibilities to manage recurring operational expenditures (OPEX) and upfront capital expenditures (CAPEX). ESV informs three core dimensions of PPP design: capital design (who pays and how), value recognition (who benefits and how it is recognised), and governance alignment (what enabling conditions are needed). Early-stage ES assessments enable collaborative, mission-oriented investments rather than reactive de-risking.

Conclusions and recommendations

NbS deliver broad, cross-boundary benefits that are undervalued compared to conventional solutions. Decision-makers should incorporate full societal value assessments to reflect these distributed benefits. Standardised operational guidelines for NbS must be developed across sectors. Conventional financial appraisals should integrate ESV into cost-benefit analyses, using it to structure PPPs around capital design, benefit recognition, and governance alignment. Funding structures must match service types and beneficiary groups before structuring capital.