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BARRIERS AND OBSTACLES TO
NATURAL INFRASTRUCTURE
IMPLEMENTATION
A Brief Review of Literature
In preparation for the Natural Infrastructure Workshop, April 17, 2015
Introduction:
Natural infrastructure, defined as a practice (e.g., stormwater BMP, ecosystem restoration, living
shoreline) that enhances, restores, or creates ecological functions in order to provide ecosystem
services for people (e.g., reduce flooding, improve water quality, or improve air quality), can be a cost
effective and ecologically productive means of managing stormwater runoff and other
environmental impacts associated with development while providing multiple benefits to
wildlife and people. However, in many instances natural infrastructure projects are not
developed even when they could be viable. The reasons for this can largely fall into one or
more of the following categories: financial, legal/policy, technical, cultural. This document is a
summary of some of the obstacles to natural infrastructure projects that were identified in a
review of literature. The obstacles and barrier discussed here-in are not necessarily specific to
New Jersey’s unique regulatory environment, and are not meant to be comprehensive. This
document is intended to serve as discussion-starter for a workshop on identifying and
overcoming barrier to natural infrastructure implementation in New Jersey.
Financial Barriers:
Incentives
The first financial barrier to natural infrastructure projects is simple: there must be a financial
incentive for property owners or managers to plan for an implement a natural infrastructure
project. If the property owner is not obligated to manage stormwater, flood risk, or other
environmental impacts associated with developing a piece of property, then no infrastructure
project – natural or “gray” will be developed to mitigate for these impacts.
In many states, an obligation to manage stormwater runoff is generated by the existence of
stormwater fees. However, in NJ municipalities and utilities cannot charge fees for stormwater
runoff. The lack of stormwater fees in NJ does not mean that property owners can completely
ignore the stormwater impacts of development. In fact, New Jersey has extensive stormwater
management rules that and all municipalities have a statutory obligation to develop
stormwater management plans and associated ordinances.
It is worth noting that incentives extend beyond financial payments to property owners.
Incentives are merely what motivate a decision maker to change behaviors, and the wide range
of effective incentives designed will vary depending upon the type of natural infrastructure
project, the stakeholder group, the ecological context (terrestrial, coastal, freshwater) and the
political context.
Data
Among the most commonly noted financial challenges for natural infrastructure projects is the
lack of accessible and sound cost data relating to its development, management, and
performance (Valderrama, et al., 2013) (World Resources Institute). This lack of data results
both from a failure to collect and distribute cost data and the inherent variability in cost across
a range of natural infrastructure projects. The technical requirements for any given form of
natural infrastructure, such as living shorelines, downspout disconnections, bioswales, etc., will
vary depending on local characteristics and ecosystem function. Without access to sound data
about the relative costs of natural infrastructure versus more-broadly-understood gray
infrastructure, proper owners and other public decision makers often choose to use gray
infrastructure (Restore America's Estuaries, 2014). Traditional gray infrastructure projects
designed to meet the same immediate goals, generally have standardized cost parameters and
performance standards associated with them. (For example, bulkhead costs are somewhat
standardized but the same cannot be said for living shorelines. (Restore America's Estuaries,
2014)) This standardized pricing facilitates the financing of major gray infrastructure projects.
Regular collection and distribution of cost data relating to natural infrastructure projects could
help property owners and lenders to understand what a reasonable present cost is and what
the future upkeep and maintenance costs might be.
Further complicating matters, natural infrastructure projects often provide ancillary health and
aesthetic benefits, recreational opportunities, and may be associated with increased property
values, although this value often accrues in the years after a project is developed as vegetation
matures and becomes more viable (Restore America's Estuaries, 2014). For this reason, these
benefits are often left out of financial calculations relating the benefits and viability of natural
infrastructure projects. These benefits are also often missing from benefit-cost analyses
because there is often insufficient data on the economic value of the multiple benefits
associated with natural infrastructure projects. For instance, there may be ample data on the
economic value of recreational fishing benefits from coastal restoration in the Gulf of Mexico,
but often policy makers are interested in data that is more applicable to local policy contexts
and ecological conditions.
Transaction Costs
Another oft-noted financial barrier is the transaction costs associated with natural
infrastructure projects. Many (but certainly not all) natural infrastructure projects are small and
are not necessarily standardized from one project to the next because each project must be
designed to meet local conditions and variables. This means that transaction costs can be quite
high, requiring specialized permits and technical assistance for each individual project. An
example of this would be the implementation of downspout disconnections, small rain gardens,
and bioswales. Aggregators, or entities that “bundle” green infrastructure projects and then
effectively handle transaction costs in bulk, can reduce those costs for the property owner.
Many questions remain about the legal and financial obligation impacts of aggregators,
however they are a growing presence in the solar energy sector and their business model could
potentially be parlayed into a model for natural infrastructure projects (Valderrama, et al.,
2013).
“Credits”
In some instances it is more economically and technically viable for a property owner to
develop natural infrastructure off-site. Having the ability to develop natural infrastructure
projects on another parcel under different ownership requires a system in place to ensure that
credit for developing the project goes to the correct entity. Regardless of a the presence of a
fee structure, a credit system that allows an entity to maintain compliance by developing
natural infrastructure off-site has been named as a potential solution in the literature
(Valderrama, et al., 2013). It must be noted that some environmental advocates are opposed to
the use of credits out of concern that they allow property owners to “buy” compliance or avoid
mitigating for environmental impacts in the same neighborhoods where they occur. The use of
off-site mitigation has the potential to raise environmental justice and equity concerns, which
can also raise the costs involved in utilizing such credits.
Risk and Payback Period
Finally, the long payback period of many forms of natural infrastructure is very problematic for
the purposes of securing financing from the private sector. Many natural infrastructure projects
take ten years or longer to pay for themselves even with a well-defined fee structure in place.
In financial terms, this long payback period introduces substantial risk for lenders, thus leading
to higher borrowing costs. (Valderrama, et al., 2013) This risk is compounded the relatively high
level of variability in natural infrastructure systems. As noted above, many forms of natural
infrastructure projects become more effective over time, thus requiring decreased levels of
periodic maintenance as they age. This is in direct contrast to gray infrastructure, which
generally deteriorates steadily over time. (Restore America's Estuaries, 2014) But, due to the
discounting of future benefits, from a financial perspective those future lower costs do not
necessarily compensate for the longer payback period.
Natural infrastructure projects also provide other amenities including, but not limited to: open
space, regional cooling effects that mitigate urban heat island effect, habitat for threatened and
endangered species, and more.
Lack of knowledge of funding sources
Often times, there exist established funding sources and financial mechanisms to cover the
planning, technical assistance, implementation and construction of gray infrastructure projects.
Further, these projects may already appear as a line item in municipal budgets. In contrast,
natural infrastructure may not already appear in municipal budgets and municipalities may
perceive that it is harder to fund than gray infrastructure project. Thus, lack of funding is often
a legitimate barrier to implementation (Rowe). However, municipalities often believe they need
more money to devote to stormwater management and green infrastructure but in reality, that
assumption may not be necessary in order to implement a plan. When the University of
Maryland EFC team performs audits, they often find that municipalities just need better
management to allocate funds to stormwater and green infrastructure (McCloskey). Therefore,
lack of funding, lack of information on a wider range of funding sources, and lack of knowledge
of how to manage and allocate funds are all funding-related barriers.
Legal/Policy Obstacles:
There is substantial overlap between the legal obstacles and the financial obstacles. For
example, just as the lack of long-term rate predictability impacts the financing of natural
infrastructure projects, similarly, it is not always clear that utilities have the authority to set
long-term rate schedules in a manner that might help to resolve the financial challenge.
As with the other categories of obstacles and barriers to natural infrastructure implementation,
the legal and policy issues addressed within the literature are broad, reflecting a wide range of
challenges that can serve as obstacles to the implementation of natural infrastructure projects.
They range from local ordinances that prohibit certain types of natural infrastructure to
questions of ownership and contractual relationships that can impact financing and
enforcement, to the laws that dictate what ratepayers can be required to pay for, to issues in
permitting. Legal barriers are often directly tied to other types of barriers; for example,
ownership questions can affect perceived financial risk.
Ownership
Legal questions about the rights of one party to develop and maintain natural infrastructure
projects on a piece of property can be a challenge. For example, if Party A enters into an
agreement to develop a natural infrastructure project on Party B’s property in exchange for
credit from a regulatory entity, how does Party A ensure that the infrastructure project will be
maintained in the future? This type of legal question can complicate financing arrangements as
lenders may perceive this as an uncertainty. Moreover, even when third party financing isn’t an
issue, the question of ownership and rights to maintain and access a natural infrastructure
project may cause some parties to hesitate to enter into such an agreement. The ability to
ensure on-going access for maintenance, monitoring, and protection is contingent upon being
able to enter into a legally-binding agreement. Otherwise, a change of ownership or even a
change of opinion could allow natural infrastructure project to be sold, paved or dismantled
(Valderrama, et al., 2013).
Anti-Natural Infrastructure Ordinances
Another legal issue in the literature is that of local land-use ordinances that either intentionally
or unintentionally prohibit natural infrastructure. For example, fire codes that require wide
streets, curb height requirements, or mosquito control ordinances may unintentionally prohibit
the use of natural infrastructure (United State Environmental Protection Agency, 2013).
Similarly, such laws can make “non-conforming” landscape features such as rain gardens or
bioswales all but impossible to develop. Without conducting an audit or other comprehensive
review of the impact of these rules on stormwater, many municipalities may unknowingly keep
codes and ordinances in place that reduce the likelihood that natural infrastructure will be
utilized.
More In-Depth Analysis
New Jersey Future published a detailed analysis of the legal and statutory barriers to green
infrastructure in New Jersey. That particular piece provides far more detail than can be
summarized here; however a short summary of the specific barriers that piece identified in New
Jersey are:
1. Poorly implemented Municipal Stormwater Management Plan adoption and review
2.
3.
4.
5.
6.
7.
process
Dysfunctional program for NJDEP Regional Stormwater Management Plans
No authorization to charge for stormwater discharge
Lack of state and local enforcement of the stormwater management rules
Limited regulatory jurisdiction over already-‐developed areas
Splintered or incomplete state-‐level design guidelines for GI
Lack of integration among local, regional and state governmental entities (Worstell,
2013)
Technical Obstacles:
The definition of natural infrastructure can be fairly expansive, including everything from forest
conservation and management to green roofs, to downspout disconnections, to streambank
restoration. As such, there is a broad range of technical obstacles that practitioners have
identified – many of them specific to a single type of natural infrastructure. While the evidence
is clear that many forms of natural infrastructure are effective, there is substantial variability in
its effectiveness, based on factors such as geographic and climatic variability, vegetation,
distance to infrastructure, etc. (Restore America's Estuaries, 2014). Models can help to address
some of this variability but models do not eliminate all uncertainty and they are resource
intensive to run (World Resources Institute). Because of this, it is not always clear how effective
a project will be before it is implemented.
Knowing What Will Work
Within the reviewed literature, detailed explanations of the technical challenges and barriers to
natural infrastructure centered primarily on larger scale projects like targeted forest
conservation and living shorelines. For example, targeted forest and natural area conservation
has been proven to be a cost effective approach to protecting water resources. Unfortunately,
while there are scientific models available to assist in the prioritization of parcels for
acquisition, many acquisitions are conducted in “haphazard” manner. Nonetheless, there are
publically available models such as the Conservation Priority Index (CPI), which can be used via
ArcGIS to help identify parcels whose protection or active management will yield the greatest
benefits in terms of water quality. The results are non-quantitative; however they offer a
qualitative assessment of which areas should be targeted. Unfortunately, the use of the CPI or
other parcel prioritization tools is limited by the technical expertise of those involved. For
example, using the CPI would require an intermediate GIS user approximately a week to enter
in all the necessary data and verify its quality (World Resources Institute).
Similarly, while living shorelines have a demonstrable history of effectiveness, they are
subjected to highly variable conditions that can impact their effectiveness, including but not
limited to: currents, wave force, wind, development impacts, non-native and invasive species
(Restore America's Estuaries, 2014).
Measuring Outcomes and Demonstrating Value
A related issue is the challenge of being able to assess, measure, and quantify the benefits accrued from
natural infrastructure projects. A standardized set of metrics and indicators might help practitioners to
determine the relative impact and value of different natural infrastructure projects within the region
(Schuster, 2014). Similarly, while ecosystem valuation studies have demonstrated that natural
infrastructure projects add value; in many instances there is insufficient data to show the actual value of
those ecosystem services. More robust valuation studies that demonstrate the actual value society
places on natural resources and their functions may help to inform the decision-making processes
inherent in the development of natural infrastructure projects (Wainger & Boyd, 2009).
Climate Change and Other Variables
Finally, a “universal” potential technical obstacle is climate change. While natural infrastructure
may serve to help communities adapt to the unavoidable impacts of climate change, it is also
the case that a changing climate may alter species composition and ecological function of some
ecosystems, which could lead to the need for more active management of natural
infrastructure projects. (WRI, page 33). Even normal climate variability can make planning for
some natural infrastructure projects a challenge.
Technical capacity
Another known barrier is lack of technical capacity of those planning projects as well as those
designing and constructing the natural infrastructure projects. For instance, a municipal or
county engineer may not have the required training to adequately prepare for implementing
natural infrastructure projects, and additional education may be required (Rowe).
Cultural Barriers
Overall, there is less discussion of cultural barriers to natural infrastructure development in the
literature reviewed.
The primary cultural factors noted were institutional inertia and concerns about health and
safety. Institutional inertia refers to the tendency of decision-making institutions to prefer to
engage in and approve of projects that are familiar, even when evidence suggests that an
alternative might be better. For example, one report points to the almost universal acceptance
of bulkheads by property owners and regulators, whereas living shorelines are still met with
skepticism in many areas. (Restore America's Estuaries, 2014)
Concerns about health safety often arise from concern that natural infrastructure is ineffective,
dangerous, or could detract from property values. In fact, many forms of natural infrastructure
improve property values since many types included increased vegetation. However, concerns
about the potential for vegetated areas to harbor rodents or other pests or even criminal
activity are not uncommon. Such concerns must be addressed in order to have widespread
social acceptance of and support for some types of natural infrastructure.
Conclusion
The barriers discussed above are intended to serve as a foundation for further discussion in a
workshop setting. For further information about any of the barriers discussed herein, please
visit any of the report cited.
References
McCloskey, B. (n.d.). Phone Call with Brent McCloskey, University of Maryland Environmental Finance
Center.
Restore America's Estuaries. (2014). Living Shorelines From Barriers to Opportunities DRAFT. Arlington,
VA: Restore America's Estuaries. Retrieved from
https://www.estuaries.org/images/LivingShorelines/Draft_Opportunities_Report/barriers%20in
to%20opportunities%20draft%20report%2011-3-14%20for%20web.pdf
Rowe, A. (n.d.). Municipal Green Infrastructure Needs Assessment. Retrieved from US EPA:
http://www.epa.gov/region02/njgiforum/pdf/03rowe.pdf
Schuster, E. (2014). A user’s guide for incorporating economics into the planning process for coastal
restoration projects- DRAFT.
United State Environmental Protection Agency. (2013). Green Infrastructure Opportunities and Barriers
in the Greater Los Angeles Region. USEPA. Retrieved from
http://water.epa.gov/infrastructure/greeninfrastructure/upload/Council_Watershed_Health_GI
_Report.pdf
Valderrama, A., Levine, L., Bloomgarden, E., Bayon, R., Wachowicz, K., Kaiser, C., . . . Hammer, R. (2013).
Creating Clean Water Cash Flows: Developing Private Markets for Green Stormwater
Infrastructure in Philadelphia. NRDC. Retrieved from
http://www.nrdc.org/water/stormwater/files/green-infrastructure-pa-report.pdf
Wainger, L. A., & Boyd, J. W. (2009). Valuing Ecosystem Services. Chapter 6 In: Ecosystem-Based
Management for the Oceans: Applying Resilience Thinking. (K. a. McLeod, Ed.) Island Press.
World Resources Institute. (n.d.). Natural Infrastructure Investing in Forested Landscapes for Source
Water Protection in the United States. World Resources Institute. Retrieved from
http://www.wri.org/sites/default/files/wri13_report_4c_naturalinfrastructure_v2.pdf
Worstell, C. (2013). Green Infrastructure in the State of New Jersey Statutory and Regulatory Barriers to
Green Infrastructure Implementation. Trenton: New Jersey Future. Retrieved from
http://www.njfuture.org/wp-content/uploads/2013/01/New-Jersey-Future-StatutoryRegulatory-Barriers-to-Green-Infrastructure-in-NJ.pdf