Natural Assurance Scheme: A level playing field framework for Green-Grey infrastructure development

Abstract

The Natural Assurance Scheme (NAS) concept was introduced by NAIAD to give the risk-reduction service supplied by ecosystems the same standing in investment appraisal as a conventional engineered defence. The paper sets out the framework in full: how the assurance value of an ecosystem is defined and bounded, how it is quantified alongside the co-benefits that a green-grey intervention produces, and how the resulting evidence can be placed on a level playing field with grey alternatives when an infrastructure decision is taken.

It argues that the main obstacle to uptake is not a shortage of ecological evidence but the absence of a common accounting language. Risk reduction delivered by a catchment, a floodplain or an aquifer is real but is rarely expressed in the units, and over the time horizons, that infrastructure financiers and insurers use. By reframing ecosystem service delivery as an assurance service with identifiable beneficiaries, the framework opens the way to blended financing in which the parties who avoid losses contribute to the cost of the intervention that avoids them.

The paper draws on the nine NAIAD demonstration sites and was written jointly across the project's biophysical, socio-institutional and economic teams.