To Finance Coastal Resilience, States Turn to Innovative Policies and PartnershipsCoastal wetlands—including tidal marshes, forested swamps, m...
Published on by Water Network Research, Official research team of The Water Network
Coastal wetlands—including tidal marshes, forested swamps, mangroves, and seagrasses—are among humankind’s most powerful natural allies. These ecosystems not only absorb and store large amounts of carbon but also protect communities from flooding and wildfires, provide habitat for commercially and recreationally important species, and filter pollutants and excess nutrients from the water. Yet these habitats are disappearing at alarming rates because of sea-level rise, erosion, and development. Further, communities seeking to protect and restore coastal wetlands have struggled to secure the funding needed to meet the scale of the challenge.
To help address these issues, the Blue Carbon Network—a Pew-hosted group that connects state agencies, practitioners, academic researchers, and nongovernmental organizations working on coastal conservation and climate initiatives—coordinated a webinar that highlighted innovative state-led programs and initiatives to finance coastal resilience projects. Experts from Maryland, Louisiana, and Duke University shared information about a variety of successful approaches. One example is emerging environmental markets, which assign monetary values to environmental benefits—such as cleaner air and water, or carbon emission reductions—that then can be bought, sold, or traded to encourage protection and underwrite conservation projects.
Maryland: Pay-for-success and market-based innovations
Maryland is leading the way in outcome-based financing through its 2022 Conservation Finance Act, which allocates funding for tools such as pay-for-success contracts through which governments pay for projects that deliver documented environmental improvements.
The blue water of an estuary flows along an embankment covered in green foliage. Low hills rise on the far shore.
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Rachel Lamb, a senior climate adviser with the Maryland Department of the Environment, said the state’s most successful program to date is the Clean Water Commerce Program, which pays entities for projects that verifiably and cost-effectively reduce nitrogen in waterways. Excess nitrogen in water can lead to harmful algal blooms, which deplete oxygen levels and harm aquatic life. Because many project sponsors, especially smaller nonprofits, may not have the up-front capital to fund such projects, the state encourages partnerships with private investors who provide initial funding, with the expectation that they will recoup their investment when the state pays for the success.
Maryland also is pioneering interstate cooperation by funding restoration projects in upstream states such as Pennsylvania that help to meet shared Chesapeake Bay ecological targets.
In addition, the state is exploring how to stack benefits—such as flood mitigation and biodiversity protection—in projects to attract more funding and to further increase the return on investment, Lamb said. The state is also considering greater use of revolving loan funds along with mechanisms such as environmental impact bonds.
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https://www.pew.org/en/research-and-analysis/articles/2025/09/17/to-finance-coastal-resilience-states-turn-to-innovative-policies-and-partnershipsTaxonomy
- Environment
- Coastal
- Finance and Markets
- Funding Partnerships
- protection
- Maryland, United States
- financing