September 21, 2022
Ontario’s Greenbelt generates a number of crucial ecosystem services that support the prosperity of Canada’s most densely populated region. Established in 2005, the Greenbelt was initially designed to protect the ecology and hydrology of one of Canada’s fastest growing regions. The Greenbelt was expanded in 2017 to include 21 Urban River Valleys and now stretches more than 8,000 km2. It is home to 78 species at risk, hundreds of kilometers of recreational trails, national and provincial parks, and some of the country’s highest value forests and farmlands.
Ecosystem services generated by protected areas in the Greenbelt are estimated at $3.2 billion annually. Located near the most densely populated area of Canada, the Greenbelt supports the health of millions of Canadians by improving air quality and providing greater access to nature and recreation opportunities. Access to nature and outdoor recreation was especially valuable during the pandemic as a way of maintaining both physical and mental health. In addition, the Greenbelt protects critical wildlife habitat, reduces urban flood risks, and the carbon sequestered by its forests is equivalent to the annual carbon emissions of more than 36,000 cars.
Despite these benefits, urban sprawl is a constant threat to the Greenbelt. The proposed Highway 413 would pass right through the Greenbelt, impacting wetlands and agricultural land. In 2021 York Regional Council changed the land designation of 1400 hectares from agriculture to rural, opening these lands for future development. Minister's zoning orders have also been used by the Municipal Affairs Minister to permit land use change in ecologically sensitive areas, including provincially significant wetlands. These recent changes follow the common pattern of land use change in the Greenbelt: natural areas are cleared for agricultural lands, which are in turn developed into new subdivisions.
Without greater investments in nature conservation, the encroachment of urban sprawl will likely continue. To date, most conservation funding comes from public money or philanthropy, which has proven insufficient in every country across the world. Globally, the annual funding gap for protecting biodiversity is estimated at US$700 billion, with a gap of US$15-20 billion identified for Canadian ecosystems. It is clear that we must find new, innovative ways to invest in nature to protect our valuable natural spaces.
Innovative financial models hold real potential to “put more money on the table” for nature conservation in the Greenbelt. Novel finance mechanisms could entice participation from a variety of investors and stakeholders, including financial institutions, developers, municipalities, conservation authorities, private investors, Indigenous communities, and private landowners.
The effectiveness of each finance instrument depends on the objectives, site characteristics, and stakeholders involved in a project. The Greenbelt would most benefit from mechanisms that leverage its close proximity to surrounding urban areas in Southern Ontario. Here we identify three key conservation finance mechanisms with a high potential to accelerate investments in Ontario’s Greenbelt:
1) Recreation bonds are a type of green bond that can be used to create or upgrade local infrastructure to attract more visitors and reduce the impact of these visitors on crucial natural systems. Investments in these types of vehicles are typically repaid from the additional revenues that are generated by increasing the number and type of annual visitors.
2) Insurance products represent significant opportunities for municipalities and private landowners to invest in conservation and restoration activities which mitigate damages from the growing number of natural disasters. Cost savings generated by a reduction in insured damages can then be passed on to policyholders through lower premiums.
3) Revolving funds have the benefit of packaging several small regional projects together to attract larger investors.
The Smart Prosperity Institute and The Greenbelt Foundation are working together to develop a conservation finance blueprint for the Greenbelt. This blueprint will be the first of its kind in Canada, representing a strategy for how to build conservation finance projects. It will help identify key opportunities and value streams in the Greenbelt as well as guide practitioners in selecting appropriate finance instruments to support project goals. This work will help accelerate investment in nature conservation in the Greenbelt and can be applied to other conservation projects throughout the world.
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