Incenting the Nature of Cities: Using Financial Approaches to Support Green Infrastructure in Ontario

Written by Sustainable Prosperity & released through the Metcalf Foundation Green Prosperity Papers

This report provides the rationale for local governments to consider green infrastructure strategies and introduces six market-based tools that are used across Canada and the United States to support such strategies. These tools include stormwater user fees and fee discounts; stormwater credit trading; grants, rebates and installation financing; development charges; development incentives; and habitat compensation banks. The report also describes a pioneering strategy to integrate the value to municipalities of existing green infrastructure, into formal local government asset management systems.

It introduces fee, incentive, and other market-based programs that can support the expansion of green infrastructure in cities and neighbourhoods. It considers the potential barriers to implementing these and offers recommendations, to local and provincial governments on how, to encourage greater use of green infrastructure, on private and public property in southern Ontario municipalities.

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Click to view the Metcalf Green Prosperity Paper Series

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About the Project

The goal of this project is to shed light on the relationship between economic activity and the environment by exploring the linkages between changes in our natural capital and our measures of productivity generally, and through the construction of an environmentally adjusted measure of productivity specifically.

While it is now commonly accepted that economic activity and the state of our environment are linked, many economic measures still fail to incorporate the environment – both the things we draw from it and the pollution we release into it. By developing and calculating measures of productivity that include natural capital, Canada may be able to better understand these linkages. This, in turn, may lead to the identification of strategies that can help Canada become more efficient and innovative in the use and protection of natural capital, and thus more productive and more prosperous.

Using the forestry sector as a case study, this project aims to construct an environmentally adjusted measure of multifactor productivity. In doing so, we aim to add another layer of understanding to the environmental and economic performance of this sector. The proposed measure will have relevance to the Canadian economy as a whole.