3Ps Cook Islands Pilot Project: Financing Nature as a Solution for Flood Mitigation and Water Quality

This project conducted a natural capital assessment that identified where riparian buffers (i.e., native trees/vegetation along streams) would be most effective for water quality and flood control, and how much a wastewater treatment plant could improve water quality, for the Muri Lagoon area. Key collaborators: Asian Development Bank (ADB); Cook Islands National Environment Service; Cook Islands Ministry of Finance and Economic Management. The project is funded by the Moore Foundation. This is a pilot project within the People, Planet, Prosperity project.

The Challenge

The Cook Islands is a nation of 15 islands, scattered over an exclusive economic zone in the South Pacific Ocean of 1.8 million square kilometers. The country is vulnerable to climate change and natural disasters, and its economy is largely driven by tourism. The Muri Lagoon on the eastern coast of Rarotonga (the largest island in the Southern group) attracts the most tourist revenue in the Cook Islands. However, there are serious issues with coastal flooding and wastewater pollution. 

The Solution

The Asian Development Bank (ADB) has been supporting the government and coastal communities with research to inform the design of nature-based solutions to mitigate flooding and water quality impacts. This project leveraged an opportunity to seek creative co-financing opportunities and ensure the values nature provides to both the local community and the private sector are factored into decisions.

The team conducted a “natural capital assessment” that identified where riparian buffers (i.e., native trees/vegetation along streams) would be most effective for water quality and flood control, and how much a wastewater treatment plant could improve water quality, for the Muri Lagoon area. The effort helped make the case for traditional Pacific Island ridge-to-reef land management, which aligned well with the project’s focus on integrating nature’s benefits to people into decisions. The analysis is also supporting the design and co-financing of future infrastructure (i.e., a new wastewater treatment plant). This project also surveyed both locals and tourists on their willingness to pay for reef fish abundance, water quality for recreation, and marine biodiversity, providing a scientific basis for innovative financing mechanisms such as a Payment for Ecosystem Services program that would generate funds to fairly compensate landowners or local organizations in watershed restoration efforts. The project funded Muri Environment Care to expand their restoration of riparian buffers around Muri lagoon, including along the Parengaru and Vai Te Renga Streams, which are known to discharge high levels of sediment into the lagoon during the wet season. 

Working with different groups within ADB (Economic Research and Development Impact Department; Water and Urban Development Sector; and Climate Change and Sustainable Development Department), this pilot project also identified entry points for incorporating natural capital assessments and economic valuation of ecosystem services into ADB’s loan process for urban and water projects. Capacity development was central to this project – workshops and collaborative work empowered local leaders on both the policy and technical sides to apply these approaches in their own ways. The Cook Islands’ partners will revisit and build on this work into the future.