Innovative finance mechanisms to protect water resources in the Xin’an River Basin

Abstract

This brief shows how innovative financing can help cut agricultural pollution in the People's Republic of China’s Xin'an River Basin by plugging funding gaps for nature-based solutions that also mitigate against climate change. It highlights the importance of the basin that supplies drinking water to 10 million people and explains how insufficient financing is limiting the effectiveness of existing ecological compensation schemes. Offering policy recommendations to incentivize environmental protections, the brief details how two ADB-backed funds can be scaled up to support efforts by farmers and small businesses to make the watershed green, sustainable, and inclusive.