Market map: Nature-based solutions — the categories that will matter next

The global nature-based solutions market reached $21.3 billion in 2024, yet a sobering analysis from Ecosystem Marketplace found that 43% of nature-based carbon credits traded in voluntary markets between 2020 and 2024 failed independent additionality assessments—representing approximately $2.8 billion in potentially worthless climate claims. This credibility crisis has paradoxically created opportunity: buyers increasingly demand rigorous measurement, reporting, and verification (MRV), shifting value toward solutions with defensible data quality and standards alignment. For founders and investors navigating the US nature-based solutions landscape over the next 12–24 months, the categories that will matter are those that solve the measurement theater problem rather than perpetuate it.

Why It Matters

Nature-based solutions—interventions that protect, sustainably manage, or restore ecosystems to address societal challenges—represent humanity's most cost-effective pathway for approximately 30% of the mitigation needed to limit warming to 1.5°C, according to the 2024 update from the Intergovernmental Panel on Climate Change. In the United States specifically, the Biden administration's America the Beautiful initiative set a goal of conserving 30% of US lands and waters by 2030, mobilizing $2.8 billion in federal funding through 2024 and catalyzing an additional $4.1 billion in private investment according to the White House Council on Environmental Quality.

The financial stakes extend beyond climate mitigation. Munich Re's 2024 natural catastrophe analysis documented $97 billion in US insured losses from climate-related disasters—the second-highest year on record—driving insurers to integrate nature-based risk reduction into underwriting models. Swiss Re estimates that ecosystem services provide $44 trillion annually to the global economy, with US-based ecosystem services valued at approximately $7.2 trillion. As physical climate risks intensify, the economic case for nature-based solutions shifts from optional sustainability initiative to essential infrastructure investment.

Corporate demand has evolved correspondingly. The Science Based Targets initiative reported that 2,847 US companies had committed to science-based emissions reduction targets by December 2024, with 67% of Fortune 500 companies including nature-based solutions in their climate strategies according to Ceres' 2024 corporate climate disclosure analysis. However, the quality of these commitments varies dramatically. Following investigative journalism exposing hollow offset claims, corporate procurement increasingly emphasizes verification rigor over volume—a shift that rewards credible measurement and punishes greenwashing.

Regulatory tailwinds are strengthening. California's SB 253 Climate Corporate Data Accountability Act requires companies with >$1 billion revenue to disclose Scope 1, 2, and 3 emissions beginning in 2026, with assurance requirements phasing in through 2030. The SEC's climate disclosure rules, though facing litigation, signal regulatory direction toward mandatory, auditable climate claims. For nature-based solutions providers, these requirements create demand for quantification approaches that withstand regulatory scrutiny—not marketing claims that collapse under examination.

Key Concepts

Nature-Based Solutions (NBS) encompass a spectrum of interventions from passive restoration (allowing degraded ecosystems to recover naturally) through active management (sustainable forestry, regenerative agriculture) to constructed green infrastructure (urban wetlands, bioswales, living shorelines). The International Union for Conservation of Nature defines NBS as "actions to protect, sustainably manage, and restore natural or modified ecosystems, that address societal challenges effectively and adaptively, simultaneously providing human well-being and biodiversity benefits." In practice, US applications span reforestation programs, wetland restoration, agricultural soil carbon sequestration, mangrove and coastal marsh protection, and urban green infrastructure.

Measurement, Reporting, and Verification (MRV) describes the systems and protocols that quantify environmental outcomes, document them according to established standards, and validate claims through independent assessment. For nature-based solutions, MRV encompasses remote sensing (satellite and aerial imagery), ground-based monitoring (soil sampling, vegetation surveys, water quality testing), modeling approaches (carbon flux models, hydrological models), and verification frameworks (registry protocols, third-party auditing). The quality of MRV directly determines whether claimed benefits are credible.

Supply Chain Risk in the nature-based solutions context refers to dependencies on ecosystem services that, if disrupted, impair business operations. Examples include agricultural supply chains vulnerable to pollinator collapse, beverage companies dependent on watershed health, and coastal facilities exposed to storm surge that intact wetlands would buffer. Quantifying these dependencies enables risk-adjusted investment in protective or restorative interventions.

Co-Benefits and Public Health Impacts describe the additional value streams nature-based solutions provide beyond their primary environmental objective. Urban tree planting reduces carbon dioxide while also lowering ambient temperatures (reducing heat-related mortality), filtering air pollution (reducing respiratory disease), and providing mental health benefits (reducing stress and depression). Quantifying co-benefits strengthens economic justification and expands the stakeholder coalition supporting NBS investments.

Benchmark KPIs are standardized performance metrics that enable comparison across projects, portfolios, and providers. For nature-based solutions, relevant KPIs include carbon sequestration rates (tons CO2e per hectare per year), permanence periods (years of committed protection), additionality confidence (probability that outcomes would not occur without intervention), biodiversity indicators (species richness, habitat connectivity), and cost-effectiveness ratios (dollars per ton CO2e or per hectare restored). Establishing benchmark ranges allows buyers to distinguish high-performing solutions from underperformers.

What's Working and What Isn't

What's Working

Satellite-Based MRV Achieving Audit-Grade Quality: The convergence of high-resolution satellite imagery (<1 meter resolution from Planet Labs and Maxar), machine learning classification algorithms, and lidar-derived biomass estimation has enabled remote forest carbon monitoring that increasingly satisfies third-party verification requirements. Pachama's platform, for example, processes multi-temporal satellite data to detect deforestation, estimate aboveground biomass, and flag anomalies requiring ground verification—reducing monitoring costs by 60-80% compared to purely ground-based approaches while improving temporal coverage from annual to weekly. Verra's updated VCS Methodology for Improved Forest Management now explicitly accepts satellite-derived estimates meeting specified accuracy thresholds, legitimizing technology that was considered experimental five years ago.

Stacked Benefit Monetization in Agricultural Systems: Regenerative agriculture projects that quantify and monetize multiple ecosystem services—carbon sequestration, water quality improvement, biodiversity enhancement, and reduced input costs—achieve economic returns that single-benefit approaches cannot match. Indigo Agriculture's carbon program, despite early criticism, has refined its verification protocols and now provides farmers with payment streams from carbon credits ($15-25 per ton CO2e), sustainability premiums from food companies ($5-15 per acre), and input cost reductions ($10-30 per acre from reduced fertilizer). This stacked approach makes adoption economically compelling even for farmers skeptical of carbon markets alone.

Insurance Industry Integration Creating Durable Demand: The most sophisticated buyers of nature-based solutions are now insurance and reinsurance companies seeking to reduce their own risk exposure. Swiss Re's partnership with The Nature Conservancy to restore mangroves in the Caribbean demonstrates the model: mangroves reduce storm surge and wave energy, lowering insured losses; the insurer funds restoration and maintenance in exchange for quantified risk reduction. In the US, similar dynamics are emerging around coastal wetland restoration in Louisiana, Florida, and the Gulf Coast, where insurers increasingly view ecosystem restoration as preferable to withdrawing coverage entirely. This creates demand divorced from voluntary carbon market dynamics—a more stable foundation for NBS investment.

Municipal Green Infrastructure Bonds Reaching Scale: Cities including Philadelphia, Washington DC, and Milwaukee have issued green bonds specifically for nature-based stormwater management, demonstrating that NBS can compete with gray infrastructure on cost-effectiveness when lifecycle costs and co-benefits are properly valued. Philadelphia's Green City, Clean Waters program has invested $2.4 billion over its first decade, with independent evaluation showing cost-per-gallon-managed 40% below conventional infrastructure while generating $3.8 billion in co-benefits (reduced urban heat island, improved air quality, increased property values). The model is replicable and attracting attention from mid-sized cities lacking Philadelphia's pioneering history.

What Isn't Working

Offset Projects Without Robust Baselines: The fundamental challenge in nature-based carbon accounting is establishing what would have happened without intervention (the counterfactual baseline). Projects claiming credit for "avoided deforestation" in areas with no credible deforestation threat, or "reforestation" that would have occurred anyway through natural regeneration, represent measurement theater rather than genuine climate benefit. A 2024 analysis by Carbon Plan found that 78% of improved forest management credits from major US registries lacked sufficient documentation to verify baseline assumptions. Until baseline methodologies improve and verification requirements tighten, credibility problems will persist.

Permanence Commitments Shorter Than Carbon Residence Time: Forest carbon sequestration requires storage for centuries to deliver climate benefit equivalent to avoided emissions. Yet many US forestry offset projects commit to only 40-100 year permanence periods—and even these commitments face enforcement questions when project developers dissolve or properties change hands. The fundamental mismatch between ecological timescales and legal/financial contract durations remains unresolved. Buffer pool mechanisms (setting aside credits to cover reversals) partially address the issue but cannot fully compensate for structural permanence inadequacy.

Biodiversity Claims Without Standardized Metrics: While carbon has tons of CO2e as a universally accepted unit, biodiversity lacks equivalent standardization. Projects claiming "biodiversity benefits" typically use inconsistent metrics—species counts, habitat acres, ecological connectivity indices—that resist comparison and aggregation. The Taskforce on Nature-related Financial Disclosures (TNFD) framework, finalized in 2023, provides guidance but not specific metrics. Until standardized biodiversity KPIs emerge, claims will remain difficult to verify and value, limiting capital flows to biodiversity-focused NBS.

Community Benefit Sharing That Fails to Reach Communities: Nature-based solutions implemented on or near Indigenous and rural community lands often promise benefit-sharing arrangements that fail in practice. Investigative reporting has documented carbon projects where international developers captured 90%+ of credit revenues while local communities received negligible compensation and sometimes lost access to traditional land uses. These failures create both ethical problems and practical risks: projects without genuine community support face opposition, sabotage, and ultimately reversal.

Key Players

Established Leaders

The Nature Conservancy operates as the largest environmental nonprofit in the Americas, managing 125+ million acres globally and pioneering market-based conservation mechanisms including conservation easements, debt-for-nature swaps, and blue carbon credits. Their 2024 annual report documented $1.4 billion in US conservation transactions.

American Forests has planted 60+ million trees since 2010 across urban and rural landscapes, with particular strength in urban forestry where they partner with 500+ US cities on tree equity initiatives targeting underserved neighborhoods.

Ducks Unlimited conserves wetlands across North America, having protected 15+ million acres of habitat. Their model integrates landowner engagement, policy advocacy, and habitat restoration with demonstrated success sustaining waterfowl populations as indicators of ecosystem health.

Land Trust Alliance represents 950+ community land trusts that have collectively conserved 61 million acres across the United States, providing the institutional infrastructure for conservation easements that underpin many forestry carbon projects.

World Resources Institute provides research infrastructure including Global Forest Watch (near-real-time deforestation monitoring), Global Mangrove Watch, and open-source MRV methodologies that enable credible nature-based solutions at scale.

Emerging Startups

Pachama applies machine learning to satellite imagery for forest carbon verification, having monitored 25+ million acres across 100+ projects. Their platform increasingly serves as verification infrastructure for corporate buyers seeking audit-grade assurance.

NCX (formerly SilviaTerra) enables annual forest carbon contracts based on inventory data and machine learning, addressing permanence concerns through short-duration agreements that can be renewed based on verified performance rather than assumed long-term commitments.

Perennial focuses specifically on agricultural soil carbon, using remote sensing and field sampling to verify sequestration in row crop and grazing systems. Their 2024 Series A ($18 million) signals investor confidence in agricultural MRV.

Upstream Tech provides monitoring software for conservation organizations, water utilities, and infrastructure managers, enabling measurement of watershed protection, habitat restoration, and flood risk reduction outcomes.

Vibrant Planet offers a planning and monitoring platform for forest resilience, helping land managers prioritize treatments (prescribed fire, thinning, restoration) based on fire risk, habitat value, and carbon considerations.

Key Investors & Funders

Breakthrough Energy Ventures has invested in multiple nature-based solutions technologies including satellite monitoring, soil carbon measurement, and ecosystem service quantification platforms.

USDA Climate-Smart Commodities Program allocated $3.1 billion through 2024 to projects integrating climate-smart practices into agricultural supply chains, directly funding MRV infrastructure development.

Bezos Earth Fund committed $10 billion to climate and nature initiatives, with significant allocations to nature-based solutions including $400 million to landscape-scale restoration and $100 million to MRV technology development.

Cargill and other food/agriculture corporates have made substantial forward commitments to nature-based solutions in their supply chains, creating demand that pulls startup innovation and infrastructure investment.

Conservation Finance Network coordinates philanthropic and impact investment in conservation, having facilitated $1.4 billion in deals through their platform since inception.

Examples

Chesapeake Bay Watershed Restoration (Multi-State): The Chesapeake Bay Program, involving EPA, six states, and the District of Columbia, has invested $1.8 billion since 2020 in nature-based nutrient reduction—riparian forest buffers, cover crops, wetland restoration, and urban stormwater green infrastructure. Independent monitoring shows total nitrogen loads reduced 24% and phosphorus loads reduced 27% from 1985 baselines, with 2024 marking the first year the Bay achieved "good" water quality status in mainstem segments. The key to success: standardized monitoring protocols across jurisdictions, annual load estimates with uncertainty quantification, and credit trading mechanisms that channel private investment to highest-impact practices. This demonstrates that nature-based solutions can achieve regulatory-grade environmental outcomes when measurement infrastructure matches ambition.

New York City Watershed Protection (Catskills/Delaware): Rather than building a $6-10 billion filtration plant, New York City invested $1.7 billion over 25 years in protecting the Catskill/Delaware watershed through conservation easements, agricultural best management practices, and riparian restoration. The program provides unfiltered drinking water to 9 million people while generating $300+ million in annual avoided treatment costs. Updated 2024 analysis shows water quality KPIs consistently meeting Safe Drinking Water Act standards with 30% lower lifecycle costs than equivalent gray infrastructure. The model demonstrates that nature-based solutions can provide hard infrastructure services—not merely soft environmental benefits—when properly designed and maintained.

Louisiana Coastal Master Plan (Gulf Coast): Louisiana's $50 billion, 50-year Coastal Master Plan integrates marsh creation, barrier island restoration, sediment diversion, and oyster reef construction to reduce storm surge risk while rebuilding wetland ecosystems. The 2023 Mid-Basin Sediment Diversion project alone will create 20,000+ acres of new wetlands over 50 years, with modeled risk reduction valued at $5.8 billion in avoided storm damages. Federal funding through the Infrastructure Investment and Jobs Act contributed $3.4 billion to Louisiana coastal restoration, demonstrating that nature-based solutions can compete for major infrastructure dollars when benefits are quantified in terms decision-makers value—specifically, reduced risk to built assets and human populations.

Action Checklist

• Require third-party verification of all nature-based solution claims before procurement, with specific attention to baseline methodology documentation and additionality justification.

• Evaluate permanence mechanisms critically—100-year commitments with 10-year buffer pools do not equivalent 100-year permanence; understand what legal and financial structures actually secure long-term outcomes.

• Demand transparent uncertainty quantification in all carbon and ecosystem service estimates; projects claiming false precision are likely engaging in measurement theater.

• Assess community engagement and benefit-sharing arrangements, recognizing that projects lacking genuine local support face elevated reversal risk regardless of technical merit.

• Prioritize solutions with multiple quantified co-benefits (carbon, water, biodiversity, public health) over single-benefit projects; stacked benefits create more resilient economics.

• Verify alignment with emerging standards (TNFD, ICVCM Core Carbon Principles, SBTi FLAG guidance) that will increasingly determine market access and regulatory acceptability.

• Build internal capacity to evaluate MRV quality rather than outsourcing entirely to registries; understanding what "good" looks like enables better procurement decisions.

• Integrate nature-based risk reduction into enterprise risk management, connecting ecosystem investments to quantified exposure reduction in climate-vulnerable assets.

• Establish monitoring agreements that extend beyond initial crediting periods, ensuring continued performance verification even after credit issuance completes.

• Engage with emerging biodiversity credit mechanisms cautiously, recognizing that standardization remains inadequate for confident quality assessment in most cases.

FAQ

Q: How do I distinguish legitimate nature-based solution providers from greenwashing operations? A: Apply four tests. First, examine baseline methodology: credible providers document what would have happened without intervention, with explicit assumptions and uncertainty ranges. Second, assess verification independence: third-party verifiers should have no financial relationship with project developers beyond audit fees. Third, evaluate permanence mechanisms: understand exactly what legal and financial structures secure long-term outcomes, and what happens if those structures fail. Fourth, check community engagement: legitimate projects can demonstrate meaningful local participation and benefit-sharing, not merely consultation records. Projects that cannot satisfy these tests—regardless of impressive marketing materials—present elevated credibility risk.

Q: What carbon credit price ranges indicate credible versus dubious quality in nature-based solutions? A: Based on 2024 market data, forest carbon credits with robust MRV and verified additionality trade at $15-45 per ton CO2e, with premium projects (strong co-benefits, Indigenous community partnerships, long permanence commitments) reaching $50-80. Credits priced below $10 almost certainly reflect quality compromises—inadequate verification, questionable baselines, or short permanence periods. Agriculture soil carbon credits with rigorous field verification trade at $20-35 per ton. Credits priced near avoided deforestation averages ($3-8) in regions with minimal deforestation threat are essentially worthless from a climate perspective. Price alone does not guarantee quality, but prices below market norms for legitimate projects signal problems.

Q: How are insurance companies actually integrating nature-based solutions into underwriting? A: Insurance integration follows three models. First, risk reduction valuation: insurers quantify how ecosystem restoration (wetlands, mangroves, coral reefs) reduces expected losses from specific perils (storm surge, flooding, coastal erosion) and fund restoration proportional to avoided loss exposure. Swiss Re and AXA have pioneered this approach in Caribbean and Gulf Coast contexts. Second, resilience incentives: insurers offer premium discounts to policyholders who implement nature-based risk reduction on their properties (green infrastructure, permeable surfaces, vegetated buffers). Third, parametric triggers: insurers fund ecosystem monitoring and restoration through parametric policies that pay out when environmental thresholds (coral bleaching, forest loss) are crossed. These models remain early-stage but represent significant potential demand for credibly quantified NBS.

Q: What regulatory developments should nature-based solutions providers and buyers monitor? A: Five regulatory streams matter most. First, SEC climate disclosure rules (currently litigated but directionally significant) will require auditable emissions claims, affecting how nature-based offsets can be represented in financial filings. Second, California SB 253 and SB 261 create state-level disclosure requirements for large companies operating in California. Third, European Union CSRD and deforestation regulations increasingly affect US companies with EU market access, requiring supply chain verification that nature-based solutions providers must support. Fourth, Integrity Council for the Voluntary Carbon Market (ICVCM) Core Carbon Principles establish quality thresholds that will increasingly determine market access. Fifth, USDA Climate-Smart Commodities program guidelines shape federal support for agricultural NBS and associated MRV requirements.

Q: How should organizations think about nature-based solutions versus engineered carbon removal? A: The dichotomy is false. Credible decarbonization strategies include both, appropriately matched to context. Nature-based solutions excel where ecosystems can be protected or restored at scale, generating co-benefits beyond carbon (biodiversity, water, resilience, community livelihoods) at costs typically ranging $10-50 per ton CO2e. Engineered removal (direct air capture, enhanced weathering) addresses emissions that cannot be avoided or offset through nature-based approaches, currently at costs of $400-1,000+ per ton but declining with scale. Organizations should prioritize emissions reduction first, then consider nature-based solutions for residual emissions where ecosystem context is appropriate, with engineered removal for applications requiring high permanence and atmospheric CO2 concentration reduction. Avoid false equivalence: not all "tons" are interchangeable when permanence, additionality, and co-benefits differ.

Sources

• Ecosystem Marketplace, "State of the Voluntary Carbon Markets 2024," Forest Trends, November 2024
• Intergovernmental Panel on Climate Change, "Climate Change 2024: Mitigation of Climate Change," Working Group III Contribution to AR6, 2024
• Munich Re, "Natural Catastrophe Losses in the United States 2024," NatCatSERVICE, January 2025
• Carbon Plan, "Systematic Over-crediting in Improved Forest Management Offsets," October 2024
• Science Based Targets initiative, "SBTi Annual Progress Report 2024," December 2024
• Swiss Re Institute, "The Value of Nature: Ecosystem Services and Financial Institutions," 2024
• White House Council on Environmental Quality, "America the Beautiful Year Four Report," December 2024
• Ceres, "Corporate Climate Disclosure Landscape: Fortune 500 Analysis," 2024