Environmental impact bonds as a transformative policy innovation: Frames and frictions in the construction process of the Nutrient-EIB

Olli Tiikkainen (Corresponding Author), Matti Pihlajamaa, Maria Åkerman

Research output: Contribution to journalArticleScientificpeer-review

Abstract

Impact bonds have emerged as a policy innovation with the potential to change public policies towards being more outcome-based and pre-emptive – and more effective in answering sustainability challenges. This financial instrument has been used for social problems and only recently for environmental issues. One example is the Nutrient-EIB (environmental impact bond) which is in preparation to be implemented in Southwest Finland. We study involved stakeholders’ framings of the Nutrient-EIB's potential for solving problems of eutrophication of the Baltic Sea and the lock-in situation of recycled fertiliser development. Based on stakeholder interviews, we identify three interpretative frames: applying the impact investing logic, challenging agri-environmental policy, and extending experimental policy-making. We recognise frictions between the frames regarding the required knowledge base and scale. We discuss how visions of transformative outcomes may challenge each other and what kinds of barriers transformative policy innovations may face.
Original languageEnglish
Pages (from-to)170-182
JournalEnvironmental Innovation and Societal Transitions
Volume45
DOIs
Publication statusPublished - Dec 2022
MoE publication typeA1 Journal article-refereed

Keywords

  • Environmental impact bond
  • Transformative policy innovation
  • Finance
  • Interpretive policy analysis
  • Environmental policy
  • Impact investing

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