Impact bonds as an instrument of environmental policy?

The frictions of framing in the preparation process of the Nutrient-EIB

Abstract

Impact bonds have recently been introduced as a policy instrument that is centered around pursuing economic productivity and social or environmental impacts simultaneously. So far, they have been carried out both in Finland and globally to solve social problems, but recently the model has also been experimented with within environmental policy. One example of this has been the Nutrient-EIB (environmental impact bond), which has been in preparation since 2017 to be implemented in Southwest Finland. In this article, we study how the experts who participated in planning the Nutrient-EIB framed the EIB in relation to how it would contribute to solving the environmental problem of nutrient loads causing eutrophication of the Baltic Sea. On the basis of expert interviews, we identify three frames, through which the EIB was seen in different ways according to the sociotechnical change it aims to achieve: the frame of applying the impact investing logic, the frame of challenging agri-environmental aid and the frame of extending experimentation culture. By analyzing how these frames relate to each other, we contribute to the discussions concerning how policy instruments such as EIBs may contribute to transformative policy.