The Netherlands is one of the safest delta countries in the world. That safety is owed to dikes and flood defences, but also to a financial system that enables large-scale and long-term investments. As climate risks intensify, renewed attention is turning to that system. “We are facing decisions that will have effects for generations to come,” says Hielke van der Aa, sustainability analyst at the NWB Bank and researcher at the Resilient Delta initiative.

Van der Aa studies the financial aspects of climate adaptation in collaboration with TU Delft and Erasmus University scientists. Their collaboration began with a simple question: how solid is the financial foundation of Dutch water safety?

In a recent publication, van der Aa and Zac Taylor (TU Delft and Resilient Delta academic lead) analyze how the Netherlands has invested in protection against water for decades. Rather than focusing on the engineering behind dikes and barriers, they examine how the system is organized and financed.

A strong system

Van der Aa and Taylor describe how costs are shared between the national government, regional water authorities and citizens, and how investments are spread over long periods of time. That model has served the Netherlands well. Major projects could be realized without sudden increases in public charges. The strong creditworthiness of the Netherlands and its water authorities, internationally rated in the highest AAA category, underlines the stability of the system.

“We have built something that works very well,” says Van der Aa. “That’s a collective achievement. At the same time, climate change makes the task more complex. Investment needs are growing, and the interdependence between parties is becoming more pronounced.”

Where the tension lies

The researchers’ exploration shows that the Netherlands is well equipped both technically and financially. Access to capital is rarely the main bottleneck; governments and water authorities can generally borrow without much difficulty. The real tension lies in how costs are distributed across regions and generations.

Not every area is affected equally by flooding, land subsidence or sea-level rise. That makes the distribution of costs more sensitive, Van der Aa explains. “The strength of the Dutch model lies largely in solidarity. Climate change puts that solidarity under pressure. This calls for careful choices about how we continue to share risks and costs.”

Financial practice

For Van der Aa, financing water safety is not a theoretical exercise. As an analyst at the Nederlandse Waterschapsbank (NWB Bank), he sees how climate adaptation plays out in budgets and long-term planning. The bank finances a substantial share of the investments made by regional water authorities.

These investments are designed to last for decades, while the effects of climate change are becoming felt more quickly. “That makes climate adaptation finance an intergenerational issue,” he says. “What we decide now will affect generations to come.”

Working with science

This is precisely why Van der Aa, Taylor, and other scientists on the team seek each other out. Questions of financial sustainability touch on engineering, policy, finance and society at the same time. Within the Resilient Delta initiative, researchers and practice partners work together to better understand these connections. In this project, van der Aa is also mentored by Theo Chatzivasileiadis (TU Delft) and Siobhan Airey (Erasmus University Rotterdam).

“As a bank, we’re very close to implementation,” says Van der Aa. “Scientific research helps us take a step back and keep the bigger picture in view.”

Within Resilient Delta, Taylor works on building a knowledge ecosystem around climate adaptation finance, bringing together science, governments and financial institutions. “Climate adaptation scholars know that finance is essential to achieving our climate ambitions,” says Taylor. “Knowledge institutions help turn insights into action while learning alongside policymakers and practitioners. Through partnerships like this, we can accelerate impact and ensure these lessons endure for future generations”

An issue that affects everyone

Although their first joint publication focuses on water safety, Van der Aa and Taylor see the same questions arising in relation to other climate risks. Extreme heat and drought also involve investments, cost-sharing and long-term decisions.

“Ultimately, this is not just an issue for financial institutions,” says Van der Aa. “Decisions affect taxes, housing costs and the way we shape our living environment. That affects everyone.”

This collaboration shows that climate adaptation is also a complex financial challenge, and that key questions do not exist in isolation. “We hope people in both practice and academia recognize themselves in our work,” says Van der Aa. “And above all, that they want to think further with us.”