Madrid — Growing a Metropolitan Forest

Testing innovative approaches to generating, capturing, and sharing economic, financial, and social value generated by nature-based solutions

Place: Madrid
System Type: City
Challenge: Growing a metropolitan forest
Partner(s): Madrid City Council, Universidad Politécnica de Madrid, Climate-KIC, Dark Matter Labs

75 kilometres—that’s the length of the proposed forest ring that should soon encircle the City of Madrid, connecting existing parks with new forests and green spaces across 2,300 hectares. El Bosque Metropolitano is Madrid’s attempt to not only address increasingly pressing environmental problems—such as air pollution, heat island effects, and desertification—but also change the cultural relationship between people and nature.

The Promise of Nature-Based Solutions

Urban forests are an example of a category of climate change interventions called nature-based solutions. The International Union for the Conservation of Nature defines these as “actions to address societal challenges through the protection, sustainable management, and restoration of ecosystems, benefiting both biodiversity and human well-being.”

The environmental and social benefits of urban forests are immense. They provide shade, regulate temperature, filter air and water, sequester carbon, maintain soil health, reduce rainwater run-off, dampen street noise, and enrich biodiversity. They also improve mental and physical well-being, mitigate social inequality, and create gathering spaces for communities.

Many of these benefits translate directly into economic gains. City councils can reduce expenditures for water purification and infrastructure maintenance. Building operators pay less for cooling. Healthcare providers save on costs for treating heat strokes, respiratory diseases, and mental illness. Employers enjoy productivity gains from their workforce. And restaurants and hotels can take advantage of an influx of tourists.

In Melbourne, for instance, the city estimates that the 70’000 trees it owns are worth approx. €420 million, or €6,000 each; and in New York City, each $1 invested in tree planting and care returns $5.60 in economic value.

It’s no surprise, then, that Madrid isn’t the only city aiming to grow an urban forest. By 2030, Singapore, Milan, and Sydney want to plant one, three, and five million trees, respectively. Meanwhile, Melbourne has committed to increasing tree canopy cover from 22% to 40% by 2040, and London is aiming to become the world’s first National Park City.

Overcoming Structural Challenges

However, a number of deep-seated structural issues are inhibiting many cities from making meaningful progress toward their urban forest ambitions.

One set of problems relates to the socio-cultural relationship we have with trees—they are often seen as a nuisance, standing in the way of pavement, causing root heave, leaving tree sap on cars, and presenting a health risk to pedestrians. Another set of issues relates to the way the public sector allocates budgets and accounts for the value of its trees, and to our inability to capture the positive externalities that trees generate for a wide range of beneficiaries.

If we want to reap the full benefits of nature-based solutions, we need to start shifting cultural behaviours toward urban vegetation and form new stakeholder relationships through agreements and value-sharing transactions. We also need to move away from seeing trees as isolated entities toward appreciating them as a connected web of co-habitants that aggregate into an enormously useful civic infrastructure. And we need to find new ways of pooling the necessary financial resources to maintain a thriving green infrastructure, develop new practices to care for and maintain urban ecosystems, and monitor and evaluate the environmental, health, and social impacts driving urban afforestation targets.

Pioneering Urban Forests in Madrid

This is exactly what the TransCap partners will do in Madrid. By leveraging the pioneering work on Trees as Infrastructure by Dark Matter Labs, we will build a coalition of stakeholders committed to growing and maintaining green infrastructure, including city government, landowners, gardeners, beneficiaries, investors, and the natural ecosystem itself.

If you want to learn more, contact Thomas Osdoba at EIT Climate-KIC or Joost Beunderman at Dark Matter Labs.


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Dominic Hofstetter, Space Building Lead

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What We Do

The TransCap Initiative is a collaborative space for developing, demonstrating, and scaling systemic investing in the places that matter most for human prosperity—such as cities, landscapes, and coastal zones—as well as in value chains and other real-economy systems.

We apply systems thinking, human-centred design, and the principles of mission-driven innovation to explore how financial capital can catalyse the transformation of systems in service of a low-carbon, climate-resilient, just, and inclusive future.

Our mission involves developing a knowledge and innovation base, testing novel concepts and approaches, and building a community of practice. In doing so, we recognise the complex adaptive nature of human and natural systems and the fundamental uncertainty that governs their evolution, and we thus emphasise the need for collaboration, experimentation, and learning.

The places and value chains we intend to transform act as centres of gravity for our work. In each of these systems, we will work with challenge owners, communities, innovators, investors, and other stakeholders to design, structure, and finance strategic investment portfolios nested within a broader systems intervention approach.

Who We Are

The TransCap Initiative convenes a diverse community of partners from the private, public, civic, academic, and philanthropic spheres. Many of our community members are world-leading thinkers and doers in the fields of systems innovation, sustainable finance, public policy, social innovation, and sustainability research. It is a dynamic community, open to anyone committed to our cause and values.

The TransCap Initiative was initiated in 2019 by EIT Climate-KIC with support from the European Institute of Innovation and Technology (EIT).

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Dominic Hofstetter, Space Building Lead