Around the world, governments, businesses and local communities are increasingly choosing to invest in programs to improve the health of natural ecosystems rather than pay for costly industrial infrastructure to boost water quality and supplies, according to a new market analysis.

The number of such initiatives has doubled over the past four years, with a total investment of at least $8.2 billion, the report from the nonprofit research group Forest Trends found.

In Sweden, a local water authority found it was less expensive to pay for a program to plant blue mussel beds that filter nitrate pollution than to build a new treatment facility. In Kenya, a consortium of flower growers, ranchers and hotel owners near Lake Naivasha are paying for agricultural vouchers for small farmers who implement conservation measures that benefit the water body. And New York City developed a program to compensate farmers in the Catskills who reduce pollution into lakes and streams rather than spend billions of dollars on new wastewater treatment infrastructure.

"There has always been economic value in these natural mechanisms; now we're protecting and investing in them accordingly," said Genevieve Bennett, research analyst with the group's Ecosystem Marketplace unit and lead author on the report. "We are seeing so much variety and creativity and innovation on the ground."

Although the United States is home to the greatest number of these initiatives, 67, the greatest dollar investment, roughly $7.5 billion, was made in China.

Water scarcity and water pollution already cost that country more than 2 percent of its gross domestic product, according to the World Bank. In its latest five-year plan, Beijing gave "ecocompensation" programs a key role.

"Water insecurity poses probably the single biggest risk to the country's continued economic growth today, and the government has clearly decided that its ecological investments will pay off," the report states.

In the United States, compliance programs such as U.S. EPA's cleanup plan for the Chesapeake Bay, which allows for water quality trading, are a major investment driver. And in the West, some communities are using watershed investment programs as a way of mitigating potential future climate risks.

But such market-driven programs are not wholly embraced. Two environmental groups have brought a court challenge to the Chesapeake Bay's trading provision, contending that it is ripe for abuse, has little impact on water quality, and stands to leave low-income and minority communities with the most pollution (Greenwire, Oct. 3, 2012).