Deforestation takes a toll on food security, clean water, and the livelihoods of local communities. While many companies are working on lowering their impact on the environment, would it make a difference if they were convinced that investing in restoration could help them in the long run?
It is a powerful idea for environmentalists, and a new initiative in this regard by the Conservation International (CI) and The Nature Conservancy (TNC) is proposing just that. The initiative is incubated by the Global Innovation Lab for Climate Finance. The organizations are reportedly working towards an innovative financing technique of persuading hydropower operators to pay for measurable ecosystem benefits provided by cloud forests. The framework would be forests within the plant’s catchment in places around Latin America. And, the initiative uses a ‘pay for success’ technique.
Justus Raepple, the deal lead at Nature vest, TNC’s impact investment division, stated that the return on investment (ROI) for reforestation would be costly, which is also projected by the preliminary research done by CI. The benefits of restoration would trickle down to dam operators in a few years, and the team is on a look-out for funding investors for starting off the restoration processes.
Meanwhile, Romas Garbaliauskas, senior legal advisor at CI stated that the financing method was the same model used to build toll roads, and added that it was the first it would be used for conservation purposes.
Hydropower reportedly satisfies considerable energy needs of Latin America. However, the generation can be compromised by variable water flows and sedimentation issues, and forest restoration could play an important role in this context. Garbaliauskas explained that restoring forests helped with sedimentation management, and also prolonged the life of the hydropower.
The assessment by the collaborators highlights that almost 200 dams around Latin America could benefit from restoring cloud forests. And, their vision includes restoring all kinds of forest ecosystems. The project would be a vanguard for placing a monetary value on green infrastructure.