Trees are critical to environmental restoration. The benefits they provide – such as capturing carbon and limiting soil erosion – are invaluable. What CAN be given a price tag are the reforestation projects that are planting trees worldwide. These projects need financing – that is where Blue Forest Conservation comes in.
Blue Forest was founded in 2015 by graduate students at the University of California Berkeley’s Haas School of Business. These students recognized that financial barriers were the primary limitation for reforestation in California. This revelation led to the eventual development of not only Blue Forest as an organization, but their flagship financial product: the Forest Resilience Bond.
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Forest Resilience Bonds (FRB) allow private capital to play a role in public land management. The organization explains:
“Over $3.1 billion in sustainable investment capital remains undeployed due to a lack of investment opportunities in the conservation finance space, according to a report by Forest Trends and JP Morgan. As a result, conservation-focused investors have not had an opportunity to support these projects due to a lack of viable deals. The FRB is taking the critical steps of bridging the gap between investors and environmental interventions by developing the measurement technology, innovative contracting scheme, and financial structures that will allow private capital to fund land management, all while ensuring that public land remains public and mitigating wildfire risk.”
Blue Forest has outlined four goals they hope the implementation of the FRB can reach:
- Drive new financial and technical resources to forest collaboratives seeking to accomplish restoration projects.
- Create a highly replicable financing model that can accelerate the pace and scale of forest restoration country-wide.
- Restore watershed and forest health.
- Mitigate wildfire risk to forest ecosystems and surrounding rural communities.
This innovation, while still very new, has already been seeing success. Blue Forest highlights The Yuba Project as a key case study. The project covers 14,545 acres in Sierra County, CA, which includes Tahoe National Forest lands within the Yuba River Watershed.
In 2018, Blue Forest began a partnership with the Tahoe National Forest to launch this project. This was the first implementation of the organization’s FRB which now “provides $4 million in private capital from four investors to finance ecological restoration treatments across 15,000 acres of national forest.” These investors are being repaid at contracted rates by the State of California and the Yuba Water Agency as work is completed.
“With Forest Resilience Bond financing in place, the Tahoe National Forest is working with the National Forest Foundation to implement work on the ground through a Master Stewardship Agreement,” explained Blue Forest. “FRB financing has made it possible for Tahoe to accelerate work and complete projects in just four years instead of the projected 10 to 12 years.”
The Yuba Project provides just one example of how Blue Forest’s innovative financing mechanisms will be put to work. Public-private partnerships are an important part of conservation. Now, with a new financing door thrown open and ushering in the future, more private citizens will be able to put their money into investments that directly help the environment.
Kelvey Vander Hart is a native Iowan, a member of the American Conservation Coalition, and a communications specialist at Reason Foundation.
The views and opinions expressed are those of the author’s and do not necessarily reflect the official policy or position of C3.
