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Public-Private Finance Initiative


Public-Private Finance Initiative

Conserving forests and ecosystems for the services they provide including regulating our climate and mitigating anthropogenic greenhouse gas emissions while also producing food, fiber and fuel for our burgeoning human population is one of the greatest challenges today. Furthermore, transforming land use to low emissions production systems is costly and requires substantial financing. Our Public-Private Finance Initiative works at this nexus and is strategically focused on creating public private architectures that increase the amount of capital flowing to land use practices that reduce emissions from deforestation and degradation, improve the productivity of agricultural and livestock systems, and enhance livelihoods of rural populations. We work with public and private sector partners to create innovative, integrated, and efficient financial architecture.

Innovative Finance

We see the potential to leverage public sector dollars to create and/or deploy financial and risk mitigation mechanisms to attract more private capital into REDD+ and agricultural production systems/value chains that conserve and/or restore forests or degraded lands. In the State of Acre, Brazil, we are assisting the State to best monetize ecosystem assets and deploy funds strategically to catalyze private sector investment in activities that reduce deforestation, thus supporting the State in achieving its low-emission development goals and emissions reductions targets.

Integrated Finance

We see a great opportunity to integrate forest conservation efforts with complementary efforts to transform commodity markets and supply chains towards sustainable production through mechanisms such as certification systems (e.g., global roundtables for beef, soy, palm oil and sugar). This will not only allow us to address one of the largest drivers of deforestation (agriculture) but we will also be able to tap into various large pools of capital (domestic agriculture credit/programs, etc.) to build an integrated financial framework that incentivizes producers/value chain actors to change their practices. In Colombia, we are developing ways to leverage substantial existing domestic agricultural financing and donor funding, including possible restructuring, to attract greater private sector investment into zero-deforestation production systems and value chains.

Efficient Finance

Costs to change production and the opportunity costs of conserving forests are high, and the process to obtain financing and/or certification is burdensome. To address these high costs and bottlenecks, we see an opportunity to develop linking mechanisms that will enable projects/farms to more easily access financing and become certified. This may be achieved most easily and efficiently through mechanisms designed at the jurisdictional rather than at the project level. We are working in Mato Grosso, Brazil with the Forests, Farms, and Finance Initiative to develop a zero-deforestation certification scheme and accompanying financing structures that will reward producers for conserving forests and also increasing yields.

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