Fighting Fire with Finance: Introduction to the Forest Resilience Bond

In an era of intensifying climate change, devastating wildfires, and water scarcity, climate resilience has never been more critical to our survival. Yet overgrown forests plague the Western U.S., increasing fire severity and carbon emissions while threatening water supplies, communities, lives, and habitat. With government and philanthropic funding falling short, Blue Forest Conservation is developing the Forest Resilience Bond, a financing vehicle that catalyzes private capital to invest in forest health. Through a collaborative and innovative approach, the Forest Resilience Bond will leverage untapped private investment to accelerate forest restoration while generating social, environmental, and economic impact.

The quality of our life depends on the forest and forest is not healthy we need to fix it we’ve neglected maintaining this green infrastructure for too many decades this problem is too big for our state agencies to follow and frankly if they shouldn’t follow along so there have a value to doing the right thing we are currently developing the parcel and bond and

Investment vehicle that allows private investors to fund forest restoration success for us is essentially healthy arts and providing a return to our investors this sites called the southern sierra critical zone observatory it’s our most intensive research site for understanding how forest water and climate interact there’s more trees in the forest now than can

Be sustained by the amount of water that comes in as precipitation so thinning the forest to a sustainable density is really a goal that we need to strike a dense forest is more likely to have high intensity fire munich burns the whole forest the importance of restoring the forest is to reduce the risk of wildfire the side benefit is that that enhances the amount

Of water that runs off into electric utilities water utility of the 20 million acres that the forest service manages here in california between six and nine million acres are in need of some kind of treatment we’ve had the longer fire season it costs more and more to fight these really strange fires though fire suppression needs to be 16% of our budget and last

Year it surpassed half of our budget if we don’t start protecting our force now our natural resources our communities our water resources and utilities are all at risk the amount of money in capital in in the investment community dwarfs the budgets of our federal agencies so if we can figure out a way to tap into that private investment money we can have a hugely

Meaningful impact in the protection of our natural resources so our job at blue forest is to create that investment vehicle the benefits of forest restoration are actually pretty well understood and proven what the partisans bond does is create a new way to fund frustrating work investors in a return based on the impacts of forest restoration and beneficiaries such

As the forest service utilities and even texas state governments will repay investors over time for instance after completing a restoration project there may be more water available for the utility and the utility is going to make a payment based on some part of what that’s worth to them so learning how to speak to the forest service speak to the utilities work with

Academics and policymakers that’s the innovative contracting scheme that’s going to allow the forest resilience pond to address some of these issues this is a tall order and to have a few mbas show up in your office and talk about having a new approach to bars frustration it could sound a bit crazy but not only does this offer positive social and environmental

Impacts we’re also designing this to offer a market rate return i think bringing private sector business opportunities to manage forests is really the way of the future we care about our water we need to care about our forests and leverage private capital to protect our natural resources

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Fighting Fire with Finance: Introduction to the Forest Resilience Bond By Leigh Madeira