Forestry

Reforestation

Farmland restoration projects can reduce the area needed for farming operations by enhancing production efficiency while producing higher value-add products. This can lead to the increase of green cover while enhancing livelihoods of communities which depend on the land. Reforestation initiatives plant thousands of trees, often returning degraded land cleared for cattle or agriculture to forest. They are commonly seen as obvious carbon sinks. Carbon credits can typically make reforestation project bankable, however, the aim is to make the project bankable even without carbon credits.

Reforestation projects typically involve long time horizons with benefits only appearing in the later stages of the project. Sourcing capital for such ventures requires looking beyond the traditional sources of finance. Building a coalition of impact and commercial investors who can focus beyond carbon credits is essential. It also requires working with communities as the land is rarely uninhabited especially in developing countries. Structuring such projects requires working with local communities as well as investors seeking returns.

Agroforestry

Agroforestry has been one of the fastest growing segments of conservation projects. Transaction sizes have increased to several hundred million dollars with investors looking to make a profit out of corporate agroforestry. However, a significant part of the allure and returns are based on carbon credits. This has led to charges of greenwashing from a section of the conservation community with origination and certification of carbon credits in the focus.

In practice carbon credits are only a part of the spectrum of opportunities. Converting openly grown coffee to shade grown coffee by planting trees, using plant mulch/compost and biomaterials to reduce or eliminate chemical fertilisers and pesticides, moving from monocropping into growing multiple plants at the same time are other initiatives which can be pursued to make agriculture more in line with nature.

However, making this transition requires funding and knowledge transfer especially as a large part of population relies on agriculture for employment and food security. It is difficult for these communities to change traditional practices without significant external support.