VALLEJO, Calif. January 3, 2018 – Did you know that 50 percent of California’s water supply, which is the equivalent of 7.5 times the volume of Shasta Lake, originates on national forests? This critical water source provides Californians with clean and abundant water for drinking, irrigation, energy, and recreation, yet decades of aggressive fire suppression have left many western forests to include California, overgrown and susceptible to wildfires of increasing frequency and severity.
These fires endanger lives, communities, and wildlife habitat and compromise both water and air quality, yet removing brush, shrubs, and trees can help return forests to a healthier state. Today, many of California’s national forests are in need of such restoration treatments to address the risk of severe fire, yet reasons, to include limitations on funding, have impeded implementation at the needed pace.
Recently the Forest Service announced a national cross-deputy Memorandum of Understanding with Blue Forest Conservation (BFC), a benefit company with a mission to apply innovations in finance to scale forest restoration across the Western U.S. Through this unique agreement that involves the Forest Service partnering with an investment firm, the Forest Service will explore how BFC’s Forest Resilience Bond (FRB) can promote stewardship and restoration activities on public and private lands. Partnerships like this enhance watershed benefits and accelerate restoration treatments by leveraging investments from the private sector, Forest Service, and downstream beneficiaries.
In California, “we look forward to accelerating restoration on California’s national forests by piloting the Forest Resilience Bond to fund projects aimed at mitigating catastrophic wildfires,” said Regional Forester Randy Moore of the U.S. Forest Service’s Pacific Southwest Region. “This partnership will improve forest health, support job growth in rural communities and provide us more opportunities to get wood from overly-dense forests, out to market,” said Moore.
Private investors are an unlikely, yet critical, ally for which the FRB provides a framework for the Forest Service to access capital to accelerate treatments and efficiently approach landscapes at scale. According to Zach Knight, managing partner of BFC, “There is a lot of interest from investors to fund projects that benefit the environment and local communities. At the same time, there is a demonstrated need for capital if we hope to reach our conservation goals. The Forest Resilience Bond is designed to help bridge that gap by working with both the Forest Service and investors to accelerate investment in restoration. We’re excited to partner with the Forest Service in California to pilot the Forest Resilience Bond for the first time at multiple sites on national public lands.”
By allowing utilities, state agencies, and other beneficiaries of restoration work to share the costs of treatments only after the benefits of restoration have materialized, the FRB shifts risks to investors, which allows more beneficiaries to participate as partners, thereby bringing in more matching funds for the agency. Investor returns in the FRB are directly tied to the success of the restoration treatments and the ecological benefits that they yield.
This innovative public-private partnership strategy will assist in connecting urban and rural landscapes and promoting environmental and economic resilience across California’s national public lands.