Ecosystem restoration – The crucial role of international financing cooperation
A major reason why international cooperation is needed to achieve landscape restoration goals is the sheer size of the investments required. Typical out-of-pocket restoration cost for forests in formal projects are of the order of US$1,000–3,000 per ha, exclusive of land costs, and depending on species, method, natural conditions and scale of operations.69 As a gross estimate, exclusive of land values, restoring 350 million ha of forest landscape over the next 15 years would therefore cost between US$350 billion and more than US$1 trillion, or US$23–67 billion per year. This scale of finance would be difficult to raise under any circumstances. It is even more challenging here because it might take decades for trees to grow and all the benefits to be realised. This scale of finance simply will not materialise in developing countries without institutional arrangements to equitably share costs and benefits among all stakeholders.
Forest conservation financing has the additional problem that, almost by definition, conservation implies that wood extraction is reduced from the “business-as-usual” rate – possibly to zero – and thus represents a financial cost rather than a benefit from the change in management. While some costs can be recouped thorough expanded ecotourism and support for green infrastructure from water companies and cities, most of the returns to forest conservation are not directly market-mediated. Cooperation is required to monetise payments for valuable ecosystem services, and especially for transfers across national borders, as all benefit but only some conserve.
Agricultural land restoration can cost even more per hectare than forest restoration, depending on the extent of the project and the infrastructure conveyed. However, the economic benefits tend to come much sooner than for pure forests, and keep coming annually. Better Climate, Better Growth recommended putting 150 million ha of degraded agricultural land into restoration by 2030, or about 12% of all degraded agricultural land.70 Even at a simple estimate of US$1,000 per ha, at the low end of the forest restoration project cost range, 150 million ha of agricultural restoration would require US$150 billion in funding for restoration costs in addition to the initial cost of the land itself.
Another reason why international cooperation is crucial is that risks are either very high or not well known. Once political and governance risks are minimised through political will and increased policy capacity, financial risks need to be addressed. Investing large sums in developing countries can be risky for a variety of reasons, but sectors involving smallholder farmers, indigenous peoples in forests, remote and degraded areas, and industries highly dependent on weather outcomes are especially risky. International cooperation is needed to pool risks across large regions and to channel concessional financial resources in a way that leverages large sums of private capital that would not otherwise be available, given the risks involved.
Source :The New climate economy
Authors : Christopher Delgado, Michael Wolosin, and Nigel Purvis
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