U.S. Increases Support to Conserve Forests, Ease Climate Change

Farms and homes bordering the Monteverde Cloud Forest Reserve near Monteverde, Costa Rica, are shown shrouded in mist on World Environment Day in May 2007.

Farms and homes bordering the Monteverde Cloud Forest Reserve near Monteverde, Costa Rica, are shown shrouded in mist on World Environment Day in May 2007.

29 May 2014

The U.S. Agency for International Development (USAID) on May 28 announced its support for the Althelia Climate Fund to lend up to $133.8 million in commercial financing for forest conservation and sustainable land use.

Secretary of State John Kerry made the announcement via video message at the Carbon Expo in Cologne, Germany, USAID said in a news release the same day.

The financing will help remove 100 million tons of carbon — the equivalent of 18.5 million cars — from the atmosphere, USAID said. USAID will offer a new risk-sharing loan guarantee through its Development Credit Authority that will enable Althelia to finance hundreds of forest-based businesses in developing countries that rely on sustainably managed land use for their livelihoods. Althelia is the first private-sector fund dedicated to forest conservation at this scale.

“Over 1.5 billion people rely on forests to meet their day-to-day needs, and the majority of these are poor rural communities, including some 60 million indigenous people,” said USAID Administrator Rajiv Shah, according to the news release. “By creating incentives to better manage these forests, we provide a pathway out of extreme poverty for families who depend on forests while helping preserve critical ecosystems.”

Businesses involved in ecotourism and agroforestry, for example, will receive commercial loans under the program, allowing them to expand their operations. The income and employment they generate will discourage further deforestation while encouraging forest maintenance and rehabilitation, USAID said. And they will be eligible to earn carbon credits that can be sold on the voluntary carbon credit market using mechanisms based on the United Nations’ Reducing Emissions from Deforestation and Forest Degradation (REDD) initiative. Corporations and nonprofits buy the credits to compensate for their own carbon emissions, support philanthropy or invest in greener supply chains.

“This guarantee provided by USAID allows private capital to flow at scale toward financing sustainable land use models that drive livelihood improvements, ecosystem conservation and climate change mitigation,” said Christian del Valle, Althelia Climate Fund managing partner.

The Development Credit Authority uses partial credit guarantees to mobilize local financing in developing countries. The guarantee agreements encourage private lenders to extend financing to underserved borrowers in new sectors and regions, opening up local channels of financing and empowering local entrepreneurs. Loans supported by USAID guarantees have mobilized up to $3.1 billion in private, local funds to finance development, USAID said.


In other efforts to address climate change, USAID sponsored a four-day workshop in Elmina, Ghana, where more than 40 policymakers, researchers and practitioners gathered to discuss “West Africa Mangroves — A Key to Climate Change Adaptation and Mitigation.”

“In spite of their existing and potential uses for humanity, mangroves remain poorly understood,” said Bradley Wallach, USAID West Africa’s acting mission director, according to a May 22 USAID news release. “They are often marginalized in national climate change plans and frequently mismanaged, resulting in the rapid depletion of resources and benefits that they have provided for generations.”

Wallach said the USAID workshop highlighted the importance of the diverse mangrove benefits in the face of climate change.

Mangroves are a variety of trees and shrubs that grow along tropical or subtropical coastlines where slow-moving water allows sediments to accumulate. They have extensive root systems that protect the coast from erosion and storm damage. Their ecosystems also support the livelihoods of millions of people. Increasingly, they are recognized as highly efficient carbon sinks — places that remove carbon dioxide from the atmosphere, reducing the amount of greenhouse gas. Mangroves remove about five times more carbon per unit area than any other forest ecosystem, USAID said.

On average, 2 percent to 7 percent of the world’s mangroves and other coastal wetland carbon sinks are lost annually. Participants in the Ghana workshop identified practical options to more explicitly integrate mangrove ecosystems into national REDD strategies. They also identified gaps and opportunities in mangrove research.

The workshop focused on mangroves in Ghana, Liberia, Guinea, Sierra Leone and Côte d’Ivoire. It supported the Forest Convergence Plan of the Economic Community of West African States (ECOWAS).

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