While fuel reduction can play an important role in limiting the severity of wildfire, lack of funding often hinders forest management efforts.
The Upper Mokelumne River Watershed Authority (UMRWA), a joint powers authority comprised of Alpine, Amador and Calaveras counties and six water districts, recently initiated a novel funding approach to improve forest resilience to wildfire and safeguard communities and water resources.
“As it enters its fifth year developing and implementing forest health projects on the Stanislaus and El Dorado national forests, the UMRWA is initiating work with conservation finance nonprofit Blue Forest Conservation on development of a Forest Resilience Bond (FRB),” a press release from UMRWA reads.
Blue Forest’s FRB is a financing tool that aims to engage private funding sources to pay the up-front costs of forest management, with investors recouping their costs from the beneficiaries of the restoration work, such as the U.S. Forest Service, water and electric utilities and state governments, which make cost-share and pay-for-success payments for up to ten years based on the project’s success.
“The FRB seeks to overcome the funding gap for forest restoration, not through increases in public or philanthropic sources, but by allowing private capital to play a role in supporting public land management,” Blue Forest’s website reads. “The FRB seeks to turn a funding crisis into a financing opportunity by creating a scalable investment vehicle that allows private investors to support forest and watershed health while earning competitive returns.”
According to Blue Forest, the FRB can bridge the gap between investors and environmental interventions by providing the necessary measurement technology, innovative contracting scheme and financial structures.
The U.S. Forest Service estimates that 6 to 9 million acres of the total 20 million acres of land it manages in California is in need of treatment.
“The scale of the problem is so large that we need to employ multiple paths to get this work done,” UMRWA Board President John Coleman said. “UMRWA and Blue Forest see the development of an FRB as an important future funding mechanism to make our forest healthier and our communities safer.”
Planned project activities will focus on thinning overgrown forests in the Stanislaus and El Dorado national forests. Particular attention will be paid to areas along roadways, where wildfires are most likely to begin. Meadow restoration to improve water quantity and quality will likely be a part of future projects.
“Blue Forest is thrilled to collaborate with UMRWA. Ecological forest restoration can reduce the risk of large damaging wildfires to communities and forests while protecting water resources, air quality, private property, insurance, and avoiding carbon emissions, in short, saving all members of the community money,” said Nick Wobbrock, co-founder and COO of Blue Forest. “Financial instruments, like the FRB, that enable investment in natural infrastructure are key to building landscape-scale resilience in the face of unnaturally devastating wildfires and climate change.”
Currently, UMRWA’s forest management projects are financed primarily by state and federal grants.
“Over 4,000 acres of overgrown forests have been treated or under contract for completion since UMRWA entered into a Master Stewardship Agreement with the U.S. Forest Service in 2016,” the release reads. “Earlier this year, UMRWA initiated a two-phased Forest Projects Plan to prioritize projects and complete permitting for a large area of the Mokelumne River watershed. UMRWA hopes to have up to 50,000 acres or more permitted within two years at the completion of the second phase of this effort. The FRB would fund first-phase projects which could be implemented as early as 2022.”
Blue Forest developed the FRB in partnership with the World Resources Institute.
“Blue Forest’s work with UMRWA will build on its success with Yuba Water Agency where one FRB has been at work since 2018 protecting 15,000 acres on the Tahoe National Forest,” the release reads. “A second larger bond is currently in development on the Tahoe that will address an additional 30,000 acres.”