Restoration bonds: A catalyst to restore ecosystem services in agricultural landscapes from the latest WRI brief "Revaluing Ecosystems: Pathways For Scaling up the Inclusion of Ecosystem Value in Decision Making"
These services are often treated as though they have no value, with ecosystems too frequently managed for short-term gain at the expense of broader, longer-term societal benefits. There is an increasing array of tools to evaluate the tradeoffs associated with these developments, as well as a growing body of ecosystem service assessments which highlight the changes in value. Efforts to incorporate ecosystem values in decision making are growing – through partnerships, in government, and in the private sector.
This issue brief highlights barriers, opportunities, and pathways to broader consideration of ecosystem services in decision making. The idea for “restoration bonds” emerged from a search for approaches that could address the root causes of land degradation and help smallholder farmers overcome the primary barriers to the adoption of more sustainable farming practices.
Restoration bonds build on the experience gained to date with innovative financing instruments such as”green bonds”, which link the issuance a bond to environmentally friendly investments. Markets for green bonds are reportedly booming; in 2012 some $3 billion of green bonds were sold, and the market is projected to account for $50 billion in investment by the end of 2014. Governments or financial institutions could issue restoration bonds to serve three objectives:
1. Provide a financial return for investors that accounts for major risks to both investors and farmers.
2. Contribute to environmental sustainability objectives by restoring ecosystem services and increasing resilience of agricultural production by smallholder farmers in the face of climate change.
3. Support social and economic goals by providing a means for farmers to shift toward more secure and sustainable livelihoods and higher incomes.
The authors claim ecological restoration is profitable, therefore for scaling up purposes, it should be attractive for investment . These ideas represent complementary pathways to scale up the inclusion of ecosystem values in public and private decision making. Nature’s assets are, after all, what all life depends on.