People and planet can both thrive with better restoration finance

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The Earth’s biodiversity is in crisis. Between 1970 and 2020, monitored wildlife populations declined by an average of 73 percent – with the Global South seeing the biggest losses.

In response, billions of dollars have been invested in restoration efforts, especially through tree planting.

The Bonn Challenge, for example, aims to restore 350 million hectares of degraded and deforested landscapes by 2030, while the United Nations Strategic Plan for Forests aims to increase the world’s forest area by 3 percent by the same year.

These restoration efforts are often carried out in collaboration with local communities that rely on the target landscapes for agriculture.

“For over two decades, billions of dollars has been invested in restoration efforts in areas where communities use the same land for rain-fed agriculture,” explained Erik Acanakwo, CIFOR-ICRAF’s country representative for Uganda, at GLF Africa 2024.

But despite these investments, the world is on track to achieve only 17 percent of the 2030 targets for biodiversity conservation.

What’s more, the local communities tasked with the tree planting remain “vulnerable to the impacts of climate change” and trapped in “the web of poverty,” said Acanakwo.

To hit the targets, more funds need to be mobilized – with Target 19 of the CBD Kunming–Montreal Global Biodiversity Framework (GBF) aiming for USD 200 billion per year by 2030 – but projects must also find ways to leverage existing investments.

A recent pilot study in Rwanda and Uganda suggests that we could do exactly that by combining biodiversity, climate and social welfare objectives.

How can trees on farms boost biodiversity?

The pilot scheme was part of a larger seven-year program, Trees on Farms for Biodiversity (TonF), which built awareness of the role trees on farms can play in meeting global and national biodiversity targets.

“Trees on farms are directly contributing to the conservation of biodiversity by creating connectivity between intact forests and agriculture,” says Anja Gassner, CIFOR-ICRAF’s Europe director and leader of the global policy project Trees on Farms (TonF).

Moreover, if the trees are native, they can also boost the integrity of a landscape. This means trees on farms directly help countries achieve Goal A of the Kunming–Montreal Global Biodiversity Framework, she says.

Tree stocks on agricultural land can also support climate adaptation and mitigation by stabilizing water supplies, protecting crops and offering an alternative source of income, Gassner adds.

Short-term growth, long-term failure

However, many tree planting projects have limited long-term success.

“If you ask our agroforesters across Sub-Saharan Africa, they will tell you that giving out seedlings to farmers, you normally have survival rates between 10 and 30 percent,” says Gassner.

This results in wasted investments, helping neither people nor planet.

“You have all these tree planting campaigns, huge amounts of trees that are planted,” she says. “If a tree costs you 70 cents, how much money is just wasted by doing this?”

The reason, according to Gassner, is that planting trees on farms comes with massive costs to the farming communities tasked with doing it.

While reforestation projects often focus on the price of seedlings, they tend to forget the multiple years of maintenance and opportunity costs that come with it.

“Farmers are very busy people, and especially for women, managing the farm and the household and everything else is very time-consuming and difficult,” Gassner said at GLF Africa 2024.

“When we as agricultural practitioners come to do projects with farmers, we need to realize that planting and managing trees adds to that workload. It leads to extra labor and extra costs for farmers.”

These additional costs prevent tree planting from being financially viable for farmers, which leads them to abandon their saplings – hence explaining the low survival rates.

The pilot project in Rwanda and Uganda, led by Gassner and her team, attempted to address this shortcoming.

They worked with 829 farmers across the two countries, all of whom received seedlings, training and, crucially, a performance-based contract that compensated them for time spent caring for trees on their farms.

If they achieved a pre-agreed survival rate of 70 percent, the farmers received incentives in the form of livestock or farming equipment, Gassner says.

The choice of incentive was co-developed with the farmers and district officers to ensure they received what they actually needed.

“We started with the district authority, then the sector authority, then the farmer, and we said, ‘Okay, we want to plant trees, but we realize that the survival rate is very low. What could be an incentive for you keep this tree alive?’” says Athanase Mukuralinda, Rwanda country coordinator at CIFOR-ICRAF, who was also involved in the project.

“They said, ‘Don’t give money, because with money, we don’t know what’s happening. With money, one day, a man can go in the bar, drink all day and the story is finished. But when you give livestock, it’s a household decision to sell a cow,’” says Mukuralinda.

“They give an example of one cow for one poor family – it helped a family reduce poverty and increase crop productivity through the manure.”

Of the 829 farmers who took part, 229 succeeded in hitting the 70-percent survival rate and received incentives, boosting average seedling survival rates from 30 percent to 60 percent.

Private-sector partners

Importantly, these payments in kind are not indefinite.

Unlike a payments for ecosystem services (PES) scheme, which offers incentives to farmers that provide some sort of ecological service, this type of program compensates farmers for their time and opportunity costs only until the trees start paying for themselves.

“When you plant new trees, there isn’t an immediate benefit for the farmer because there’s a time-lapse,” Gassner says. “In finance, that’s the transition cost. That’s what we’re doing with the performance-based contract.”

“We will help by paying your labor so you take care of the tree. By year five or six, you start benefiting from that tree, so you don’t get payments anymore because now it benefits you,” she explains.

The scheme also highlights the role of farmers in tree planting projects not as beneficiaries receiving seedlings, but as private-sector partners delivering a service.

“I think a farmer is a partner in a private-sector project. They are the private sector. So if I work with the private sector, then what does the private sector get out of it?

“It’s a contractual agreement where you do a service and I compensate you for it based on the regular market rate. In our case, it was the minimum daily labor payment.”

Good for the planet, good for people

What’s more, a ‘payment for restoration labor’ scheme could be incorporated into wider welfare programs using proven methods.

In Rwanda, for example, the Vision 2020 Umurenge Programme (VUP) sought to alleviate poverty through, among other things, cash-for-labor schemes focused on short-term employment for public works projects.

The VUP succeeded in reducing poverty and led to smallholder farmers investing in their farms, says Mukuralinda. However, “they didn’t do much for the environment – for example, planting trees where survival rate will be higher.”

“So, we think the next time this VUP is running in Rwanda, it could be adapted to also be used in environment protection – for example, by protecting these trees and increasing the survival rate,” he adds.

The TonF pilot scheme shows exactly how this could be done, leveraging existing restoration finance for social benefits and improved ecological outcomes at the same time.

It would mean “more money into the pocket of the farmer, which contributes to their welfare, and at the same time, your restoration efforts will actually last,” says Gassner.

“We just did a proof of concept. We wanted to show it can be done, and we did increase the tree survival rate of seedlings.”

“You can work out how much money you saved by making these trees survive.”