Man planting a tree in Colombia
Greening the desert—USAID-Oro Legal Activity brought together indigenous and Afro Colombian communities, the private sector, and local and departmental governments to mitigate the environmental impact of uncontrolled mineral exploitation on more than one thousand hectares of degraded ex-mining land.

Making Money Matter

How USAID Combats the Climate Crisis by Helping Forest Communities Access Climate Finance
By USAID

Earth Day 2021’s theme is "Restore Our Earth," focusing on the central role that nature can play in combating the climate crisis. It’s a timely theme: on Earth Day, President Biden is hosting a Leaders’ Summit on Climate to increase global ambition to address the climate crisis and galvanize efforts to keep the vital goal of limiting warming to 1.5 degrees Celsius within reach. Those ambitions cannot be realized without addressing the nearly one-quarter of global emissions that come from land use - including deforestation and agriculture.  In many countries where USAID works, these are the largest source of national greenhouse gas emissions. 

The situation is urgent. More than half of the world’s tropical forests—which serve as critical carbon sinks—have been destroyed since the 1960s. To avert climate disaster, we must quickly reverse this trend. The good news is that the world is mobilizing greater funding to protect tropical forests and other critical landscapes. But climate financing alone will not solve this challenge without complementary investments in the enabling environment for conservation - particularly supporting local institutions and communities with the right mix of capacity, policies, incentives, and tools.   

Advancing Natural Climate Solutions

Changing how to manage and use land to reduce emissions and increase carbon storage is inherently challenging, complicated by the many driving forces that affect land use change. This work requires coordination across many economic sectors and engagement with a broad set of government, private sector, and community stakeholders. USAID is advancing new approaches to natural climate solutions that will spur and speed forest conservation and reforestation in key landscapes in Latin America, Asia, and Africa. Alongside our commitments to increase our investments to combat the climate crisis, these approaches will help our partner countries establish the right conditions and incentives to mobilize investments in natural climate solutions, protecting and reforesting 20 million hectares by 2025

This work will build on USAID’s strong foundation of Natural Climate Solutions programs and partners, which are already making a big impact. For example, USAID and the Government of Indonesia partnered to improve management of 7.48 million hectares of forest over the past five years, reducing emissions from deforestation and forest degradation by 41 percent in those areas—equivalent to storing 76 million metric tons of CO2 or removing 16.4 million cars from the road for a year.

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Forest in Vietnam
USAID’s Green Annamites Project in Vietnam supports provinces to reduce their carbon emissions and advance their green growth goals. The project works with government agencies to strengthen forest monitoring, low-emission land use, and facilitates discussions with potential carbon credit buyers.

Getting Investment-Ready

Forests and lands can be a complicated sector for investors. USAID works to reform policies, plans and regulations in partner countries to make it easier to invest in and build markets for carbon and environmental services. Clear policies and plans also help to incentivize communities and companies to conserve, rather than degrade, land and forest resources. In Colombia, USAID helped put into practice new incentives for businesses to pay less taxes by investing in forest protection. We then helped Afro-Colombian and Indigenous communities organize themselves to benefit from this incentive—verifying and selling carbon credits and earning $11 million since 2014, while protecting more than a half of a million hectares of forest and avoiding 6.1 million tons of carbon dioxide emissions — the equivalent of removing over 1 million cars from the road for one year. In India, USAID is working with farmers, small businesses, and other private sector entities to sustainably expand reforestation efforts, reducing risks and regulatory impediments so that growing trees provides economic and environmental returns. 

Creating systems to measure, report and verify emissions is also critical to encouraging investments in natural climate solutions. USAID leads whole-of-U.S. government partnerships like Silvacarbon to build and sustain partner country systems that help countries reduce emissions while protecting and managing their own forests.

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A young man from the Indigenous community of Junín Pablo in Peru makes his way home after a day’s work in the forest
A young man from the Indigenous community of Junín Pablo in Peru makes his way home after a day’s work in the forest. USAID Pro-Bosques works to advance sustainable forest management and empower Indigenous communities.

Engaging Local Communities and Formalizing Land Rights

Local communities who live in and depend on land and forest resources are best-placed to sustainably manage them. USAID takes time to build trust and develop strong partnerships with these communities to ensure that their needs and perspectives are front and center. USAID also works to clarify and formalize land and resource tenure, often a key element to equipping and incentivizing communities and Indigenous Peoples to be agents of change on climate. USAID partners with Indigenous communities in Peru, for example, equipping an Indigenous-owned company with the legal, business, and technical skills it needs to set up sustainable businesses focused on timber and non-timber resources, commercial forest plantations, and organic cocoa production, and access incentive payments for the trees and carbon they conserve. 

Partnering with Climate-Ambitious Companies and Investors

Businesses in the agroforestry sector have the potential to be important allies in the fight against climate change. USAID support for late-stage investments in sustainable agriculture and forest restoration through the Althelia Climate Fund, for example, allowed the fund to produce verified emission credits to sell to the voluntary carbon market. In Southeast Asia, USAID helps agriculture and forestry businesses improve the sustainability and profitability of their operations while increasing opportunities for carbon sequestration by connecting them with like-minded investors. In the Amazon, we are partnering with a forestry company in Peru to shift from harvesting timber to sequestering carbon and using non-timber resources and supporting private-sector-led efforts in Brazil to share experiences and lessons learned to ensure that private investment achieves long-term environment and social impact.

USAID is bringing together diverse voices and perspectives to develop effective and lasting solutions: just in the last few months, we convened more than 150 experts from the private and non-profit sector, academic institutions, and other donors in a co-creation process to identify opportunities to scale and speed up sustainable supply chain and reforestation efforts. USAID is ready to support the Biden Administration’s bold climate efforts by working with our partner countries to access climate finance and develop the systems, approaches, and tools to tackle the climate crisis.   

Strategic Objective
Mitigation
Topics
Adaptation, Climate, Climate Change, Climate Change Integration, Climate Finance, Climate Policy, Economic Growth, Forestry, Land Use, Mitigation, Natural Resource Management, Resilience
Region
Global

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Part II: Climate Finance in Action