Poll: The Cause of California’s Wildfires Is Mainly Due To:
A Californian start-up wants to save millions of acres of forest from fires by partnering with the US Forest Service and local businesses on an innovative social impact bond. Around 82 million acres of forest currently need restoration work, but the Forest Service only has enough funds to work on some five million acres annually. One of the few instances where a bond of this type has been initiated by a start-up, it would bring in public and private money for restoration.
A San Francisco start-up is pitching government agencies a social impact bond to fight some of the worst forest fires in Californian history. The founders of a new San Francisco firm called Blue Forest Conservation want to help the state by channelling private investment to government agencies via the sale of so-called forest-resilience bonds.
Blue Forest Conservation’s scheme would be one of few instances where such bonds are initiated by a start-up rather than the public sector, and the money would be used to pay teams to cut small trees and clear plants. Investors would earn market rate returns through long-term cost-sharing contracts with partners such as the US Forest Service and water and electric companies, all of whom benefit from better forest management.
Over the last few years, the Forest Service has had to spend more time fighting fires than preventing them. Firefighting now counts for more than half of the Forest Service’s budget and around 82 million acres of forest currently require restoration to prevent fires. Due to a lack of funds, the Forest Service managed to work on only 4.6 million acres in 2014.
Several agencies that depend on the health of the forests stand to benefit. The Forest Service, water suppliers and power utilities could all contribute to paying for the bonds. Major water users such as breweries and bottling plants could also participate. In addition to reducing the risk of fires, the scheme is intended to allow more rainwater and groundwater to flow downstream to reservoirs, businesses and local homes.
Under the proposal, private investors would make funds available for restoration work. If that work is successful, the Forest Service and the local businesses who stand to benefit would agree to pay those investors a return. In this way, a large amount of private funding would be unlocked with only a comparatively small outlay over several years from the public sector.
Blue Forest has yet to sign a deal with the Forest Service, but has secured around $1m in funding from the Rockefeller Foundation. Its founders also aim to start small by raising just a few million dollars for their first bond, which will go towards conserving a small area in Tahoe National Forest.
“We are scoping out a number of areas where we could increase collaboration,” said Nick Wobbrock, co-founder and partner of Blue Forest Conservation. “We are looking at other projects which have already been through the permitting phase and the community collaboration phase. One thing for us to think about is that we don’t want investor money dictating where the projects take place.”
Remainder of The Article: My Idea Of How To Finance The Management Of Wildfires
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