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Innovative Financing Bringing Together Range of Stakeholders and Investors to Get It Done

Hundreds of thousands of acres, tens of thousands of firefighters, thousands of homes, millions of tons of carbon dioxide, and human lives at risk.

These have become the annual headlines of California’s wildfire season, when the Diablo and Santa Ana winds below down the hillsides, helping ignite dry vegetation and carrying embers from one hot spot to another.

These fires damage, and sometimes devastate, local communities, entire ecosystems, and watershed health. In 2018 and 2019, the U.S. recorded 98,786 wildfires, with 13.1 million acres burned. Every state faced some devastation, but California was the nation’s leader, battling more than 8,000 wildfires in 2019 alone.

What needs to be done to contain wildfires is not a mystery.

Timberlands are congested with up to ten times the number of trees nature recommended, largely due to policies of halting natural fire cycles because we live in such close proximity to nature now. Sustainable forestry management—clearing of overgrowth and controlled burning, combined with management of invasive species and watershed restoration—is crucial.

But the price tag puts the work out of reach for the U.S. Forest Service, which manages 193 million acres across the U.S. Nearly half that land needs restoration, costing more than 100 billion dollars. At the current spending levels, this would take the Forest Service over 200 years to complete.

The Rockefeller Foundation is working to close the financing gap through a unique collaboration that empowers private capital to make impact investments.

This groundbreaking model not only seeks to contain the seasonal infernos but is broadly applicable across a range of settings, from other climate and environment projects to the work that will be necessary to recover from COVID-19 and provide safeguards against the consequences of future epidemics.

“We are going into a world where we could use more resilience and predictability, and part of that comes down to promoting and maintaining a healthy relationship with nature,” says Adam Connaker, the Foundation’s Innovative Finance principal. “The other piece of this is that the financial system is struggling to put value on natural capital, but public good is at stake. We have shown it is possible—even if complicated—to combine multiple beneficiaries and create a financial investment vehicle that values the health of our natural ecosystems.”

The Foundation invested $1 million in a pilot project to the Forest Resilience Bond (FRB), run by Rockefeller Foundation grantee Blue Forest Conservation, which empowers private capital to finance much-needed forest restoration across the western U.S.

Work began in 2019, with about 25 percent of the Foundation’s commitment deployed, and expectations are that the money will fund restoration for the next three years.

And even as this pilot project focuses on deploying capital, executing its wildfire mitigation mandate, and demonstrating the power of the FRB, Blue Forest is raising additional funding for more and larger FRBs to address more at-risk acreage.


  • We are going into a world where we could use more resilience and predictability, and part of that comes down to promoting and maintaining a healthy relationship with nature.
    Adam Connaker
    Principal, Innovative Finance, The Rockefeller Foundation

Our Approach

Forest Restoration Bond Blueprint

  1. Identify a public issue that impacts social good broadly and requires more funding more quickly than one entity can payout.
  2. Identify various public and/or private stakeholders and get buy-in by demonstrating how resolving this issue would improve their bottom lines.
  3. Assemble a mixture of philanthropic and/or commercial investors, offering different returns on investment.
  4. Begin the work—and the paybacks—in trenches.

Varied stakeholders such as the Forest Service, utilities, and state governments have an interest in averting severe wildfire, not only for the public good and forest health but because there is a compelling economic case for doing so.

However, when standing alone, each individual group lacks the legal standing, capacity, and resources to address the problem.

The Forest Resilience Bond provides, for the first time, the chance for these diverse actors to band together to reduce the risks of catastrophic fire that could harm them all.

In addition to The Rockefeller Foundation, Gordon & Betty Moore Foundation, Calvert Impact Capital and CSAA Insurance all invested in the Yuba pilot.

Two beneficiaries—the privately held Yuba Water Agency (YWA) and the State of California—will reimburse private investors over time, offering a 1 percent return on investment to the two Foundations, and a 4 percent return to the commercial investors.

The combination of these two players –one private and one public –is critical to the functioning of the FRB, as the government can only reimburse money spent directly on forest restoration, while the utility player can offer a return for the risk taken by private investors. YWA has committed $1.5 million, and the State will provide $2.6 million in reimbursable grant funding.

Specifically, the Foundation is funding forest restoration activities for 15,000 acres of high-risk forest in California’s Yuba River Basin aimed at both reducing the risk of severe wildfire and securing water resources in the Yuba River watershed of Tahoe National Forest.

The watershed, run by the Yuba Water Agency, provides water, flood control, and hydropower to communities in Northern California, as well as water to cities and farms across California. In addition to endangering YWA’s workers and customers, sediment from wildfires clogs the agency’s reservoir, damaging its infrastructure and increasing operating costs.

Fire risk has tripled in this area over the last eight years, a startling and dangerous trend line that suggests a severe fire is a matter of when, not if.

The Tahoe National Forest will provide in-kind support and has provided all resources associated with planning and permitting the project. The National Forest Foundation will serve as one of the primary implementation partners, leading much of the forest restoration work on the ground.

Blue Forest Conservation co-founder Leigh Madeira, during a TedxTalk, explained the dangers of overgrown forests. “I know this goes against everything we learned as kids so I’ll say it again: more trees are not always a good thing,” she said. “In fact, overgrown forests allow fire to spread much more easily, which makes the fires themselves much more severe and more difficult to control. When you add in drought and climate change and tree mortality, you have the perfect storm.”

“California has over 129 million dead trees, enough to stretch from here to the moon and back five times, Madeira said. “That is a lot of fuel just waiting to go up in flames.”

Nationwide, one of every three homes is potentially in the path of a wildfire. Those homes farther from wooded areas are still affected because national forests are the single largest source of drinking water in the US, providing water to more than half the country’s population.

“Some $52 billion is invested in global environmental conservation annually, but research shows at least six times that sum is necessary to preserve the world’s ecosystems, and Madeira believes the Forest Resilience Bond has the legs to help there too throughout side-the-box thinking on how to pair stakeholders and investors with different motivations.”

“We are also already looking at ways to help fund both drought and epidemic responses,” says Connaker. “This pilot definitely has the potential to scale up.”


Did you know that dry forests in the western U.S. have become overgrown and pose a risk to fires? To combat this, we teamed up with Blue Forest Conservation to develop the Forest Resilience Bond which will help us thin out the forests to a more healthy state. In turn, this reduces the risk of […]

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