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Blog: The Case for Investing in Landscapes (Tuukka Castren)

Contributed by Tuukka Castren, Senior Forestry Specialist at the World Bank

If the recent Global Landscapes Forum: the investment case held in London, UK is any indication, there is growing recognition of the importance of adopting a “landscape approach” to project implementation – for connecting the dots not just between different natural resource sectors and interventions, but also between different but inseparable goals, such as improving agriculture, job creation and the preservation of ecosystem services from forests. Combining such goals under a common “landscape” is an important step towards attracting the significant amount of private financing that could be available for sustainable development.

But it’s not enough.

The expectation of large-scale private financing needs to be met with the assurance of adequate financial returns. Investments in landscapes have to compete against other investment opportunities. Here is the basic litmus test: Would you consider investing your own retirement savings in, for instance, sustainable farm and forestry projects? At the moment, most people would likely find the level of risk – real or perceived – much too high and returns too low. Investment products underpinning a landscape approach need to produce returns at least comparable to traditional commercial investments.

The public sector has an important role in providing this investment-conducive environment. Barriers such as weak land-use planning, tenure insecurity, market failures and restrictive regulations need to be addressed. Targeted solutions are necessary for alleviating firms’ concerns regarding risk, returns, and time horizons. Such efforts should also include a strong data collection component: as documented in the PROFOR-funded Private Financing for Sustainable Forest Management and Forest Products in Developing Countries—Trends and Drivers, data on forest and landscape management is scarce or unreliable, which hinders the advancement of solid investment policies.

The World Bank Group (WBG) can make significant contributions to this process by bridging the gap between local public sectors and the global private sector, as well as by disseminating and exchanging knowledge, and supporting reforms. The WBG brings to the table not only financing support, but also the convening power necessary for engaging public and private stakeholders in the development of sustainable land use policies. For example, in Burundi the WBG is looking at how to improve coffee productivity and quality while reducing environmental impacts, and enhancing smallholders’ access to markets through Public Private Partnerships (PPPs). Also, in Mozambique we are identifying how best to support sustainable rural value chains.

This is not the business-as-usual operating model, because building supply chains for restoring landscapes does not have an obvious or one-size-fits-all prototype. But it is clear that a new approach is needed if we are to meet important poverty alleviation, economic growth and diversification, and environmental sustainability objectives. The challenge remains in creating profitable financial products that support the landscapes that we inherently know to be valuable. 

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Last Updated : 12-19-2016