The BioCarbon Fund Initiative for Sustainable Forest Landscapes was established in 2013. The Initiative is supported by Germany, the Kingdom of Norway, Switzerland, the United Kingdom (Department for Business, Energy and Industrial Strategy and Department for Environment, Food and Rural Affairs), and the United States. It has $355 million in fund capital and supports programs in Colombia, Ethiopia, Indonesia, Mexico, and Zambia.

The ISFL will achieve its objective of greenhouse gas emission reductions, while also addressing poverty and unsustainable land use, through four key design elements.

Working at Scale

Each ISFL program focuses on an entire jurisdiction (state, province, or region) within a country, which provides programs with the opportunity to engage with multiple sectors affecting land use and increase its impact over a relatively large area. The ISFL utilizes a landscape approach in each jurisdiction, which requires stakeholders to consider the trade-offs and synergies between different sectors that may compete in a jurisdiction for land use – such as forests, agriculture, energy, mining, and infrastructure. In doing so, solutions can be identified to serve multiple objectives and influence a variety of sectors.

The goal of the landscape approach is to implement a development strategy that strives for environmental, social, and economic impact at scale. This is done by targeting interventions to improve the enabling environment for sustainable land use. Improvements in the enabling environment such as participatory forest management or land use planning can have significant impact on how land is used and can benefit communities across a jurisdiction.

Leveraging Partnerships

In order to reduce GHG emissions from land use across an entire jurisdiction while simultaneously creating livelihood opportunities, the ISFL will create partnerships with other public sector initiatives and private sector actors. Public-private partnerships (PPPs) are essential to mobilize capital and align objectives in order to create sustainable and scalable models for long-term improved land use.

Private actors – from subsistence farmers to global multi-national firms – have significant influence on the way land is used. The ISFL intends to engage these actors through its programs and, more broadly, work alongside global forums of companies that have pledged to reduce their impact on tropical forests to help identify pathways to enact these commitments. The ISFL will explore opportunities to engage the private sector in the agriculture, energy, and finance sectors, amongst others, where that sector has a significant impact on landscapes within a jurisdiction.

Engagements with the private sector can take several forms, from collaborating on sustainability approaches, to blending finance in-country, to convening stakeholders to work toward complementary goals. Through these partnerships, the ISFL can impact the private sector’s contribution to sustainable land use and increased productivity, ultimately reducing GHG emissions and generating livelihood opportunities.

The public sector has an essential role to play in shaping private sector behavior through appropriate policy setting, regulation and promoting sustainability in a variety of sectors. By addressing these issues, countries can ultimately reduce risk and drive private sector investments in a green economy that benefits people and the environment.

Incentivizing Results

By taking on the immense challenges of convening public and private actors and creating an enabling environment for sustainable development, countries can expect to generate results – including a reduction in GHG emissions. To incentivize countries to do so, the ISFL will provide significant results-based climate finance over a 10-15 year period by purchasing verified emission reductions.

This results-based finance is intended to create a positive feedback loop for successful interventions for sustainable land use in each program country. If effective, each jurisdiction can continue to generate results, sell verified emission reductions, and reinvest in successful interventions. Eventually, this model for sustainable development could be scaled up beyond each jurisdiction.

Building on Experience

The ISFL reflects the demand for progression from relatively small-scale pilot projects to a program aimed at incentivizing sustainable land use at scale. To work at scale effectively, the ISFL builds on the experiences and lessons learned by the BioCarbon Fund’s initial work piloting land use projects, REDD+ initiatives, and other sustainable forest and land use programs. More specifically, the ISFL relies on the national REDD+ readiness work of the Forest Carbon Partnership Facility (FCPF) and the United Nations REDD Programme (UN-REDD), which have created essential institutional infrastructure for large-scale land use programs, including:

• An emphasis on accountable and transparent program management arrangements

• Clear operating mandates

• Multi-sector coordination mechanisms and cross-sector collaboration

• Technical supervision capacity

• Funds management capacity

• Mechanisms for feedback and grievance redress

This streamlined approach allows the ISFL to concentrate its efforts and activities at the jurisdictional level, adding value to existing platforms, while not duplicating existing processes. By building on this experience, the ISFL can, to some extent, limit the administrative burden of implementing jurisdictional programs and focus implementation efforts at the program-level by tapping into functional coordination platforms.

The ISFL will seek to engage relevant stakeholders in program countries, taking into consideration the existing mechanisms in the country, including the FCPF, UN-REDD, the United Nations Framework Convention on Climate Change (UNFCCC), as well as agriculture, energy, infrastructure, and other relevant stakeholder groups working in each landscape. Priority will be given to already organized groups of stakeholders and other initiatives such as broader national climate change platforms. In cases where other land-use based projects supported by the World Bank Group and other partners are established, the ISFL program will identify them for effective engagement including building on their structures of engagement, as appropriate.

In order to achieve success in each ISFL program, countries will require several tools and approaches at their disposal, and the flexibility to combine them to suit the country’s context. The design of the BioCFplus, a true pioneer for the World Bank Group and carbon and land use funds - in combination with the results-based finance from BioCF Tranche 3 (T3) - can provide this flexibility.

BioCFplus:

• Provides funding in the form of a grant. 134.7 M$ pledged (2022)

• Supports countries to make improvements to its enabling environment for sustainable land use.

• Supports piloting of activities and key partnerships, including engagements with private sector.

• Provides resources to countries to develop systems for monitoring, reporting, and verifying reductions in GHG emissions to prepare jurisdictions for payments.

BioCF Tranche 3:

• Provides results-based finance through the purchase of verified emissions reductions. 232.6 M$ pledged (2022)

• Payments provide incentives for countries to shift to a sustainable development trajectory for each jurisdiction.

• Payments can be used to sustain successful interventions to sustainable land use in each jurisdiction.

The BioCFplus has been designed specifically to operationalize the vision of the ISFL, which requires several innovative elements in order to meet the demand on the ground in ISFL countries. The fund supports technical assistance and capacity building efforts in each jurisdiction and can provide some critical investment finance to test sustainable land use approaches. This combination of finance from one source gives flexibility to countries to design their programs in an integrated way and identify the most effective approaches for land management.

In addition, the BioCF plus can directly finance advisory service projects through the International Finance Corporation (IFC). This direct funding link with the IFC is groundbreaking for the World Bank Group and aligns goals and visions more closely. IFC advisory service projects can attract private sector interest in ISFL jurisdictions and can benefit farmers and other private sector actors directly.

Meanwhile, the BioCF T3 provides payments for verified emission reductions generated across the landscape, which are expected to yield significant revenue over a 10-15 year period. These payments are envisioned to sustain and build on interventions successfully implemented in the jurisdiction and beyond. It is the ambition of the ISFL to generate a feedback loop of funding for sustainable land use.

The ISFL has detailed its mandatory and optional indicators and expected milestones in its Monitoring, Evaluation, and Learning Framework, available here: https://www.biocarbonfund-isfl.org/sites/biocf/files/documents/ISFL%20MEL%20Framework%20June%202019.pdf

The ISFL Monitoring, Evaluation, and Learning Framework: https://www.biocarbonfund-isfl.org/sites/biocf/files/documents/ISFL%20MEL%20Framework%20June%202019.pdf