ISFL Design Principles

The BioCarbon Fund Initiative for Sustainable Forest Landscapes (ISFL) was designed based on four principles:

JURISDICTIONAL LANDSCAPE APPROACH

A landscape approach looks at the trade-offs and synergies between different land uses that may compete in a jurisdiction — such as agriculture, energy, and forest protection — and identifies integrated solutions that serve multiple objectives. A sunny view with clouds casting shadows on the lush mountain range. Adopting a landscape approach means implementing a development strategy that is climate smart, equitable, productive and profitable at scale and strives for environmental, social, and economic impact. The jurisdictional approach offers a number of advantages, primarily aligning actions on the ground with policy level interventions taken by the regional administrative entity. The administrative entity will have a role in the promotion of fundamental policies and measures such as spatial planning, strategy development, enforcement and regulation measures; beyond the inclusion of specific investment programs in fragile areas.

MULTI-STAKEHOLDER IMPLEMENTATION ARRANGEMENTS

The BioCF and public sector donors recognize the importance of strategic partnership with the private sector to create sustainable and scalable business models for long-term improved land-use practices. Therefore, the fund wants to align its activities with private sector. Emerging markets are playing an increasing role in the business development strategy of many companies. Agriculture companies and extractive industries are investing directly into land-use; consumer goods companies and commodity traders create off-take markets for their outputs. Financial investors are looking for financial products and deals to generate higher returns. The BioCF will aim to work with different private sector players to build a pipeline that incentivizes more investments in sustainable and eco-friendly business opportunities.

RESULTS-BASED FINANCE

The fund will target specific results (likely carbon mitigation) and offer incentives for social and environmental land-use projects (e.g., agriculture, forestry, biomass energy). Projects that incorporate sustainability — through e.g., zero-till farming by smallholders — are not always financially viable. Therefore, the ISFL proposes a structure that provides payments to programs on top of existing internal cash flows (e.g., off take contracts for crops from sustainable practices) when those programs produce a defined result. The fund could also deploy results-based finance to incentivize policy changes in emerging markets that would advance the sustainable land management agenda.

EFFECTIVE GOVERNANCE

The Initiative’s efforts and activities are focused at the country level. Contributors will have the flexibility to support any of the country programs being developed under the Initiative. A decision-making body will be established for each country program for contributor governments and the World Bank to progress programming efficiently on the ground. Not all contributors need to participate in all the country programs; however, only those contributors who have contributed to a country program will be part of the decision-making process for that program.  

At the Initiative-level, contributors work together on the selection of country programs and exchanging lessons between them.

At the level of the country programs, country-specific advisory bodies composed of leading experts from government, civil society and the private sector with a range of relevant knowledge may provide technical input into the program design and development of a specific country program, and work with recipient government to catalyze the implementation of programs.