INVESTING IN TREES AND LANDSCAPE ... - PROFOR

size of an agricultural carbon project (to cover monitoring and other transaction costs) is estimated
to be about 200,000 hectares, which would sequester roughly 50,000 tons of CO 2 per year (Forest
Trends 2010). This need for aggregation is prompting new interest in landscape approaches that
can encompass diverse land uses at scale. These projects are institutionally complex and require the
engagement of stakeholders across sectors throughout the landscape (Shames and Scherr 2010).
Diverse business models are developing that can be linked to agricultural product supply chains,
agricultural and watershed development programs, and microfinance operations.
Payments for watershed services are also expanding in Africa, although there are currently only a
handful of functioning projects (Ferraro 2009). From a market perspective, the primary difference
between water and carbon is that watershed service buyers are locally based. The downstream
buyers must see a direct benefit from changed land management practices upstream. The buyers
tend to be municipalities or beverage bottling plants.
Payments to farmers for biodiversity are less developed in Africa, as they face financial barriers, political
instability, and disagreements about how the payments should be structured (Madsen, Carroll, and
Moore Brands 2010). Currently, most buyers are governments, NGOs, and philanthropic funds. But
private financial flows could potentially dwarf these over the long term, in particular through biodiversity
offsets in which commercial agriculture, infrastructure, urbanization, and industrial investments offset
unavoidable damage to biodiversity by paying farmers, forest communities, or other land managers to
protect or restore wild fauna and flora habitat and populations. As with carbon, these schemes usually
require landscape-scale, multistakeholder negotiation processes to succeed.
2.5 OTHER FACTORS THAT AFFECT OPPORTUNITIES
FOR LANDSCAPE RESTORATION
In addition to biophysical and market factors, other important spatial factors influence motivations
and feasibility for private and public investment in landscape restoration. This section focuses on
patterns of land and resource tenure, spatial patterns of international investment and land acquisition,
quality of governance, and zones of conflict. An extended analysis would also take into account the
spatial variations in population density, water availability, poverty, income and income growth, and
agricultural productivity potential.
Land and Forest Tenure
Successful landscape restoration requires respect for pre-existing conventions of land and resource
ownership; sensitivity to issues of access and equity as investments change the economic value
of land, tree, and forest resources; and awareness of the risks that uncertain or contentious tenure
regimes may pose to investors. Planning for successful restoration interventions will benefit from
examining spatial patterns of tenure systems, including land under titling; secure private ownership
without titling; community (common property) title, including customary security rights; national
government ownership; and disputed ownership.
While these distinctions provide a useful starting point, they do not in themselves reveal the degree
of risk to investors that stems from insecure or disputed property rights. The unusually mixed
evidence for the tenure-investment relationship makes Africa stand out from the rest of the world.
Chapter 2. WHERE DO PRIVATE MARKET INCENTIVES CONVERGE WITH LANDSCAPE RESTORATION GOALS?
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