Striking a Deal to Save the World's Forests

Tucked away in the Himalayas you'll find Bhutan -- one of the smallest countries in the world, but blessed with an abundance of natural treasures and beauty. It's a fairy-tale landscape. Endless forests and mountains home to 700 species of birds; a network of 10 protected areas, mainly lush forests where Royal Bengal tigers and their cubs roam freely; rivers that support livelihoods for some if its 750,000 people (and that are part of a larger network across several countries that provides freshwater for at least one-fifth of the Earth's population).

The country may be small, but their commitment to conservation is bigger than most. Protecting the environment is one of the four pillars of Bhutan's Gross National Happiness philosophy. As mandated in its constitution, Bhutan preserves (at all times) at least 60 percent of its land under forest cover. 

But the modern world is transforming this tiny ecological and cultural gem. 

WWF's 2014 Living Planet Report, a biennial progress report of our planet's overall environmental health, reported a more than 60 percent decline in the essential services provided by nature (freshwater production, carbon sequestration, forest growth). All indicators related to our mission -- from biodiversity to climate change to natural-resource scarcity -- trend in the wrong direction and affect every country in the world, including Bhutan. In fact, Bhutan has changed more in the last 50 years than the previous 500. Rapid modernization has brought its share of difficulties for Bhutan's government. The country's natural resources face unprecedented threats, despite the political will and conservation milestones. 

Bhutan, like others around the world, works to find the right balance between fostering economic development and conserving its landscape and natural resources. The government recognizes the intrinsic value of its natural infrastructure, most particularly its forests, to the future of the country, whether it's retaining intact watersheds that fuel the country's hydropower, or the distinctive ecotourism model that makes it unique in the world. Bhutan's protected-areas system now conserves 51% of the country. Without ongoing financing for management of its forests, Bhutan stands to lose that natural infrastructure and the economic pillars that depend upon its forests remaining pristine.

The government just made a bold move to protect its forests. Forever.

Working with WWF and others, Bhutan now leads an effort to create a financial-reserve fund to ensure its natural ecosystems will be protected in perpetuity. Taken straight from Wall Street's financial playbook, Bhutan, along with the private sector, corporate and multi-lateral partners, plans to invest in its conservation future using an innovative and transformational financial plan we call Project Finance for Permanence.

It's a financial model that relies on a multi-party, single closing, where all funders bring their money to the table at once in an all-or-nothing closing. Funds aren't distributed until the entire fundraising-commitment goal has been reached and other agreed-upon conditions have been met. If the consortium fails to reach the total funding goal, nobody pays.

The financial approach begins with a performance-based conservation plan with a targeted set of goals and milestones. All details are ironed out before a single dollar is invested. It's an up-front guarantee for donors that something real is going to happen. They can rest assured that they're leaving something permanent behind for future generations. In the case of Bhutan, the government will increase its spending until it fully assumes the cost of managing its protected areas.

A global project-finance-permanence approach promises a much greater impact in a shorter amount of time. More importantly, it delivers conservation results that match the scale of the threats we face. We know this works. It's been successfully deployed in Brazil, Costa Rica and British Columbia.

In May 2014, the Brazilian government, WWF and others, created a $215 million fund to permanently protect 150 million acres of the Brazilian Amazon. When Brazil announced what they had done at the World Congress on Biodiversity in Korea this past year, scores of countries told us they wanted the same.

In addition to working with Bhutan, we're now working with the government of Peru, the Moore Foundation and others, to permanently financially protect that country's network of protected areas.

Project Finance for Permanence is one of the greatest innovations of our time to secure permanent funding for our precious and vulnerable landscapes. It holds governments accountable to their long-term conservation commitments. It moves away from year-by-year transactions which are often not sufficient to fully fund conservation initiatives. And it enables governments to assume the long-term costs upon the project's completion.

We need to find solutions that are as big as the conservation challenges we face. Securing long-term financial security for national-park systems takes a big step in the right direction.

This post is part of a Huffington Post What's Working series on the environment. The series is putting a spotlight on initiatives and solutions that are actually making a difference -- whether in the battle against climate change, or tackling pollution or other environmental challenges. To see all the posts in the series, read here.