Forest Resilience Bond brings non-traditional partners together to create a tangible solution for scaling investment in forest health and mitigating wildfire risk
November 01, 2018
|CSAA Insurance Group is part of a pilot project to protect natural resources and reduce the risk of severe wildfires.|
WALNUT CREEK, Calif., November 1, 2018 – CSAA Insurance Group, a AAA insurer, joins a small group of private financiers to invest in a new Forest Resilience Bond that funds the upfront costs of forest restoration, while earning investors returns from the multiple agencies that benefit from the mitigation work.
Developed by Blue Forest Conservation and the World Resources Institute, the pilot project raises $4 million in private capital to finance forest management in 15,000 acres of the North Yuba River area of Tahoe National Forest. The National Forest Foundation will lead the forest management work on the ground: managing invasive plants, cutting down small trees, clearing out shrubs, and burning off ground cover that can fuel wildland fires, for example. Healthier, thinner forests reduce the risk of severe fires, improve watershed health, and protect water resources.
“Investing in healthy forests is good for the state, good for AAA members, and good for us as an insurer with thousands of customers living in areas at risk of wildfires and other disasters,” said Linc Walworth, vice president of investments at CSAA Insurance Group. “We earn a good return while helping the environment and our customers. What a great combination in a single investment,” he said.
The bond is the first of its kind, and supporters hope it will serve as a formula for infusing forest restoration with private financing. The Forest Service pays what it can to keep public forests healthy, but its budget is stretched as money is spent increasingly on firefighting rather than on maintaining healthy forests.
Blue Forest Conservation contends that a public-private approach to funding healthy forests is more important than ever, especially as communities deal with the dual threats of mega-fires and droughts. The private financing generated by the bond allows public agencies to accelerate the pace and scale of restoration treatments by making funding available upfront.
Other organizations investing in the Yuba bond pilot project include The Rockefeller Foundation, the Gordon and Betty Moore Foundation and Calvert Impact Capital. The Yuba Water Agency, a utility provider that recognizes the benefits of restoration to its local water quality, air quality, economy and environment, has committed $1.5 million over five years to reimburse investors. The California state government has also committed $2.6 million in grant funding to the project. The Tahoe National Forest will provide in-kind support and services and has provided all the resources associated with planning and permitting the project.
“The bond demonstrates a collaborative approach to funding forest health treatments that benefit everyone both ecologically and economically,” said Blue Forest Conservation Managing Partner Zach Knight. “We think this pilot can serve as a template for any state struggling to fund forest restoration work.”
Upon successful completion of the pilot project, Blue Forest Conservation and the World Resources Institute plan to launch a second phase of restoration work that will cover a much larger area of the Yuba River watershed. The team is also working to identify other landscapes across the West where the Forest Resilience Bond could play a role in promoting forest and watershed health, and mitigating wildfire risk.
“We are honored to be among the early supporters of the bond, and we’re eager for the Yuba pilot to be a success, so others will see the benefit in investing in similar restoration projects around the state and country,” Walworth said. “The more funding we can create for forest restoration, the faster the work can get done, and the faster we can reduce our risk to destructive forest fires and other disasters.”
CSAA Insurance Group, a AAA insurer, offers automobile, homeowners and other personal lines of insurance to AAA members through AAA clubs in 23 states and the District of Columbia. Founded in 1914, the company has been rated “A” or better by A.M. Best for 90 years, and is one of the top personal lines property casualty insurance groups in the United States, according to the National Association of Insurance Commissioners. The company has been repeatedly named one of the 50 most community-minded companies in America by Points of Light. Read more at csaa-insurance.aaa.com.