1.
EUKI “MediterRE3” workshop, Chanià (Greece)
31 Jan – 2 Feb 2023
Alessandro Leonardi, CEO, Etifor | Valuing Nature
alessandro.leonardi@etifor.com
Financing FLR:
Governance and funding opportunities for landscape
management and restoration measures

2.
OUTLINE
1. Who is Etifor
2. Introduction
3. Types of financing instruments
4. Examples
5. Conclusions

3.
3
Etifor is a spin-off of the University of Padua that provides
international consulting services to public and private organizations
to help them grasp the full value of the products and services provided
by nature.
ETIFOR | VALUING NATURE

4.
OUR APPROACH
SCIENCE
INNOVATION
GOVERNANCE
1. Understand the problem through research & development.
2. International solution benchmarking.
3. Creativity, innovation and context-specific design.
4. Financial strategy and funding support.
5. Implementation through participation and good governance.
6. Smart communication and consultation.

5.
PEOPLE
COMPETENT, INNOVATIVE, INTERNATIONAL,
ADAPTABLE, PREJUDICES FREE

6.
BUSINESS PROGRAMMES
FOR PUBLIC
AUTHORITIES
FOR LAND
MANAGERS
FOR IMPORTERS FOR BUSINESSES FOR CITIZENS FOR DESTINATIONS
AND OPERATORS

7.
OUR EXPERIENCE
800
PROJECTS
42
COUNTRIES

8.
OUTLINE
1. Who is Etifor
2. Introduction
3. Types of financing instruments
4. Examples
5. Conclusions

9.
Sticks
Carrots
Sermons
POLICY AND MARKET BASED TOOLS

10.
To change
behaviours
Land managers
Final users
WHY WE SHOULD USE INCENTIVES

11.
Climate adaptation need a mixed green-grey infrastructure approach
To increase resiliance of the build environment
• Point vs
landscape
action
• Public purchase
vs community
landscape
management
WHY WE SHOULD USE INCENTIVES

12.
INCENTIVES SHOULD BE SET WITHIN A GOVERNANCE FRAMEWORK
FUNCTIONAL: Which conservation and management practices provide the
largest environmental, social and economic benefits?
ECONOMIC: How do we fund stakeholders’ coordination and conservation
projects?
GOVERNANCE have three main components :
INSTITUTIONAL: Which are the parties involved and what organizational,
institutional and contractual arrangements are in place to coordinate them?

13.
WHO IS INVESTING IN FLR?
Source: FAO and Global Mechanism of the UNCCD, 2015

14.
WHO IS INVESTING IN FLR?
Cost of
restoration
Risk of
investment
These investment sources may finance different FLR and stakeholder needs, at
different stages of the restoration process, according to the level of risk investors are
willing to accept and the expected rate of return.

15.
OUTLINE
1. Who is Etifor
2. Introduction
3. Types of financing instruments
4. Examples
5. Conclusions

16.
Policy instruments

17.
Law compliance
Funding
/
Quantity of
ES
Agro-environmental schemes
EU structural and environmental
funding
Number of actors and/or land covered by incentives
PES
funds
Win-win in kind
schemes
Multy-utility – Private sector
Farmers associations, NGOs, etc
Public authorities and CSO
National gov. and EU
National gov. and EU
INTEGRATED FINANCING

18.
1. Payments for Ecosystem Services (direct
deals)
2. Carbon/ecosystem services certificates
(trading)
3. Blended finance
TYPES OF FINANCING INSTRUMENTS

19.
Market-policy tools that allow:
• transfers of resources between social
actors, which aims to create
incentives
• to align individual and/or collective
land use decisions
• with the social interest in the
management of natural resources
It can be designed with many financial
instruments: scope tax, subsides, etc. (Muradian et al., 2010).
1. PAYMENTS FOR ECOSYSTEM SERVICES (PES)

20.
1. Management activities
and interventions affect
ecosystem structures,
processes, functions, or
capacities to 
2. Create positive impacts
on ecosystem services
that 
3. Provide benefits to
relevant stakeholders
which we can value.
Source: Haines-Young & Potschin 2010
Ecosystem Services

21.
Environmental
problems lead to
conflicts and
participation
Partnership
creation and
alignment
Funding search
Design and
startup phase
Implementation
and delivery of
payments and
interventions
Testing and
piloting
Evaluation and
follow up
Failure or
replication/scaleup
of the program
TIME
The «life» of PES

22.
2. Carbon/ecosystem services certificates (trading)
Actors and components:
• Carbon standards and
certifications entities/systems
• Landowners
• Project developers
• Market, trading systems
(brokers)
• Buyers

23.
• Measure
• Avoid
• Reduce or Minimize
• Restore or
Regenerate
• Offset
MITIGATION HIERARCHY

24.
Forecast of voluntary carbon markets to 2030

25.
Carbon/ecosystem services certificates (trading)
• Recent criticism to carbon
credits markets and
certification systems
• VERRA forest carbon
credits cover 75% of the
market
• 90% of their credits are
overestimated and “fake”

26.
https://ec.europa.eu/commission/presscorner/detail/en/ip_22_7156

27.
3. Blended finance
It Integrates: grants +
technical assistance +
investments (loan or
equity) or commercial
financial (private funding
through business models)

28.
OUTLINE
1. Who is Etifor
2. Introduction
3. Types of financing instruments
4. Examples
5. Conclusions

29.
Examples of funding opportunities
1. PES with water tarriff
2. FSC ecosystem services certification
3. BIOCLIMA - Blended finance
4. Wild forest products (if we have time)

30.
Freshwater
provisioning
(30% at regional level)
Biodiversity
conservation
(Natura 2000 site)
Promoting a water related PES through the water tariff system
1. LIFE BRENTA 2030 PROJECT

31.
LIFE18 NAT/IT/000756
“Promoting good governance and innovative financing schemes for
biodiversity and water conservation of Brenta river”
How?
By creating synergies between water and biodiversity sectors:
integration of the drinking water planning with Natura 2000
through the application of the Environmental and Resource
Costs (ERC)
LIFE BRENTA 2030 PROJECT

32.
Forest infiltration areas to increase water table of the Brenta River
Basin

33.
Improved FM to avoid erosion and dam sedimentation (IT and FR)
Idro Ecomuseo delle Acque di Ridrac

34.
Forest management for Resilience to Wildfire in water catchments in Colorado (US)
www.outtherecolorado.com

35.
Art. 9 WFD “Recovery of costs for water services”
 polluter/user pays principle
Water tariff headings:
ENV costs: referring to the impact of the water service
on the environment and ecosystem
RES costs: referring to the missed opportunities of other
users as a consequence of the water service
E.g. Lowering of the
groundwater level
E.g. Land use and
agricultural practices
ENVIRONMENTAL AND RESOURCE COSTS (ERC)

36.
ENVIRONMENTAL AND RESOURCE COSTS (ERC)

37.
Forest owners
(supply)
Intermidiary
National & local
governaments
Water
buyer
International
institutions
Regulations
NGOs:
funding
and lobby
Universities:
design &
M&V
Farmers
associations:
win win
advice
AES
AES
Financial flows
No monetary flows
Hydrological services
PES usually are coupled with a «multiple benefit partnerships»

38.
KEY MESSAGES
1. Many protected areas are providing water-ES among the others
2. Valuing ES through the activation of PES schemes can increase the funding for
protected areas management
3. Innovative fundings can be drivers for the creation of new governance models
and create synergies among different sectors/ entities
4. The key (and the challenge) to enhance the governance of protected areas is the
cross-sector cooperation

39.
• Economics and governance of
payment schemes with a practical
view
• Case studies fact sheets
• The most complete and up to date
database (177 active schemes)

40.
Sustainability standards and certification systems can be used to
promote products, processes or services arising from FLR
practices and outcomes if they comply with specific
environmental/social requirements.
2. FSC ® ecosystem services certification
FSC Forest Management Certification + FSC certification of ecosystem services

41.
1. Compliance with Laws
2. Workers’ Rights and Employment Conditions
3. Indigenous Peoples’ Rights*
4. Community Relations
5. Benefits from the Forest
6. Environmental Values and Impacts
7. Management Planning
8. Monitoring and Assessment
9. High Conservation Values
10.Implementation of Management Activities
FSC-FM Certification: THE 10 PRINCIPLES OF FSC®
Social Impacts
Economic Impacts
Environmental Impacts
Source: FSC-STD-01-001 V5-2 EN 2015

42.
The Ecosystem Service Procedure (FSC-
PRO-30-006 V1-0) allows to certify forest
management positive impacts on
ecosystem services
The FSC® Ecosystem Service Procedure

43.
1. Prerequisites, Safeguards,
Context
2. Demonstration of Impacts
3. Benefits & Claims
Source: FSC-GUI-30-006 V1-0 EN
The FSC® Ecosystem Service Procedure

44.
• Ensure traceability,
transparency and visibility
• positive verified impacts
can be included into
strategies to reduce
company impacts (es:
climate-neutrality).
• Promote short-value
chain approaches
(alternative to carbon
credits, long-value chains)
The FSC® Solution: verified positive impacts
PAYMENT
Certified positive impacts
COMPENSATION
Certified ecosystem services
Local companies Measured negative impacts

45.
www.wownature.eu
How do we engage
with companies and
people?

46.
www.wownature.eu
• Since 2019
• FSC-certified projects in 6 Italian
regions and 3 countries
• Partners include more than 20 forest
managers representing 300
smallholders
• 200 private companies involved
• 20.000 citizens involved
• 5 million euros raised with ~70%
going to the ground
• 3,000 hectares of new FSC-certified
forests
https://www.wownature.eu/en/wow-areas/

47.
Forest Managers use FSC-ES Procedure because
:
• It rewards their daily efforts for responsible
forest management
• It encompasses different ecosystem services
• It provides a better (and the proper) price than
other rewarding instruments
• It fits for every type of forest and forest
manager (planting/improving/conserving/SLIMF
smallholders/indigenous)
• It does not harm the users’ and owners’ rights
over the forest (companies do not buy ecosystem
services, they support forest managers through
sponsorships)
• It does not conflict with timber and firewood
production.
Why We Use FSC-verified Impacts
Companies, governments, and citizens appreciate the
FSC-ES Procedure because:
•It is applied on top of the FSC-FM standards,
minimising the short- and long-term risks of
investment with comprehensive environmental, social,
and economic safeguards
•The FSC logo is well-known, widely recognized,
visible on the market and easy to communicate
•It is consistent, ensuring the same quality across the
globe
•No Hypocrisy: It is in line with the efforts to shift
towards bio-economy using FSC-certified materials

48.
3. BLENDED FINANCE

49.
3. BLENDED FINANCE: BioClima Public Private Partnership
The model:
1. A public grant of 3.5 mln to incentivise:
• forest biodiversity conservation and climate adaptation
measures
• private finance for conservation
2. Grant requirements for applicants:
• to measure ES impacts with the use of FSC FM + ES PRO
• have sponsor committed to support FSC ES
3. A technical assistance to support regional
parks:
• To identify the right interventions and carry out FSC
certification
• To find sponsors

50.
Public-Private Blended Finance Model
BENEFICIARIES
PRIVATE SECTOR
TECHNICAL ASSISTANCE
(ETIFOR)
Independent and
third-party
measurement and
verification of
ecosystem services
Target 1.5 M€ co-
finance
Economic valuation
of ecosystem
services
Technical
support
Flow of Capital
Flow of Services
BIOCLIMA INTIATIVE
3.5 M€ Regional Funds
Support for the
valuation of
ecosystem services
and securing
private co-finance
PROJECTS
Demonstration of
positive impacts on
ecosystem services
Lombardy Region
CARIPLO FOUNDATION
Target 5 M€

51.
Key results:
● 12 regional parks joined the initiative
● 3K hectares of conservation forests
have applied for FSC + FSC ES
certification
● 3.5 mln euro of sponsorships
confirmed + 3.5 public grant
BIOCLIMA: PUBLIC-PRIVATE-PARTNERSHIP 2022-2024
https://www.wownature.eu/bioclima/

52.
Conclusions: Fire prevention investment model
Sales of
ecosystem
services
Avoided
cost from
decresed
fire
probability
Investments
for FSL

53.
The case of wild mushroom collection fees in Borgotaro
• Borgotaro valley was the most productive place for wild mushrooms
in the Milan surrounding
• In 1964 it was introduced a fee in order to commercialize the
recreational wild mushroom picking
• Initially it was just a local regulation, but in
1993 it inspired the national law of wild
mushroom collection.

54.
The payment mechanism supports a special silviculture approach in
order to sustain the wild mushroom productivity of the forest for myco-
tourists.
Andamento della produzione fungina in base all'età dei popolamenti
0
1
2
3
4
5
6
0 10 20 30 40 50 60 70
valore
di
produzione
Valore
Poli. (Valore )
Forest service
Financial means
Customer
Prod.
Payment
for
recreational
WM
picking
Investments
for
WM
production
in
Borgotaro
forests

55.
m = intensity of forest management
c = control by local police or forest guards
a = access to the forest
Pfee = f(m,c,a)
Examples:
• 6 €/dd in white area
• 15 €/dd in green
area
• 22 €/dd in brown
area
How is the price set?

56.
Available for android here: https://play.google.com/apps/internaltest/4700275190889108392
iOs version is forthcoming
E-ticket
Trace me Report
Paths
News
Maps
Rescue
system
Actual stage of implementation:
Implementation year 1964
13000 ha forest surface
0.1-0.2 M WM pickers
0.4-1.2 M€ turnover
Events:
E-ticket for selling picking permits App.
for selling & rescuing (May)
App as tool to trigger the dialog among
forest owners
Challenges:
New data to increase the wild
mushroom production in forest and
manage the user in the forests.
Payment evolution: revenues based
on the actual use od the single forest
New way to sell the ticket

57.
• Good governance is a pre-requisite for a funding/financing
strategy
• Integrated financial strategy responds to different
landscape needs, in relation to level of risks, innovation and
involved actors
• Market and blended finance approaches can integrate
traditional funding, market forecast are very positive!
• Existing systems may be complex, need to partner with key
consultancy/NGOs that can support the implementation
and leverage the local demand for ecosystem services
Conclusions