Dedicated financial bonds can help capture economic value of cloud forests in 25 countries: Report

Subject : Geography

Context:

A report titled Cloud Forest Assets Financing a Valuable Nature-Based Solution released by Earth Security, a global nature-based asset management advisory firm.

Cloud forests:

Cloud forests are the forests that are on top of the tropical mountains.
Cloud forests, also called Montane rainforests, are vegetation of tropical mountainous regions in which the rainfall is often heavy and persistent condensation occurs because of cooling of moisture-laden air currents deflected upward by the mountains.
These forests occupy a limited area and are under great threat and their hydrological function is of existential value to millions of people living downstream.
Just 25 countries hold 90 per cent of the world’s cloud forests that capture moisture from the air, providing fresh and clean water to people and industries below.
Countries build hydroelectric power plant which uses water from these forests.

Countries having cloud forests:

These twenty-five countries are Indonesia, Tanzania, Democratic Republic of Congo, Colombia, Peru, Venezuela, Mexico, Papua New Guinea, Brazil, Ethiopia, Ecuador, Cameroon, Bolivia, China, Laos, Kenya, Malaysia, Angola, Uganda, Madagascar, Philippines, Gabon, Vietnam, Republic of Congo and Myanmar.

Cloud forest bond:

The bond will provide these governments with financial actors like philanthropy, public finance and private investment to capture the economic value of the ecosystem services of the cloud forests.
Such a tool will encourage carbon storage and provide funding to set up sovereign-level carbon finance schemes as well as payments for ecosystem services.
The Cloud Forest Bonds will allow the developing countries to improve their debt position and fund the creation of new, long-term income streams from services provided by nature.
These bonds can be in the form of new bond issuances, debt-swaps and results-based financing instruments, which are matched to the circumstances of each of the twenty-five countries.