July 2011, saw the official launch of the “Livelihoods Fund”. This fund is a carbon investment fund that provides investors access to carbon credits with an assurance on biodiversity and community development through large-scale and high social impact projects.

Rural communities living in tropical countries are facing threats to the ecosystems such as coastal wetlands and forests ecosystems destruction, from overexploitation of natural resources and demographic pressure. Among the 1.2 Billion people who suffer from malnutrition in the world, a majority of them are farmers, small breeders, fishermen and indigenous people who are poor and whose resources are part of the biological diversity within which they live. Efforts to maintain and restore these ecosystems form a vital cornerstone of the fight to mitigate climate change, to eradicate poverty and provide food security to the most vulnerable people.

The Livelihoods Fund addresses this challenge through an innovative approach to carbon offsetting in the form of a mutual fund that provides upfront investment to projects that will bring significant environmental and social benefits. In return, companies that have invested in the Fund will receive high-quality carbon credits that they can use to offset the emissions they have not managed to reduce yet.

The fund now unites 7 major investment companies: Danone, Credit Agricole, Schneider Electric, the French Post, CDC Climat, Hermes International and Voyageurs du Monde with a combined endowment of 30 million Euros and is expected to generate 6-11 million tonnes of carbon credits/year within a tenure of 23 years.

Projects under the Fund are centred on developing countries and are vetted by an Advisory Board. The fund envisages taking on 3-4 projects within each of its three programmes: 

  1. Ecosystem restoration and preservation
  2. Agro-forestry with soil restoration
  3. Rural energy development that will reduce deforestation.

The Fund is particularly interested in investing in large-scale projects which deliver certified carbon credits (through the Clean Development Mechanism or the Voluntary Carbon Standard). All the projects are selected according to their potential to be scaled up and provide benefits to local communities and biodiversity.

Enhancing biodiversity

In 2009, the Fund invested in its first project in Senegal, an ecosystem restoration and preservation project helping 450 villages to replant 10,000 hectares of land with mangroves. The project aims to capture a total of 900,000 tons of carbon over 20 years and will rebuild a food ecosystem that produces fish and protects crops.

A second pilot project began in 2010 in Sunderbans, in India. The project is working on restoration of mangroves to generate carbon credits and is contributing to improved condition for the rural poor by provision of additional food sources and by protection of their habitat from marine encroachment. 1,000 hectares of mangroves were planted in 2010, 2,000 hectares in 2011 and an additional 3,000 hectares in 2012.

Ecosystem restoration

In Andhra Pradesh, in India, the local communities from Araku Valley have implemented a large programme to plant fruit trees, as part of a pilot project funded by the Livelihoods Fund. In addition to revenues coming from coffee, (which is currently the primary cash crop grown in the valley) fruit from the Araku valley will in future bring food resources and revenue. The project envisages developing a functional forest that will not only provide ecosystem services but will also generate revenues by supplying marketable forest products to local people. 3,700 hectares of land have already been planted since 2010.

In Ibi Bateke, Democratic Republic of Congo, the Fund is working with the regional telecom corporation Novacel to plant acacia and to cultivate cassava, a staple food crop in the region. Cassava is harvested after 18 months for food whereas acacia has a dual function in production of carbon credits and as a source of sustainable charcoal. The project, involving 20 villages, has already restored 2,400 hectares of land on a program of 4,200 hectares, created local jobs, mitigated deforestation and established markets for local people.

Improving food security

One of the founding principles of the Fund is its recognition of the close link between poverty reduction, food security and sustainable ecosystems. Whether it is the vital role played by mangroves in sustaining local fisheries or the use of fruit trees in the mix of species in agroforestry development, addressing food security issues is a key component in achieving community ownership of projects as well as project sustainability.

Sharing experiences

In 2012, the Livelihoods Fund, IUCN and Ramsar have convened field practitioners working on mangrove and agroforestry restoration at three important events in the biodiversity conservation calendar: The Ramsar Conference of Parties (Bucharest, Romania), the IUCN World Conservation Congress (Jeju, South Korea) and the UN CBD Conference of Parties (Hyderabad, India). Further to interactive workshops at the events mentioned above, the Livelihoods Fund has organized a 3-day Livelihoods Camp in October 2012, in Araku, not far from Hyderabad. The event aimed to go deep into the subject matter by encouraging an exchange of best practices, tools, experiences and approaches to thereby strengthen the Livelihoods Network, which extends beyond the existing project portfolio to include other restoration projects with similar goals.

For more information on the Fund, please go to: www.livelihoods.eu  

IUCN contacts:

Livelihoods Venture contacts: