Financing sustainable land use at scale: The smart Inari approach
By Lou Munden
In May of 2011, my staff and I began to examine a really interesting finance challenge – smallholder agriculture projects in Africa. Our question was simple: how could we connect those projects with reliable sources of capital?
The scope of inquiry expanded over time and, to make a very long story short, we eventually concluded that the real problem we were trying to address wasn’t limited to just smallholder agriculture or sustainable forestry or wetlands preservation.
Instead, it was the much broader issue of how to finance sustainable land use at scale. Today I’m happy to share a proposal – Inari – that’s designed to solve these problems. You can read about it in more detail at this link from FAO.
As you’ll see, Inari is the fruit of collaboration with leading sustainability, development and governance experts. We tried as hard as we could to include all the “externalities” that aren’t usually up for consideration, and that meant finding people that knew a lot more than we do about those topics.
We decided to do this because we thought it vital to take a ground-up approach to finance; this was infinitely more complicated and time consuming when compared to the way financial systems are usually built. And in many ways, it was a curious effort for a private company like ours to make.
I’m writing this post to explain why I think that was a smart choice for us. What I hope this will do is push you to lend a hand because, as we say in the paper, Inari needs help to get moving. And my guess is that a good number of you can provide it.
So, back to the question: why was this a good choice, anyway?
The answer has less to do with meeting our business objectives and more to do with confronting the two major challenges we face as humans: environment and development. This is no small matter; not only do we have to figure out how to keep the planet as a livable sphere, but we also need to make sure all of us living on that sphere have a fair shot at a decent livelihood.
The fight to achieve those outcomes actually predates the financial crisis by many years, but still, I think the parallels between our current state of affairs and the period before the financial crisis are striking.
Then, as now, the warning signs were completely clear to anyone willing to examine them. Yet the short-term self-interest of a few outweighed the best interests of the majority.
That’s why in the period before 2008, the thousands of decision-makers who could have done something about the financial crisis couldn’t seem to get on the same page about actions to take. And in my own country, the United States, there was precious little support for doing anything at all. Sound familiar?
I’m convinced the similarities won’t stop there. As anyone in finance who remembers Lehman Brothers will tell you, a self-interested impetus to do nothing at all can easily transform into a self-interested impetus to do everything at once. In a very short period of time, environment and development will go from being low political priorities to the political priorities.
It’s important to understand just how different the world will look when this happens. The major shift is people’s timeframes: much as was the case after Lehman Brothers collapsed in September of 2008, there will be little room for theory or debate. Our leaders will have to make decisions that are not only good, but also implementable immediately, and with the greatest possible impact.
And remember that, just as was the case in 2008, those leaders may have very little familiarity with the problems we face. In fact, there are even fewer leaders familiar with sustainability or development than there are leaders familiar with finance. This means that the major decisions will only be as good as the input and information these future leaders receive – as they say in software development, “garbage in, garbage out”!
This brings me back to sustainable land use. Along with our collaborators, we saw how different, varied land use operations could be networked together to drive sustainable outcomes at scale. What’s more, we think the resulting design will do this far more elegantly and effectively than some big, top-down solution.
But future decision makers won’t just take us at our word. We need to find ways to show how this works in practice. And that demonstration can’t just be in one or two places, but lots of them, and lots of them at the same time. Otherwise, the entire concept will be dismissed as too small to make a difference.
Now it’s time to figure out the specifics: how should this work on the ground? What’s the right way to test our premises? Who should be involved in that process?
There are more than a few kinks to iron out in that process, to be sure. Still, the good news is that many experts have already expressed interest in helping us and we think that help can translate to results by 2014.
Participating in a collective process with ambitious results made this project well worth taking on, and well worth continuing to pursue.
Lou Munden is co-founder of the Munden Project, www.mundenproject.com
For more information see Inari: a proposal for financing sustainable land use at scale