Cloud forest assets: financing a valuable nature-based solution

This report finds that of the 979 hydropower dams currently operating in the 25 cloud forest countries, more than half depend on water from cloud forests, representing billions of dollars of electricity production that take nature’s ecosystem services for granted. ‍ Figures in the report suggest that cloud forests are crucial assets in the net zero transition and should be protected, yet many cloud forest countries are amongst the world’s poorest economies, facing the prospects of debt distress after the Covid-19 pandemic and the spiralling costs of food and energy imports. They will find it increasingly difficult to prioritise climate and biodiversity in the face of growing economic challenges. ‍Based on its findings, the report sets out proposals, developed in collaboration with banks, investors and natural-asset experts, to enable cloud forest countries to turn the protection of their forests into an income-generating initiative by creating new sustainable income streams that can bundle carbon sequestration with the water services that cloud forests provide.