Traditional philanthropy and government funding had played a key role in conserving and restoring our rivers and streams. Ultimately, however, this funding has not been sufficient to combat the depletion of these valuable resources which has taken place over the past several decades. In fact, it is unlikely that such funding will ever be adequate, making it critical to begin looking for new ways to pay for river and stream restoration. The Freshwater Trust, an organization dedicated to restoring every river and stream, believes environmental markets are a promising way to engage private capital and encourage new investment in conservation.
The Freshwater Trust (TFT) was founded in 1983 with a mission to preserve and restore freshwater ecosystems by: delivering high-quality habitat and stream restoration projects; developing replicable market-based models for watershed-scale restoration; and creating a sustainable business model that can provide funding for stream restorations in the Pacific Northwest, with future potential nationally. Over the last five years, TFT has worked with conservation organizations and regulators to build out innovative water quality credits that calculate and quantify the ecological recovery achieved through environmental restoration projects. In this way, TFT is able to create water quality credits that can be traded or purchased by wastewater treatment facilities, power plants, developers, and other entities that need to meet regulatory compliance requirements and mitigate negative environmental impacts. The purchase of these credits is then used to finance environmental interventions by landowners or NGOs – such as planting trees near rivers and streams to filter water and lower water temperature. This solution is a win-win since these natural restoration methods offer greater environmental benefits at a significantly lower cost than traditional engineering interventions that are currently used.
The Packard Foundation, along with the Gordon and Betty Moore and Kresge Foundations, partnered to create a co-loan to provide this growth capital to the Freshwater Trust through Program-Related Investments (PRIs) totaling $5 million. Originally structured as a Mission-Related Investment, which has a profit component, the foundations determined early on that a PRI would allow TFT to scale thoughtfully without the pressure of providing a return on investment. This co-loan is expected to enable TFT to solidify and grow its water quality trading program in the Pacific Northwest, to potentially use as a model for other parts of the country.
The investment will enable the Freshwater Trust to conserve and restore freshwater systems at a significant scale throughout the West, also helping to address ecosystem changes brought on by climate change. While these credits will be initially focused on reducing water temperature through tree plantings and other stream restoration activities, they could later include nutrient, nitrogen and phosphorous loading, enhancement of salmon habitat, and hydropower mitigation. In addition to cooling waterways, stream side plants absorb runoff; limit sediment; provide habitat for birds and other species; beautify landscapes; and improve air quality and carbon footprint.