Loading...
Investing in Natural Capital: Lessons from the American West
Bennett, Drew E. Wulf, Jocelyn
Bennett, Drew E.
Wulf, Jocelyn
Abstract
Innovative approaches to conservation finance are gaining momentum as a means to protect and invest in natural capital— the stock of natural assets that provide essential services and form the ecological infrastructure underpinning both human wellbeing and economic resilience. Despite the immense value of natural capital, it is often undervalued, underprioritized, and inadequately invested in within mainstream economic and policy decision- making. This disconnect has prompted interest in developing more holistic and targeted investment models to sustain or enhance natural capital.
In this report we present a comparative analysis of four natural capital investment initiatives in the American West, examining their financing structures, governance models, and ecological and economic outcomes. Through interviews with key stakeholders and analysis of project documents, annual reports, feasibility studies, and media coverage, we investigated what makes these investments viable or vulnerable, successful or stalled.
The four cases include: Blue Forest’s Yuba I Forest Resilience Bond,
which launched a blended capital to fund to accelerate forest
restoration and reducing wildfire risk; the May Ranch conservation
easement and carbon credit project, which integrated permanent
land protection with carbon market participation; Quantified
Ventures’ Environmental Impact Fund for wildfire mitigation, an ambitious but ultimately unlaunched pay-for-success model; and the Teton Basin Water Users Association’s incidental aquifer recharge initiative, which has sustained voluntary participation despite the envisioned water market having not yet materialized.
The findings reveal five key insights. First, the strategic deployment of different types of capital is crucial. Successful initiatives blended philanthropic, public, and private capital to balance risk, attract partners, and sustain long-term efforts. Second, “sufficient science”— credible, actionable ecological data that supports decision-making despite uncertainty — was critical for building trust and justifying investment. Third, social capital emerged as foundational; strong networks of trust and collaboration often enabled collective action even in the absence of robust financial incentives. Fourth, scale mattered. Projects that designed interventions to cross ecological and economic thresholds, such as landscape-level forest treatments, were more likely to generate measurable benefits and justify continued investment. Finally, structural limitations persist. Many projects rely on philanthropic or public funding, and success often depends on unique legal, ecological, or institutional conditions that limit replicability across geographies and contexts.
These findings suggest that natural capital investments represent promising but contextual solutions that work best when thoughtfully aligned with local conditions and designed as integrated socio-ecological initiatives rather than purely financial mechanisms. While they cannot entirely overcome the fundamental challenge that many ecosystem services remain economic externalities, they offer valuable pathways to channel more resources toward conservation and restoration when enabling conditions exist.
Description
Date
2025-07-01
Journal Title
Journal ISSN
Volume Title
Publisher
Unversity of Wyoming Libraries
Research Projects
Organizational Units
Journal Issue
Keywords
Conservation,Natural Capital,Natural Resources,Environmental Economics,Ecological Economics,Conservation Finance