An IFAD innovation case for Asia Pacific Inclusiveand Sustainable Rural Transformation: Climate-smart, Tree-based, Co-investment in Adaptation and Mitigation in Asia (Smart Tree-Invest)

Smart Tree-Invest was the first project to test co-investment in ecosystem services’ schemes that were a combination of climate-change mitigation by, and adaptation for, smallholders. Smallholders, through sustainable farming practices, increased the provision of ecosystem services in production landscapes, benefiting downstream communities. As a return, these downstream — public and private — communities invested financially or in-kind to ensure that the smallholders received incentives to continue their practices while at the same time increasing the smallholders’ resilience to shocks. Previous piloting of payment for ecosystem services’ schemes targeted mostly private investors. However, in most upstream, dryland production landscapes in Asia, private investment was lacking if not non-existent. Thus, rather than focusing on private investors, Smart Tree-Invest targeted public funds and how these funds could support co-investment in ecosystem services’ schemes, such as when governments design development programmes that must meet indicators for ‘green’ development.