Despite the dominant trends toward farm consolidation and cheap food policies in California, there are many examples of producers who are adopting regenerative on-farm practices and supporting organizations that assist small, beginning, and sustainability-focused farmers to thrive in a challenging environment. Sustainability innovations profiled in this case study are variously related to the three broader concepts of socioecological systems, integrated landscape management, and rural-urban interface. After reviewing these concepts, this case study presents the main barriers to sustainable farming and sustainable food systems, which are identified in interviews with producers. This case study then profiles illustrative examples of economic, social, and environmental innovations at the farm and institutional levels, which have achieved success at overcoming these barriers and are sufficiently documented for sharing and scaling-up impact. Producer innovations to reduce climate and market risks are then classified on a scale continuum. Finally, this case study presents the diverse types and qualities of support available to sustainability-focused farmers and ranchers in California, with clear policy implications for broadening and deepening this support.

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Traditional funding strategies of grants, congressional appropriations, and income from timber sales are insufficient to complete the level of forest restoration necessary throughout California. Stimulating investment into markets for low-value biomass—such as tops and branches of trees, small trees, and dead trees—will add value to forest raw materials and provide additional revenue streams to pay for forest restoration. We evaluate the investment potential of products made from low-value biomass using a discounted cash-flow analysis of several possible forest products including fuels and nonfuels under various climate policy and market scenarios. We demonstrate the carbon benefits provided by these products, attributed to their substitution for fossil-fuel feedstocks and long-term carbon storage. Our work finds that there is an opportunity to develop several highly profitable products, most notably fuels, many of which are eligible for energy and climate policy programs such as California's Low Carbon Fuel Standard and the federal Renewable Fuel Standard. Nonfuel products have an average internal rate of return (IRR) of 13 percent, whereas fuels have an average IRR of 19 percent in our baseline scenario. Although products ineligible for government incentives are generally less profitable, income from the voluntary carbon market greatly increases the IRR. Fostering investment into these products can encourage critically needed funding for forest management while developing a high-impact carbon removal solution enabled by state, federal, and voluntary climate initiatives. On this basis, we conclude that climate policy can support forest restoration in California.

<p>Sitting at the intersection of knowledge production and project implementation, our work as conservation finance project developers leverages economic and other benefits of environmental restoration to attract new and diverse funding sources for nature-based solutions (NBS). Our work supports project activities ranging from variable density thinning and prescribed burning to low-tech and process-based riparian restoration. In our experience, NBS presents a powerful, cost-effective opportunity to create scaled improvements in ecosystem function. However, funding NBS projects can be challenging, as some NBS outcomes are only achieved through large-scale landscape restoration, which is expensive, or are realized gradually over a period of time following restoration activities. Conservation finance is one tool that can catalyze meaningful NBS work at scale by providing the necessary upfront capital for projects while contracting funding commitments based on outcomes over time. Using several examples of successful NBS projects, we present a process-based, multiple-benefit framework to demonstrate how NBS can be leveraged to increase funds and enable financing. This framework is grounded in western U.S. forest management to address catastrophic wildfire, but can be applied in other regions and for other types of restoration activities. This approach addresses the logistical, governance, and sociocultural challenges we have encountered to leveraging NBS within a conservation finance framework. We also propose future avenues of research to help increase investment based on NBS. These include formalizing metrics for measuring and monitoring of different NBS activities, managing the uncertainty and expectations around outcomes of NBS projects, and incorporating the future impacts of climate change into NBS models and planning. By describing this work in a U.S. context, we hope to catalyze a discussion about how the needs and opportunities identified in our projects can inform work in Europe and vice versa.</p>