By Timothy Cama - 05/29/14 10:42 AM EDT
The United States Agency for International Development (USAID) said Wednesday it will back $134 million in loans from an organization that seeks to reduce deforestation in Latin America, Africa and Asia.
Secretary of State John Kerry announced the move to cover half of any future losses for the Althelia Climate Fund in a video message at the Carbon Expo conference in Germany. The program’s forest preservation efforts will result in a carbon dioxide emissions prevention equivalent to taking 18.5 million vehicles of the road for a year, the State Department said.
Althelia is the first private-sector fund to attempt forest preservation at this level, USAID said.
Businesses involved in activities such as ecotourism and agroforestry receive commercial loans, which would allow them to expand. USAID hopes this will discourage deforestation.
These companies can also receive credits through a voluntary carbon credit system that they could sell to other companies.
“Over 1.5 billion people rely on forests to meet their day-to-day needs, and the majority of these are poor rural communities, including some 60 million indigenous people,” USAID Administrator Rajiv Shah said in a statement. “By creating incentives to better manage these forests, we provide a pathway out of extreme poverty for families who depend on forests while helping preserve critical ecosystems.”