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Evolutionary-Adaptive Finance

A flow in three rows of boxes. Across the top, left to right: landscape restoration, decided by the Site Stewardship Committees (forest thinning, watershed repair, holistic grazing and soil health); physical infrastructure, where biochar and biomass facilities turn restored materials into useful products and services, with local jobs and economic development; offtake contracts, tier 1 of the net new revenues (biochar, renewable energy and heat, carbon credits with verified co-benefits); risk management by insurers and reinsurers, who guarantee the early financing and insure the work against measured events; and investors: transition capital first, refinanced by bonds, then institutional capital for the long term, each entering as the land recovers. The offtake contracts, the insurers and the investors feed evolutionary-adaptive finance: as ecosystems recover, more value is created, returns increase, and more capital flows in. Its five dimensions: finance driven by ecological processes, each instrument entering and exiting on biological milestones, not calendar dates; parametric insurance coupled with project finance, insurers guaranteeing the early years, which lowers the cost of financing; downstream OpEx coupled with upland stewardship, every dollar a plant spends fighting sediment being a dollar better spent upland; investing coupled with governance, the Regional Renewal Corporation, third signatory to every contract, releasing capital on verified work; and pooled upstream CapEx, the towns, plants, acequias and insurers that run on the same water funding the work together. The finance pays for the work upland, which brings ecological benefits (reduced wildfire risk, more water in streams, healthier soils and forests, greater biodiversity), verified seasons ahead of the ecological response through two-speed monitoring, reporting and verification. The benefits reach the downstream beneficiaries: cleaner water, lower treatment costs, reduced flood risk, healthier people and economies. Under tiered contracts, tiers 2 and 3 of the net new revenues, downstream counterparties pay for verified cost reductions and ecosystem services: water supply, water quality, fire and habitat. The contract revenues carry the finance, and through the shared revenue pool they return upland, where an established operation pays for the next. Landscape Restoration○ Decided by Site Stewardship Committees Physical Infrastructure○ Offtake Contracts○ Net new revenues, tier 1 Risk Management○ Insurers / Reinsurers Investors○ Evolutionary-Adaptive Finance As ecosystems recover, more value is created, returns increase, and more capital flows in. Finance driven by ecological processes Parametric insurance coupled with project finance Downstream OpEx coupled with upland stewardship Investing coupled with governance Pooled upstream CapEx Ecological Benefits○ Upland Landscapes Downstream Beneficiaries○ Tiered Contracts○ Net new revenues, tiers 2 and 3 Shared revenue pool: contract revenues return upland, and an established operation pays for the next.
A flow in three rows of boxes. Across the top, left to right: landscape restoration, decided by the Site Stewardship Committees (forest thinning, watershed repair, holistic grazing and soil health); physical infrastructure, where biochar and biomass facilities turn restored materials into useful products and services, with local jobs and economic development; offtake contracts, tier 1 of the net new revenues (biochar, renewable energy and heat, carbon credits with verified co-benefits); risk management by insurers and reinsurers, who guarantee the early financing and insure the work against measured events; and investors: transition capital first, refinanced by bonds, then institutional capital for the long term, each entering as the land recovers. The offtake contracts, the insurers and the investors feed evolutionary-adaptive finance: as ecosystems recover, more value is created, returns increase, and more capital flows in. Its five dimensions: finance driven by ecological processes, each instrument entering and exiting on biological milestones, not calendar dates; parametric insurance coupled with project finance, insurers guaranteeing the early years, which lowers the cost of financing; downstream OpEx coupled with upland stewardship, every dollar a plant spends fighting sediment being a dollar better spent upland; investing coupled with governance, the Regional Renewal Corporation, third signatory to every contract, releasing capital on verified work; and pooled upstream CapEx, the towns, plants, acequias and insurers that run on the same water funding the work together. The finance pays for the work upland, which brings ecological benefits (reduced wildfire risk, more water in streams, healthier soils and forests, greater biodiversity), verified seasons ahead of the ecological response through two-speed monitoring, reporting and verification. The benefits reach the downstream beneficiaries: cleaner water, lower treatment costs, reduced flood risk, healthier people and economies. Under tiered contracts, tiers 2 and 3 of the net new revenues, downstream counterparties pay for verified cost reductions and ecosystem services: water supply, water quality, fire and habitat. The contract revenues carry the finance, and through the shared revenue pool they return upland, where an established operation pays for the next. Landscape Restoration Decided by Site Stewardship Committees Forest thinning Watershed repair Holistic grazing and soil health Physical Infrastructure Biochar and biomass facilities turn restored materials into useful products and services. Local jobs and economic development Offtake Contracts Net new revenues, tier 1 Biochar (soil, filtration, etc.) Renewable energy / heat Carbon credits with verified co-benefits Risk Management Insurers / Reinsurers Guarantee the early financing and insure the work against measured events, which reduces risk, unlocks capital, and lowers the cost of financing. Investors Transition capital first, refinanced by bonds, then institutional capital for the long term, each entering as the land recovers. Evolutionary-Adaptive Finance As ecosystems recover, more value is created, returns increase, and more capital flows in. Finance driven by ecological processes Each instrument enters and exits on biological milestones, not calendar dates. Parametric insurance coupled with project finance Insurers guarantee the early years, which lowers the cost of financing. Downstream OpEx coupled with upland stewardship Every dollar a plant spends fighting sediment is a dollar better spent upland. Investing coupled with governance The Regional Renewal Corporation, third signatory to every contract, releases capital on verified work. Pooled upstream CapEx The towns, plants, acequias and insurers that run on the same water fund the work together. Ecological Benefits Upland Landscapes Reduced wildfire risk More water in streams Healthier soils and forests Greater biodiversity Verified seasons ahead of the ecological response, through two-speed monitoring, reporting and verification Downstream Beneficiaries Cleaner water Lower treatment costs Reduced flood risk Healthier people and economies Tiered Contracts Net new revenues, tiers 2 and 3 Downstream counterparties pay for verified cost reductions and ecosystem services: Water supply Water quality Fire Habitat Shared revenue pool: contract revenues return upland, and an established operation pays for the next.

We are setting up a regional partnership of public agencies and private partners (a public-private partnership), with rules built to hold through changes in government and economic downturns. It pays for the work in step with the land’s recovery, which we call evolutionary-adaptive finance. It works on three fronts:

  • Pooling money for the work upstream (capital expenditure, or CapEx). The 40-plus towns and the dozen water and power plants in the foothills put money together for restoration in the mountains. So do the acequias, insurers and businesses that depend on the same water.
  • Spending downstream budgets on the land upstream. Every dollar a water plant spends from its running costs (operating expenditure, or OpEx) removing mud and silt from its water is better spent keeping that soil on the hillside. Public and regulated utilities can pay for this through contracts or a small share of customers’ rates, the way they already pay to keep trees clear of power lines.
  • Insurance that pays out on a measured event (parametric insurance), alongside payment for the prescribed work (project finance). It pays a set amount as soon as something measurable happens, such as a fire of a certain size, without a long claims process.

Early money from the state and from companies (catalytic capital) gets the work started. Long-term contracts with the water users downstream keep it going. Once the work upstream is under contract and checked, the water supply becomes something a lender can count on. That makes the plants cheaper to finance and to insure (they are re-rated). As the contracts prove themselves, the region can borrow through tax-exempt bonds, the same kind that pay for water and power plants. Pension funds and development banks (development finance institutions) then supply the long-term money for risks that last 30 years. That is what puts the communities on the front line, and the region with them, back on solid financial footing (solvency and credit strength). People respond to good business conditions more than to mandates. The approach can be repeated elsewhere, but trust cannot; it has to be built locally and regionally, in person.

Our approach to finance follows the same principles of adaptation and learning that guide cultural and ecological systems. Rather than committing capital according to a fixed schedule, we use six kinds of financing (financial instruments) that come into play as the landscape recovers and the regional economy develops.

How the finance and the governance connect

Capital Stack

Each instrument enters and exits on biological milestones, not calendar dates.

First-loss transition capital carries the early years, when the work is underway but nothing is producing yet. A long-term bond refinances it once the land is productive. Institutional capital takes the durable position after that. Each layer is sized so the early risk sits with the parties built to hold it.

Develop

12-24 months

Transition

~1 year

Stabilise

~2 years

Scale

Ongoing

Transition Facility

State grants and cost-share · corporate pre-purchase · development finance

Deployed
Absorbing risk

Absorbed or recycled into next site

Insurance Guarantee

Letter of credit · bond guarantee

Guarantee active
Policy repriced

Industrial Revenue Bond

Municipal bond · long-term senior debt

Structuring
Drawn down · coupons paid from a reserve funded at close
TF exits · IRB reprices
Exiting

Working Capital

Revolving credit · community lender

First revenue
Draws against invoiced sales
Revenue-funded

Innovation Fund

Alongside venture capital · higher-grade biochar materials and fuels

Scoped
Milestone-gated draws

Graduation gate: proven operator + signed offtake

Graduates into the contracted stack

Institutional Capital

Pension fund · sovereign wealth · infra PE

Entry gate
Primary governance · long-duration yield

Trigger events

The baseline is set, LandStack is running, the bond is structured and first-loss capital is in place.

Verified data is flowing, the first recovery threshold is met, biochar brings in its first revenue and working capital opens.

After 3 consecutive months above threshold, the bond is refinanced at a lower cost of capital and commercial investors can enter.

The region runs without subsidy and the approach moves to the next region.

Transition Facility

State grants and cost-share · corporate pre-purchase · development finance

Develop

Deployed

Transition

Absorbing risk

Stabilise

Absorbed or recycled into next site

Insurance Guarantee

Letter of credit · bond guarantee

Develop

Guarantee active

Transition

Stabilise

Scale

Policy repriced

Industrial Revenue Bond

Municipal bond · long-term senior debt

Develop

Structuring

Transition

Drawn down · coupons paid from a reserve funded at close

Stabilise

TF exits · IRB reprices

Scale

Exiting

Working Capital

Revolving credit · community lender

Transition

First revenue

Stabilise

Draws against invoiced sales

Scale

Revenue-funded

Innovation Fund

Alongside venture capital · higher-grade biochar materials and fuels

Develop

Scoped

Transition

Milestone-gated draws

Stabilise

Graduation gate: proven operator + signed offtake

Scale

Graduates into the contracted stack

Institutional Capital

Pension fund · sovereign wealth · infra PE

Stabilise

Entry gate

Scale

Primary governance · long-duration yield

Trigger events

Develop

The baseline is set, LandStack is running, the bond is structured and first-loss capital is in place.

Transition

Verified data is flowing, the first recovery threshold is met, biochar brings in its first revenue and working capital opens.

Stabilise

After 3 consecutive months above threshold, the bond is refinanced at a lower cost of capital and commercial investors can enter.

Scale

The region runs without subsidy and the approach moves to the next region.

Reducing Downstream Risks and Costs

More frequent, more extreme hazards are breaking the models

New Mexico is faced with more frequent and more extreme hazards. Fire, drought, storms and floods are insured separately as if they were unrelated, yet they are not.

Landscape-scale renewal works

Upstream nature-based solutions, pairing the wisdom of the land of Indigenous, Pueblo and Hispano communities with proven ecology and fire expertise, can gradually tame catastrophic fires, replenish the mountains' water tables, and reduce the cost of the downslope and downstream engineered solutions, starting with water treatment plants facing rising costs from sediment and contamination.

No single entity can do this alone

Not the federal government: $50M thinning contracts are being let on the Carson Forest without the stewardship that keeps the trees from growing back, and the $5.45 billion Congress appropriated after Hermits Peak went to compensation, almost none to prevention.

Coordinated at scale, financed for the long term

Ultimately this is about the solvency and credit strength of the frontline communities: the towns, counties, pueblos, acequias, farms and ranches on the foothills of the range that live with the fire risk, run on the water, and carry the cost of the plants and critical infrastructure that keep both going.

A village of tin-roofed houses below snow-capped peaks and slopes of golden aspen.
Truchas, New Mexico, with the Sangre de Cristo Mountains behind.

Upland Community-led Nature-based Solutions

Beyond extraction to renewal.

New Mexico receives billions of dollars annually from oil and gas production in the Permian Basin, yet faces mounting costs from wildfire, flooding, declining water supplies, and the deterioration of its forests and watersheds. The Sangre de Cristo Mountains form the headwaters of three major river systems—the Rio Grande, Pecos, and Canadian—that sustain communities, agriculture, and industry across New Mexico and neighboring states. Through the State Investment Council, New Mexico already converts revenues from finite oil and gas reserves into lasting financial wealth for future generations. Why not extend this same principle to the natural systems on which the state’s long-term prosperity depends? Investing a portion of today’s mineral wealth in restoring forests, watersheds, and rural economies would build another form of enduring wealth—one that improves water security, reduces disaster costs, creates sustainable livelihoods, and strengthens the ecological foundations of the state’s economy long after oil and gas production declines.

Net New Revenues

Catalyzing net new revenues to secure regional resources and economic development.

Tier 1

Offtake contracts

Restoration generates products and services that can be sold through long-term contracts, including biochar for restoration, mine reclamation, regional farms, ranches, and feedlots; energy from biomass processing for the grid and local users; filtration media for municipal water systems as a lower-cost alternative to imported activated carbon; and compost to improve agricultural and forest soils.

Tier 2

Cost reductions

Much of the value of restoration comes from reducing costs that governments, utilities, insurers, and landowners already bear.

Tier 3

Ecosystem resources security

As landscapes recover, they generate additional benefits that can be measured and paid for by those who receive them.

Underwriting

We bring together ecological, operational, and financial information in a shared system that allows investors, insurers, banks, and buyers of ecosystem services to understand how restoration is progressing and where their money is going. This provides the evidence needed to assess risks, structure financing and insurance, and release funds as work is completed and ecological improvements are verified.

Risk Tower

A parametric insurance tower protects the project against what actually threatens this landscape: fire, drought, and the loss of water. We do not just insure against them. The work on the ground reduces them, and lower risk is what makes insuring a whole landscape possible in the first place.

Scenario Modeling

Before any capital commits, we run the landscape forward under different fire, water, and market conditions, so the people putting money in see the range they are stepping into, not a single hopeful line.

Measurement and Verification

Every intervention and its effect on the land is measured continuously, before the farm gate, by our partner Merge Impact: from the thinning crew through the biochar to the water held in the soil.

LandStack

LandStack runs the field operations, the logistics, and the underwriting as one system, so every party financing the work is reading the same ground truth at the same time.

Sovereign Land, Finance