Mexico’s forests are an important contributor to the national economy, in terms of their provision of raw materials for productive sectors and rural livelihoods of more than 30 million people, as well as the delivery of critical ecosystem services. However, between 2012 and 2016 the forestry sector, on average, contributed only 0.2% of the national GDP. Furthermore, the country has long experienced high rates of deforestation and forest degradation, resulting in significant greenhouse gas emissions.

In 2011, the CIF, through the FIP, partnered with the government of Mexico to address key drivers of deforestation and forest degradation. These efforts have made considerable progress in addressing these drivers as well as advancing Mexico toward a low-carbon, climate-resilient future. The FIP approach, encompassing a country-led design, a highly participatory investment planning process, and adaptability in response to changing circumstances, has been particularly relevant to contributing to transformational change.

Progress has been made on key issues such as cross-sectoral coordination, gender mainstreaming policies within the forestry sector, and the mainstreaming of landscape approaches into the rural development program design. Pilot projects relating to community forest management and forest finance, as well as FIP’s financial intermediation model, have generated demonstration effects. These have in turn accelerated a shift in thinking around the commercial viability of community forest enterprises/small-scale forest management and gender mainstreaming, creating the potential for future scaling.

The complexity and diversity of Mexico’s rural economy, however, is challenging for transformational change in sustainable development practices. Mexico’s FIP experience has shown that concessional investments in sustainable forestry and forms of dedicated support can produce socio-economic benefits for vulnerable populations, including those affected by the current Covid-19 crisis. Going forward, the innovative approaches piloted by the FIP-supported projects offer much hope for further expansion across the country. They are also critical for continuing the transformation towards more sustainable, inclusive, and resilient recoveries, while advancing climate mitigation and adaptation goals.

Authors: Neil Bird, Nacibe Chemor Salas and Eirini Pitta