Nearly half of Mexico is covered by forests, which host 10 percent of the world’s biodiversity. Thus, Mexico is a critical net carbon sink for the world. Due to agriculture expansion, increased cattle ranching, illegal logging, fires and urban expansion, Mexico loses 280 thousand hectares of forest per year. Deforestation threatens biodiversity and has negative health and economic impacts on communities. 

In support of Mexico’s goal to achieve net-zero deforestation by 2030, USAID uses market-based approaches and partners with Mexico’s robust private sector to invest in rural communities to link farmers to sustainable markets that are paying more for their goods. USAID’s activities promote climate-resilient economic growth by advancing nature-based climate solutions. USAID’s 2022-2030 Climate Strategy emphasizes limiting global temperature increases to 1.5 degrees Celsius (34.7 degrees Fahrenheit) and adapting to climate change. Forests, peatlands and other ecosystems absorb and store large amounts of carbon, reduce disaster risk and support livelihoods. But environmentally damaging agricultural practices and agricultural expansion threaten these landscapes. Natural climate solutions focus on improving the management and protection of forests from deforestation and degradation, increasing reforestation and afforestation activities and promoting sustainable agricultural and livestock practices that reduce emissions. 

Smallholder farming communities with collective land tenure arrangements, such as ejidos, manage over 60 percent of Mexico’s forests, so smallholder farmers play a critical role in implementing sustainable land activities. The Alliance for Sustainable Landscapes and Markets (2018-2022) works with communities and the private sector to increase the profitability and competitiveness of community-led sustainable farm and forestry businesses. In Chiapas, the Activity works with small coffee producers and cooperatives to produce quality coffee, protect their forests, and use climate-smart agriculture practices and restoration efforts to increase their resilience and well-being. In the state of Quintana Roo, the Activity strengthens the community-based Alianza Selva Maya, an organization of five ejidos that promotes the commercialization of timber products from sustainably managed tropical forests. In Oaxaca, the Activity supports the product development and marketing activities of the Coordinadora Estatal de Productores de Café De Oaxaca (CEPCO), an organization of 45 regional organizations, 134 communities, and thousands of organic coffee producers that promotes climate-smart agriculture practices. These efforts have resulted in improved natural resource management of over 176,000 hectares of land and over 117,000 metric tons of reduced greenhouse gas emissions.

Agricultural producers need upfront and ongoing resources and financing to manage their land more sustainably. A greater focus on inclusive climate finance can reduce deforestation and emissions while increasing economic productivity and improving lives. The Sustainable Landscapes Ventures Activity (2020-2025) is linking organizations of small producers, investors and buyers to develop sustainable and inclusive, market-driven and investor-ready value chains at scale in Mexico and mobilizing additional finance towards small producers that implement sustainable land management practices. The Activity helps create conditions for sustainable business transactions to occur, where the risks and the gains are shared, by organizing small producers in Campeche, Chiapas, Oaxaca, and Yucatan and engaging buyers and investors with environmental and social responsibility goals to work with these entities through a blended finance engine.

Similarly, the Sustainable Prosperous Communities (SPC) Activity (2021-2026) is increasing the number of hectares of forest under sustainable management by providing local communities access to economic opportunities that incentivize sustainable practices to protect and restore Mexico’s forests. The Activity is strengthening the capacity of smallholder producers to transition to more sustainable and profitable practices that reduce deforestation and improve livelihoods by promoting access to markets along selected value chains. The Activity develops financial products tailored to smallholder producer needs and improves their access to financing to drive sustainability, innovation and scale.

Using these kinds of market-based natural climate solutions, USAID is supporting the kind of economic development of southern Mexico that promotes environmental and climate benefits. Mission programs help farmers adopt sustainable practices to climb the so-called value-chain through investments and technical support and therefore capture much higher profits while reducing deforestation and greenhouse gas emissions.