For smallholder farmers who rely on their land for an income, growing trees often feels out of reach as a land-use option. The upfront costs associated with planting and maintaining a forest, coupled with the delayed financial return from such an investment, means many see more opportunities in more unsustainable land-use options than growing trees. However, one solution is shifting the dynamic: carbon financing.

How does carbon financing work?

Carbon financing operates on a simple yet impactful principle: companies and individuals seeking to meet their climate commitments purchase carbon removal credits generated by projects that reduce or mitigate greenhouse gases. The revenue from these credits is then shared with local communities implementing climate solutions on the ground.

The CommuniTree Carbon Program is one such project. It helps Nicaraguan smallholders to grow trees and earn money from the carbon they remove from the atmosphere. Project participants receive 60% of carbon revenue and are connected to forest value chains, providing additional livelihoods benefits over time. The project is designed to complement existing agricultural practices, ensuring that farmers can sustain their subsistence activities while benefitting from new and diversified income streams.

A new opportunity for farmers

This is changing the narrative for people like Santos Yzsabel Garcia Bautista. A 62-year-old resident of the Buena Vista community, she has long understood the value of growing trees but has lacked the means to make it a reality. “Before the program, I would collect flora that I found along the roads to plant on my farm, but the trees around here don’t provide the type of wood we need,” she explains. “I always wanted to establish a forest, but a woman without money can do nothing. I wouldn’t even have been able to try to grow trees, starting with the difficulty of obtaining raw materials such as seeds.”

Santos joined CommuniTree in 2023 and has since started growing a mixed species forest. The project provided her with all the materials needed to establish a nursery, using species that are native to Nicaragua. Each species was carefully selected to meet the needs of local farming families, with the waste products of silvicultural maintenance providing a source of firewood and construction materials. Santos notes that as well as improving water security for her family, the trees will provide the wood needed to create fence posts on her farm. “Being able to always have this resource is invaluable,” she says.

Support beyond carbon payments

Through CommuniTree, farmers receive carbon payments – also known as payments for ecosystem services – over the course of 10 years. This provides the incentives needed to start growing trees, helping to cover the costs associated with silvicultural activities such as planting and weeding. Farmers also receive technical assistance from a local team of agroecology experts, plus materials such as seeds and fencing.

Like Santos, José Miranda Hernández, a 64-year-old farmer who joined CommuniTree to improve the quality of his land, says learning about the project opened the door to a new opportunity. “Working with CommuniTree has allowed me to grow trees thanks to the [financial] incentives, technical assistance, and inputs such as bags and seeds,” José says. “My family would not have been able to restore a forest on our own. It is an investment, and we do not have enough income for that.”

Creating additional impacts

For farmers like Santos and José, the impact of carbon financing is clear: they are now able to invest in the future of their land, one where trees exist alongside their agricultural practices. Because of this, their farms will enjoy improved soil fertility, increased water retention, and enhanced biodiversity. The trees they grow will sequester carbon from the atmosphere, regenerate ecosystems, and support their livelihoods. “We have already seen positive outcomes,” says José, who planted trees across two parcels of land earlier this year. “We did most of the work as a family and have used the leftover funds to cover household expenses.”

It is a story happening across Nicaragua. Yet it is a story that could never have been told without carbon financing – and without the companies who invested in the project. CommuniTree is a powerful example of how companies seeking to meet their climate commitments hold the potential to create entirely additional impacts for communities, nature, and climate. Thanks to their support, Santos, José, and the other 5,000+ families who participate in CommuniTree now see growing trees as a viable land-use option – and one that will remain viable for future generations to come.

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