Restoring Sri Lanka’s Central Highland Cloud Forests in Bopaththalawa: A nature-based fiscal strategy for climate adaptation and water security

Summary

Sri Lanka’s Central Highlands cloud forests are vital ecosystems that regulates regional hydrology, preserve biodiversity and provides critical ecosystem services. These habitats face severe threats due to anthropogenic activities. To minimise pressures, the Cloud Forest Restoration Project in Bopaththalawa was initiated as a long-term, community-driven model and a Nature-based Solution (NbS) to enhance climate and fiscal resilience.

This project by RDL Corporate Responsibility (Olu Tropical Water) and Earthlanka Youth Network (with donor-based research funds from the Adaptation Research Alliance (ARA) outlines the restoration approach that integrates habitat & species assessment, Assisted Natural Regeneration, fire prevention and livelihood development. As Olu Tropical Water relies on water sourced from the cloud forest region for its operations, the restoration initiative represents the company’s commitment to giving back to the environment that sustains water. Restoration activities were reinforced by educational programs by the project aimed at youth and local communities promoting long-term sustainability.

Home-garden nursery networks and CSR co-financing reduced costs while increasing local engagement in restoration. The baseline biodiversity assessment recorded 39 species of flora and 35 faunae, of which over 34% were under IUCN threatened categories, forming a critical baseline for restoration monitoring. An adaptive invasive species removal methodology was implemented, targeting Solanum mauritianum and Miconia calvescens through staged manual removal to prevent regrowth within the habitat.

Beyond its ecological benefits, the 3- year project looked at the possibilities of NbS to deliver fiscal co-benefits to the country. These include the reduction of public expenditure on disaster mitigation, enhanced water security, and reduced human wildlife conflict.

The restoration also opens up for carbon financing, biodiversity offset markets, and Payments for Ecosystem Services, highlighting a path for scalable, cost-effective climate adaptation mechanism. The restoration progress report is submitted to the Department of Forest Conservation with the aim of supporting evidence-based policy formulation and decision-making.

It could be argued that project incorporating into national fiscal and policy frameworks—such as Sri Lanka’s NDCs and climate adaptation plans can generate long-term economic and ecological benefits. The case of Bopaththalawa restoration provides a replicable model for mountainous regions across Asia facing similar climatic and fiscal vulnerabilities.