Prince Charles has been talking on BBC radio 4 this morning about his desire to reinvigorate the drive to conserve the world’s pristine rainforests. He has said to friends that he wants to make significant progress by the time his 60th birthday arrives on Nov 14th 2008.
The Prince announced the creation of The Prince’s Rainforests Project in Oct 2007, which aims to work with the private sector, governments and environmental experts to find solutions which could be put in place.
“These solutions need to provide credible incentives to rainforest nations, down to the farmers on the ground, and must ‘out-compete’ the drivers of rainforest destruction,” he said.
In his interview this morning he mentioned Canopy Capital. The UK private equity company has recently purchased the rights to environmental services generated by a 371,000-hectare rainforest reserve in Guyana. There is an enlightening article on this by Mongabay.com which also talks about Merrill Lynch’s investment in a rainforest conservation project in the Indonesian province of Aceh, which is worth $9 million over four years (detail here).
In a follow up interview with Canopy Capital and a rainforest charity on radio 4 there was some discussion on how venture capital companies expect to make a profit from their investment. It appears that one way could be via carbon markets, which are still a new market instrument. The rainforest charity representative had his doubts as he believed factoring in the huge value of rainforests as carbon sinks (and therefore carbon credits) would devalue the price of carbon credits on the market overnight, therefore threatening pollution abatement and renewable energy projects.
Meanwhile “Merrill is betting that money it puts in to the Aceh project now will be a source of cheap credits that will become more valuable if forestry becomes part of the post-Kyoto landscape,” writes Wright of The Wall Street Journal. “The success of the deal could also influence how much more money Merrill puts in to forestry. The bank is debating internally about raising a fund of up to $3 billion to protect global forests. A war chest like that could start to make a real impact on deforestation rates.”
Canopy Capital, in exchange for funding a “significant” part of Iwokrama’s $1.2 million research and conservation program on an ongoing basis, have secured the right to develop value for environmental services provided by the reserve. Essentially the financial firm has bet that the services generated by a living rainforest — including rainfall generation, climate regulation, biodiversity maintenance and carbon storage — will eventually be valuable in international markets.
Hylton Murray-Philipson, director of Canopy Capital, says the agreement — which returns 80 percent of the proceeds to the people of Guyana — could set the stage for an era where forest conservation is driven by the pursuit of profit rather than overt altruistic concerns.
This is the new frontier in forest conservation and the Prince of Wales has just decided to put his backing to it. Lets hope he’s right. There is certainly an urgent need to ratchet up the pressure worldwide for huge conservation schemes that work and work in the longer term.