The BBC News website highlighted a combined pilot project between American Electric Power and BP alongside environmental groups such as the Nature Conservancy to find out if investing in tracts of rainforests to protect them against deforestation and in compensation for their own pollution.
Putting a price on saving rainforest via carbon credits, could enable developing countries to benefit from actively reducing deforestation through funding from the private sector and governments in the developed world utilising forestry projects to offset CO2 emissions.
Columbia University economist Professor Geoffrey Heal explains:
Basically the mechanism we’ve come up with is the following; countries reduce their rates of deforestation below what they historically have been and in exchange for that, they get carbon credits which they can sell on world carbon markets,
and
It is possible to calculate the amount of carbon in a hectare of rainforest to a reasonable amount of precision,
Source: Rainforests could be traded on world market – bbc.co.uk
What Green Investment Comment:
The debate over forestry protection gathers pace as Copenhagen Climate Summit looms large. Many global conglomerates approach to solving their problem of climate emissions has been to invest in rainforests tracts globally, further sanctioning the use of forestry as an investment vehicle and underlying confidence for its future worth.
If the price of carbon increases, a regulated price for carbon stored in tree’s can be reached/accepted and a deal is reached to force governments and businesses to cut CO2 emissions, the growth in investment in the forestry sector could be phenomenal.
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Category : Green Talk