Merrill Lynch is investing in forest protection

With all the gloomy news coming these days from Wall Street, it's great to see that when it comes to the environment, Wall-Street is still bullish. I'm talking about the news on Merrill Lynch new investment of $9 million to finance a project to protect 750,000 hectares of forest in Indonesia.

Dana Mattioli reported last week on the Environmental Capital blog of Wall Street Journal about the new green deal. Firstly, let's make one thing clear - this is not a donation or anything like that. It is an investment that according to the article is supposed to generate Merrill proceeds of $432 million over the next 30 years.

The expected income will come from in carbon financing, which means that someone will pay Merrill to offset polluting activities elsewhere with the amount of carbon dioxide that won't be emitted (3.4 million tons of carbon dioxide every year) because of the fact that the trees will be kept alive and won't be cut down.

Carbon financing based on forest protection wasn't permitted under the Kyoto Protocol, but as we reported in the past, it was discussed in the U.N.’s Bali meeting in December last year, and though it is not approved yet, there's a good chance it will be part of the post-Kyoto program that will replace in 2012.

Although carbon financing is far from being proven as an efficient and beneficial solution, I am very supportive of adding the forest protection into the program. Unfortunately, economic forces are the ones leading most of the deforestation and therefore it might be that economic forces may be the best realistic remedy.

I believe that Merrill will be followed by many other institutional financiers that will see an opportunity in protecting forests. For many forests this involvement will make the difference between deforestation and conservation.

Yours,
Raz @ Eco-Libris

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Preserving forests to fight global warming

Interesting news from Bali, Indonesia. The World Bank launched plans for a US$300 million fund to fend off global warming by preserving forests in developing countries.

The logic is very simple explained Stephanie Meeks, acting CEO and President of The Nature Conservancy: " We’ll never solve the climate challenge unless we address the loss of tropical forests, which puts out as much carbon dioxide as all the planes, trains and cars worldwide".

So the idea is to give economic incentives to preserve the forests and to make it worthwhile to keep them alive, avoid logging and prevent further .

According to the Reuters report, a US$100 million readiness fund will provide grants to around 20 countries to prepare them for large-scale forest protection under a future climate change deal, also known as reducing emissions from deforestation and degradation (REDD) in developing countries.

This first funding stage will be used for surveys of current forest assets in developing countries, monitoring systems and tightening governance. A second stage of funding of US$200 million carbon finance mechanism will allow some of these countries to run pilot programmes earning credits for curbing deforestation. The credits will belong to the countries or groups that put up the cash for the fund.

The World Bank announced that of the US$300 million, they already have US$160 million pledged from seven developed countries.

The World Bank forest and climate change official Benoit Bosquet told Reuters that "the projects could include anything from straight forward reforestation and better zoning of agricultural and forest lands, to paying people for environmental services or improving management of forest areas".

Another contributor to the effort is The Nature Conservancy that has pledged $5 million towards a Forest Carbon Partnership Facility (FCPF), an innovative new initiative launched by the World Bank as a part of the REDD efforts.

The emissions that will be saved will also have direct economic value - right now, under the Kyoto Protocol, emissions cuts from forest areas are not yet eligible for formal credits, but they may be sold on voluntary markets. After 2012 they might be eligible for formal credits.

There are some concerns - environmental groups say they are worried deals to prioritize the carbon-retaining value of forests might exclude some of the people who have most at stake - indigenous people that live in these areas. I hope these concerns will be addressed by making sure that the people live in these areas will be part of the decision-making process, so that their concerns will be heard and taken into account.

All in all, I believe it's a good plan. We have to give a value to keeping forests alive. In a perfect world it would be obvious, but we're not living in a perfect world and hence we need to make sure everyone will know that keeping forests alive is more profitable than logging.

Yours,

Raz @ Eco-Libris

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Picture is courtesy of Sustainable Harvest international

Planting 79 million trees in one day

The UN climate change conference will take place next month in Bali, Indonesia. In the meantime, Indonesia, which has been losing its forests at a rapid pace in recent years, launched a campaign to plant 79 million trees in one single day - November 28.

Reuters reported that President Susilo Bambang Yudhoyono (in the picture) was quoted by state news agency Antara as saying "we have been negligent in the past, now we have to get our act together," as he planted saplings on the outskirts of Jakarta on that day.

And President Yudhoyono knows what he is talking about - according to Greenpeace, Indonesia had the fastest pace of deforestation in the world between 2000-2005, with an area of forest equivalent to 300 soccer pitches destroyed every hour. One reason for these unbelievable rates of deforestation are the rapidly expanding palm oil plantations, partly driven by ambitious plans for biofuels.

Deforestation (and also the forest fires) also one of the main reasons that Indonesia is also among the world's top three greenhouse gas emitters, together with the US and China.

Back to the planting operation - the Indonesian forestry ministry officials said 79 million saplings were collected from local governments around the archipelago and they were planning to complete the planting in one day.

The planting campaign was part of a United Nations global campaign to plant one billion trees - the Billion Tree campaign, which was launched by Nobel Laureate Wangari Maathai last November (the campaign, by the way, also featured us on their website—(http://www.unep.org/billiontreecampaign/CampaignNews/Eco-Libris.asp). These efforts are due to the fact that deforestation accounts for around 20 percent of man-made emissions of carbon dioxide, the main driver of global warming.

I don't know yet if the Indonesians succeeded in their goal and planted 79 million trees, but in any case it's an importnat step in the right direction. Even more important is to significantly decrease the rapid rate of deforestation in this country, and this is the main test for Indonesia's will to go green.

One-time planting won't do the job unless a consistent policy of handling illegal loggers and foreign companies that look for quick profits out of Indonesia's natural capital will take place, and the sooner the better.

Yours,
Raz @ Eco-Libris

Eco-Libris: a great green gift for the holidays!