AAA Calls for Action on Forestry Carbon Investment Market

May 10, 2011 - PRLog -- Boston, MA -- Alternative Asset Analysis (AAA) has called for a well-designed forestry carbon investment market to ensure large-scale private investment is secured.

AAA, an advocacy group working to encourage the take-up of alternative investments, has welcomed a new report from the UN that says a forestry carbon investment market could help the REDD+ campaign to reach the levels it is capable of.

The "REDDy – Set – Grow: Opportunities and roles of financial institutions in forest-carbon markets" report was a joint effort between the UN’s Environmental Program (UNEP) and large financial players, including Bank of America Merrill Lynch.

Bank of America Merrill Lynch’s Global Head of Carbon Markets, Abyd Karmal, stated: "The market for forestry carbon has significant potential but will require concerted efforts in the design phase by policy-makers to ensure that it attracts flows of private capital."

AAA’s partner, analyst Anthony Johnson, said: “The points made in UNEP’s report are vital and highlight the fact that deforestation can only really be halted if billions of dollars are invested into forest carbon mechanisms.”

Reducing Emissions from Deforestation and Forest Degradation (REDD+) has formed the central component of the next global regime on climate change, according to agreements made at last year’s UN climate change summit in Mexico. The REDD+ campaign is now being developed by UNEP and involves promoting sustainable forestry plantations in emerging economies, such as the teak and eucalyptus plantations managed by Greenwood Management in Brazil.

More investment and funding is vital, though, for the future of these schemes. The study said that private sector commitment to the REDD+ scheme is important in making it work on a global scale and this will be further discussed at the upcoming UN climate change conference in Durban, South Africa, explained AAA. “Investment from individuals is not enough to ensure REDD+ works globally", added Anthony Johnson.

The report was also keen to point out to the private sector that forestry offers great opportunities for sustainable, ethical investment and can successfully diversify the risk in a portfolio. “Forestry prices are not affected by equities and other financial markets the way that many asset classes are,” explained Johnson. He added: “investing in forestry can deliver strong returns and can also help to prevent further deforestation of native rain forests in countries like Brazil and Indonesia as the demand for timber from the likes of China and India continues to rise.”

Contact:
Anthony Johnson
Alternative Asset Analysis
71 Commercial St
Boston, MA 02109-1320
617-898-6317
info@alternativeassetanalysis.com
http://www.alternativeassetanalysis.com

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