Forestry sector gets climate change tipsJune 2011
A guide to investment in forest-based climate change mitigation has been produced by the United Nations Environment Programme Finance Initiative (Unepfi).
The document outlines the ‘financial opportunities’ for investors in forestry, advising institutions on issues including carbon markets, risk mitigation measures, political risks and insurance.
If the forest sector had to halve its emissions by 2030, it could be worth up to $33billion (£20bn, €23bn) per year. Given this, Unepfi says there is an ‘unaddressed need to mobilize private-sector financing at scale’.
The document outlines how managers can invest their equity directly into forestry projects, forestry project development companies and forest funds, act as brokers for other investors, or lend to forest companies.
The guide concludes: ‘While the forestry sector presents new business opportunities for the private sector, a lack of both national and especially international regulation, as well as modalities that are not particularly friendly to the private sector, has meant that financial institutions and other private actors have been slow to get involved.
‘High perceived levels of risk and a general lack of awareness of the opportunity have also added to the problem.
‘However, with the right actions, regulations and modalities, policy makers and the private sector can ensure that forests and their services are attributed their true value and that investment at the needed scale is rapidly mobilized.’
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