Putting a price on nature can save forests, rivers

Putting a price on nature by creating tradeable credits can the limit the loss of forests, wetlands and rivers from the expansion of agriculture, according to the head of an international forestry investment firm.

Carbon, water and biodiversity were emerging as the three main environmental market forces this century, said David Brand, managing director of New Forests, and his company was developing projects in all three areas to yield saleable credits.

"If the remaining ecosystems aren't priced then they are basically traded as free input to the expansion of agriculture," said Mr Brand.

"So the objective here is to give them a price that slows that process and makes alternatives to conversion more economically attractive."

Earlier this year, Sydney-headquartered New Forests signed a deal with the government of Indonesia's Papua province and Indonesia-based Emerald Planet, which advises and invests in green projects.

The aim of the Papua project is to save two tracts of forest from development in return for carbon credits estimated between €1.8 and €4.6 a tonne per year. The two areas, each about 250,000 acres in Mamberamo and Mimika regencies and largely in pristine state, had been previously surveyed for oil palm, cassava and sago palm plantations and about half in total had been slated for clearing over the next 10 years.

By preventing that, Mr Brand said, initial estimates showed the project could save between 20 million and 40 million tonnes of carbon dioxide being emitted over 15 to 20 years.

A major portion of money from the sale of the credits would go to the local community to be managed through an independent, perpetual endowment fund.

Mr Brand said the project was in the process of applying for licences and then validation under the internationally recognised Voluntary Carbon Standard before emissions offsets would be available for sale, possibly by early 2010.

New Forests, which says it manages €92 million in assets throughout Australia, New Zealand, the US and the Asian region, has also helped develop the Malua BioBank in Malaysia's Sabah state on the island of Borneo.