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Financing the World's Forests: integrating markets and stakeholders1

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First keynote speaker presentation by Andrew Mitchell (Global Canopy Programme) …

First keynote speaker presentation by Andrew Mitchell (Global Canopy Programme)

3rd August 2009 - Imperial College (CEP)

Published in: Economy & Finance, Technology

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  • 1. Financing the World’s Forests: Integrating Markets and Stakeholders Imperial College - 3 Aug 2009
  • 2. Stepping up to Copenhagen Options for Forests Financing the World’s Forests: Integrating Markets and Stakeholders - Imperial College - 3 Aug 2009 Andrew W. Mitchell Founder & Director Global Canopy Programme Research Associate Zoology Dept University of Oxford
  • 3. Core Areas
    • science
    finance policy A Crisis of Values
  • 4.  
  • 5. “ There will be no solution to climate change, without a solution to deforestation” (Nobel Laureates Symposium, 2009) Aircraft Emissions = 2% Energy Emissions = 25 % Forest Emissions = 18% Forest emissions are equivalent to flying 12.5 million people from London to New York every day!
  • 6. SOURCE: Pathways to a Low Carbon Economy , McKinsey report, Feb 2009 20% of the Problem - 40% of the Solution
  • 7. Emerging Frameworks for Forests UNFCCC - CDM > REDD > 2012 EU ETS > 2013 US Market - Waxman-Markey Bill Australia/Others Voluntary Markets - CCX CBD - PINC? CBD - Green Development Mechanism
  • 8. CDM > REDD > REDD + > PINC ? (Pro-active Investment in Natural Capital) Tradable Currency = 1t/CO2 > 1 ha/forest? Figure 2: Three complementary and reinforcing mechanisms for conserving and restoring forest and mitigating and adapting to climate change
  • 9. Sources of $ US$ 17-33 Billion /yr International Auctioning (AAUs) National Auctioning of Allowances REDD Markets ODA Interim Financing Mechanism
  • 10. Interim Funding for REDD
    • HRH Prince of Wales hosted historic meeting of world leaders in London alongside April’09 G20
    • 35 Countries
    • G8 Statement
    • Norway Wking Gp
    • Report mid Sept’09
    Meeting at St James’s Palace, 1 April’09
  • 11. Timing of payments (IWGIFR)
  • 12. Fund flows Tropical Forests Facility Rainforest Bond Rainforest Nations Direct Funding Private Investors Payments OECD Govts Guarantees/ Repayments Carbon Permit Auctions Special Levies (e.g. fuel) Earmarking Taxes World Bank Technical Support Issuer/ Advisor
  • 13. Business Drives Deforestation
    • 60% of globally traded beef is from Brazil
    • 40% of exports are to Europe
    • 80% of the growth in Brazilian beef production is in the Amazon
    • EU is also the world’s largest import market for soybeans
    • Palm oil plantations are driving deforestation in Malaysia and Indonesia
    • 84% of UK companies importing palm oil have done little to ensure it is not from a destructive source
    Beyond Copenhagen?
  • 14. Emerging Earnings Risks - Reputational - Regulatory - Environmental
  • 15. “ Are we creating wealth that’s worth having?” Clinton Global Initiative, New York, October 2007
  • 16. Natural Capital & Financial Capital A Tale of Two Economies? Could Water become the new Oil?
  • 17. Valuing Forest as Global Eco-Utilities?
    • + 80%
  • 18.  
  • 19. Utility to Business
    • The Amazon
    • 3 trillion tonnes of water stored
    • 20 billion tonnes of water vapour transferred daily
    • $1 trillion of industry share this eco-dependency
    • Deforestation means declining service provision
    • Rising temperatures will compound the effects
    The Amazon’s Rainfall Service
  • 20. Natural Capital - A New Asset Class?
  • 21. Don’t Bank on Copenhagen Forests - Natural CCS we can’t afford to do without…. GDP > Gross Destructive Potential! TEEB - will drive recognition of Natural Capital values.
  • 22. www.globalcanopy.org www.littlereddbook.org www.forestdisclosure.org
  • 23.  
  • 24. Why should Forests matter to Investors?
  • 25. Forests are ‘Eco-utilities’ of immense value
    • Opportunity
    • 45% of terrestrial carbon is stored in the world’s forests
    • 1.2 billion tonnes of carbon sequestered worth $35-89 billion per year.
    • Underpin Food, Energy and Health security globally.
    • Risk
    • 18-25% of total global carbon emissions from deforestation
    • $1.7-4 trillion annual cost of forest ecosystem service loss
    • Poltical and Regulatory famework likely to change fast
  • 26. “ Are we creating wealth that’s worth having?” Clinton Global Initiative, New York, October 2007
  • 27. Forest Footprint Disclosure
    • A ‘Toolkit’ to enable business to report on operational and consumption related impacts on deforestation
    • Direct and indirect
    • Available to the financial community to i nform investor decision making
    • Promoting transparency and awareness
    • Preparing for future risks and opportunities
    • Ministerial launch 15th June
    • 1st Report - January 2010
  • 28. We can’t do this without you! We cant’ afford to wait!

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