Trees and forests are an important part of our ecosystem. They also play a vital role as a part of our economy. For example, forests give us oxygen and sequester carbon. However, there is difficultly in putting monetary value on such “free” services. A bigger problem is protecting this resource from deforestation.
What’s the best way to protect forests, especially the rain forests? How do you establish value for forests when carbon markets don’t exist? What are the business and market solutions that might help?
For decades, the emphasis has been on protecting forests outright. This may sound great. But the question remains, who does the protection? You? Me? The government? What if the government is corrupt and hands over protected land to be deforested? Or another problem: who pays for the protection? It does cost money after all.
A discussion during The New Economics of Land round table at the Fortune Brainstorm Green 2011 yielded some insights: If you or I had unlimited funds, we might put a nice portion of it towards forest conservation. But we don’t have unlimited funds, and we have to work and abide by the rules of the marketplace. Glenn Prickett, Chief External Affairs Officer of The Nature Conservancy suggests a simple mind shift.
Traditional conservation thnking has been to protect nature from people. In essence, the focus was on planet, planet, and more planet.
Now and for the future, Prickett suggests motivation needs to be about protecting nature for people. We need to include economic and human values, just as much as conservation values. Sounds quite familiar. Shall we say people, planet, and profits? After all, it is us, as a people who find and derive value from nature.
One such company attempting to deriving economic value from forests is Patagonia Sur LLC (no relation to the company clothing company Patagnoia). This company takes a unique approach to developing a new asset class: for-profit conservation.
There is no typo there. The emphasis is on profit. That may sound counter-intutive in terms of conservation. However, this is consistent with protecting nature for people. In Patagonia Sur’s own words it is, “an innovative blend of conservation + capitalism that attracts capital by offering competitive financial return on investors.”
Some the lands they own are prime for reforestation and Eco-tourism. If a piece of land will not fit in their portfolio and provide an ROI, it will not be invested on. While this may seem a bit limited, in the context of companies that blatantly destroy land, it may be a favorable option.
It is great to have “protected” land. But it may be just as good, if not better, to have land that is utilized and profitable while being conserved, than land that is completely disseminated.