Press release

Forestation Based Carbon Credits Get Green Light

Updated on Wednesday 19th of November 2008

Silva Tree

The world's most popular global benchmark standard for greenhouse gas reductions, the VCS, has recently added avoided deforestation schemes to their standard, and will start to issue forestry-based credits that can be sold on the global Carbon market.They believe that halting deforestation is a vital move towards stopping climate change, as David Antonioli, CEO of the VCS Association (VCSA) says:

“This is a watershed moment and a shot in the arm for the world’s forests, the world’s climate, and the global carbon market. The new VCS rules will drive much needed investment into protecting the world’s threatened forests as a means to stabilize our global climate.”

Others are also taking their view:The Coalition for Rainforest Nations is urging the UN to establish a governing body for the regulation of rainforest carbon credits, and the UN-REDD Programme is fighting to add forestation to the new post- Kyoto UN climate change arrangements.Similarly, a hot topic at theinternational climate change negotiations in Ghana was creating new mechanisms to halt deforestation of tropical rainforests, with an "overwhelming consensus" that new methods of tackling deforestation are essential, according to Luiz Figueiredo Machado, Brazilian expert chairing parts of the talks.

Although the news is just out, many companies have already invested in forestation generated carbon offset credits- a bright move at just the right time.Banking giantMerrill Lynch has recently agreed a deal to buy a minimum of $9M of forestry credits, and even much smaller companies, such as Silva Tree S.A., responsible for arainforest conservation project in Costa Rica, are already “growing their own credits” from avoided deforestation and selling them to the voluntary market, with a move to break into the much larger mandatory market in the future.Keren Katz, Director of Silva Tree says:

“The Carbon market is big business.With credit prices growing and demand still increasing, we decided to move away from property and financial products and get into something that not only makes money, but also does something good for the environment.The work we are doing directly helps to fight climate change and the more we grow our business, the more of a positive impact we can make”

Forestry projects are a particularly attractive investment as they offer the unique added value of protecting biodiversity in addition to the carbon and financial value they offer.Similarly, these projects will bring much-needed sustainable income to tropical countries, turning financial values on their head in areas where previously deforestation was a large source of income.

Not only have Silva Tree invested in this growing market themselves by launching the project, they are now facilitating expansion by allowing investors to join them.By purchasing plots of land for small amounts of money, investors can make annual returns of over 15% from credit sales.With prices increasing steadily, Silva Tree are boasting a projected overall return of no less than $2M on an initial investment of just $12000.

Now the move by VCS strengthens their investment product even further:“For the first time ever, investors can rely on robust rules for crediting AFOLU project activities, creating valuable new market opportunities.”With this recent move by the VCS to include forestation credits in their standard, they have given an enormous boost to forestation based carbon projects as buyers can invest knowing that the product will be independently verified, accredited, permanently monitored and registered.

Critics have argued that carbon credits created by avoided deforestation do not meet additionality requirements, and that the trees currently being protected might not survive, but now the new VCS standard hopes to diffuse concerns about the validity of forestry credits.Toby Janson-Smith, director of Conservation International says:

"Today's launch of the VCS rules will not only boost market confidence in forest carbon activities but also, for the first time, enable projects that benefit local communities and biodiversity to access significant new global investment,"

Forestry projects are bound to grow into a profitable and hugely environmentally beneficial sector, with those who have invested already leading the way.

Source: Silva Tree