Code REDD for environmental protection
Up to now a forest’s value has been measured mainly in terms of the price of its wood, but the United Nations is currently turning this premise on its head by placing a price on the forest’s capacity to absorb the greenhouse gas carbon dioxide from the atmosphere.
Its REDD program (Reducing Emissions from Deforestation and Degradation) aims to prove that conserving a forest is more profitable than cutting it down – for all concerned - by awarding forest conservation projects carbon credits that can then be sold for profit on international carbon markets.
So far REDD has been based on a voluntary carbon market. To increase its impact the Code REDD campaign urges corporations to take a leadership role in increasing the demand by pledging to purchase Verified Emissions Reductions from high-quality REDD projects approved by the Code REDD campaign.
That way Code REDD enables corporations to reduce their effective carbon footprint while helping stop deforestation, protect biodiversity, reduce climate change, and create sustainable development for forest communities.
Do something REDD
On the eve of Rio+20, the United Nations Conference on Sustainable Development, UNESCO, major multinational corporations, REDD project developers, and representatives of indigenous forest communities came together to announce their participation in the global launch of the Code REDD campaign.
The REDD theory is currently being tested in a project developed by Wildlife Works Carbon (WWC), a world leader in REDD programs and founder of the Code REDD campaign. In October 2011, Allianz acquired a ten percent stake in WWC.
The project area is situated in the Kasigau Corridor, an area of over 200,000 hectares that connects the Tsavo East and Tsavo West National Parks in southern Kenya. It is home to numerous endangered species.
Protection of the forested area will prevent the release of 1.2 million tons of CO2 per year, and the sale of the corresponding emissions certificates will bring in 7.5 million dollars annually, according to the project plan. The income will benefit the surrounding communities, where the money will be used to create jobs in small businesses and ecotourism.
It is clear to the initiators of WWC that their proposal will only be successful in the long term if the protection of the forest in the Kasigau Corridor brings more to the surrounding communities and its 100,000 inhabitants than its destruction and provides alternatives to secure their livelihood.
“REDD is about protecting forests from people who destroy them for economic reasons,” says WWC founder and CEO Mike Korchinsky. The creation of jobs is therefore one of the most important aims of the WWC projects. “We create jobs for gamekeepers, mechanics, carpenters, bricklayers, drivers and administrative staff,” says Korchinsky. “And we finance the establishment of small businesses, such as a clothing factory, a sustainable charcoal-making facility and a soap factory in the project area.”
But REDD isn’t just a social and ecological project. “It’s an increasingly attractive investment class for institutional investors and particularly for financial investors,” explains Martin Ewald, investment manager at Allianz Climate Solutions (ACS).
Allianz believes its stake in WWC is an attractive investment opportunity that promises a competitive return. The company intends to co-finance the expansion and development of other REDD projects in the future. Wildlife Works is planning further projects in Africa, Latin America and Southeast Asia.
Thanks to their long-term investment horizon and their social implications, the demand for sustainable investments has increased considerably in the past few years, says Ewald, and he is convinced that this trend is set to continue.
For more information on Code REDD click here