Does this month's article have any relevance to Inga? Yes, it could have. Firstly, because an environmentally friendly plantation should reclaim degraded land and never cut down old forest. When farmers are settled on one plot much more of such land will be available for reforestation or plantations. Secondly, sometimes it is advantageous to use ‘nurse trees' to help the wanted, in this case teak, trees to get established. Inga is of course very well suited for that, and has been successfully used to aid reforestation - see our website. (see also e.g. www.tropicalhardwoods.com, where a different tree is used for establishing a teak plantation).
Investing in Tropical Timber to Offset Carbon Emission
It is well known that investment in tropical hardwood forests have been a proven high performer for many decades. Tropical hardwoods are in high demand and all signs are that this trend will continue for many years. Established and developing economies rely heavily on hardwood timber for a wide range of uses, and 1997 figures show a shortfall of 200 million cubic meters in world demand for this commodity. Respected independent professionals affirm the wisdom of investing in trees, and recent concerns over global warming have added a further benefit to be derived from growing trees for carbon sequestration and helping to reduce global warming.
The world's tropical regions provide the conditions for fast growth that make plantation returns considerable. Conditions in the tropics allow for teak and other high value species to reach commercial maturity in 25 years, or less. A single teak tree, costing £10 to plant to-day, will be worth over £500 of to-day's pounds in twenty years time. That is an increase in value of over 20% compound annual growth rate and a far greater return than most investments available to the general public. Teak has increased in value by 9.7% every year for the past 18 years.
It is a known factor that trees absorb pathogenic carbon emissions. Contrary to popular belief, mature forests have been found in many cases, to sequester far less CO² than previously thought. Mature forests produce their own CO² from rotting vegetation and in many case the net sequestration is only a few tons per hectare. Growing forests, however, sequester large amounts of CO² and this can be over 3,000 tons of CO² per hectare. Broadleaf tropical hardwood species are thought to easily provide these rates of uptake - a typical 21 year old teak tree will have stored 1,037 kg of carbon and removed 3,801 Kg of CO² from the atmosphere just by growing. When a tree is burnt down for land clearance, or dies and rots, the carbon stored therein is released once more into the atmosphere.
So why isn't everybody rushing to invest in tropical forests? Maybe it is time for Governments to show the way and provide incentives and safeguards to people seeking to take advantage of an excellent investment opportunity and do a little to help the world as well. Most tropical areas are found in regions not favoured with cast iron property protection laws and investors tend to shy away from putting their money into countries with populist regimes that have a general disregard to foreign-owned property. However, there are democratic states that are willing to safeguard foreign investment, Costa Rica is an example, although, as a small country without great tracts of deforestation, this is not the ideal for schemes on this scale - one needs to think in terms of millions of hectares.
There are many areas that are ideal for the purpose, the Petén region of Guatemala especially: there are large areas that have been totally deforested and are available for plantation; local laws favour this type of enterprise - there are even grants available for reforestation; logging is controlled and strict international FSC regulations are in place around the Maya Biosphere Reserve; local expertise is readily available and strict controls ensure transparent development.
Current prices for carbon offsetting do not benefit "avoided deforestation" schemes, although changes are afoot. If a higher value was placed on reforestation and a payment per tree planted and maintained, who knows how many farmers would subscribe to this scheme. With carbon credits at £30 per ton, or twice their current value, tree planting suddenly becomes a viable prospect. Stopping uncontrolled deforestation and rewarding migrant farmers for growing new trees would stop over 30% of green house gas production caused by deforestation and give the world a way to absorb gases already in our atmosphere.
Sustainable and managed forestry should become standard practice and timber traders can control this by insisting all timber is FSC certified. Forest management should also focus on clearing old trees and replanting new. If managed forestry could be made to work by prizing net CO² uptake, this would help enormously in addressing the natural balance.
Involving private funding should not be a difficulty. The returns to be gained from long-term investment in tropical hardwoods are spectacular and the "feel good" factor is unparalleled. Investment in forestry, apart from the possibility of helping to avoid global warming, produces an economy for needy people; improves water supply and benefits fauna and flora generally.
There is a need for a model to be put into operation, one thousand hectares of deforested land can be bought for £500,000, Cost for reforesting with teak would cost another £500,000 including machinery. After 20 years, deducting running costs, the value of timber will exceed £150 million and the CO² uptake will be over 3,000,000 tons. Using this model, local farmers can be convinced to plant timber on their land and they could act as outgrowers for the main operation. As the process is repetitive, trees are harvested and replaced with new. Carbon uptake from one farm could be as high as 150,000 Ct per year.
Hundreds of thousands of deforested hectares are available to buy and all that is needed is for an investor to start the ball rolling.