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Private equity seek profit from rainforest wildlife conservation Rhett Butler, mongabay.com August 13, 2008 Scheme would generate investment returns while restoring rainforest and protecting wildlife
New Forests, a Sydney, Australia-based company, has established the Malua Wildlife Habitat Conservation Bank in Malaysia as an attempt to monetize rainforest conservation. The "Malua BioBank" will use an investment from a private equity fund to restore and protect 34,000 hectares (80,000 acres) of formerly logged forest that serves as a buffer between biologically-rich forest reserve and a sea of oil palm plantations. The conservation effort will generate "Biodiversity Conservation Certificates", the sales of which will endow a perpetual conservation trust and produce a return on investment for the Sabah Government and the private equity fund.
"Energy, food and cosmetics companies relying on agribusiness products, particularly palm oil, are increasingly scrutinized for perceived impacts on rainforests," said New Forests in a statement. "By purchasing certificates, buyers can claim a transparent and credible contribution to high value forest conservation." "Nothing like this has ever been done for the biodiversity in tropical rainforests," added David Brand, Managing Director of New Forests Pty Limited, the parent company of New Forests Inc. "The Malua BioBank translates rainforest protection into a salable product so that biodiversity conservation can compete with oter land uses on a commercial basis."
New Forests says that it hopes the sale of biodiversity credits will boost conservation where government efforts and philanthropy have fallen short. "To date, public and philanthropic funding sources for conservation have not kept pace with the rate of biodiversity loss," said New Forests. "Attaching value to conservation will harness private sector finance to help fill this funding gap." Restoring biodiversity To generate credits by restoring biodiversity in Malua, New Forests says it will focus on initiatives to help the rainforest canopy recover from past logging and introduce measures to reduce the risk of catastrophic wildfires. "The rehabilitation process will include planting seedlings to reestablish key rainforest species and enhancing natural food reources for wildlife until the area regenerates into healthy tropical rainforest," explained New Forests. "Regular monitoring of forest regeneration, water quality and wildlife are just a part of the comprehensive conservation strategy. The Malua BioBank will also work with local communities and landowners to uphold the prohibition against hunting within the reserve and to prevent illegal logging." "The ultimate aim of the Malua BioBank is to shift land use towards rainforest restoration and preservation, catalyzing a new economy of conservation in the process," New Forests continued. "Once an area has established an economic framework to support long-term sustainable use, money can be moved to other critical conservation areas to initiate the process again. In this way, the Malua BioBank model can act as a stepping stone toward the long-term preservation of high biodiversity areas throughout a region or country." Other "ecosystem services" projects The wildlife banking deal comes shortly after New Forests unveiled an "avoided deforestation" investment in an area of rainforest on the island of New Guinea. The conservation initiative would generate carbon credits that will be sold in voluntary markets to firms and individuals looking to offset their CO2 emissions. This year has also seen London-based Generation Investment Management — Al Gore's investment firm — take a minority investment stake New Forests.
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