Merrill Lynch invests $9M in rainforest conservation, expects profit

Merrill Lynch invests $9M in rainforest conservation, expects profit

Merrill Lynch invests $9M in rainforest conservation, expects profit

Rhett A. bugler,

March 12, 2008

Merrill Lynch’s investment in a rainforest conservation project in the Indonesian province of Aceh is worth $9 million over four years, reports Thomas Wright of The Wall Street Journal.

The deal — announced with great fanfare last month — seeks to offset 3.4 million tons of carbon dioxide per year by reducing deforestation. The resulting carbon credits could be sold in international markets once the Kyoto Protocol expires in 2012 and forestry-based credits are officially recognized (Kyoto does not allow such credits, but delegates at the December U.N. meeting in Bali signaled that forestry-based credits would be an option in the future).

The Aceh deal is the first time a U.S. bank has dabbled in the forest carbon market, which is expected to grow significantly in coming years as firms seek inexpensive ways to offset greenhouse gas emissions.

“Merrill is betting that money it puts in to the Aceh project now will be a source of cheap credits that will become more valuable if forestry becomes part of the post-Kyoto landscape,” writes Wright. “The success of the deal could also influence how much more money Merrill puts in to forestry. The bank is debating internally about raising a fund of up to $3 billion to protect global forests. A war chest like that could start to make a real impact on deforestation rates.”

The Aceh deal, brokered by Australia-based Carbon Conservation, could generate up to $432 million in carbon financing over the next 30 years.

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First rainforest-for-carbon-credits deal becomes a reality February 7, 2008

Villagers in Aceh, the Indonesian province that suffered through three decades of civil war and lost some 170,000 people to the 2004 Indian Ocean tsunami, could soon see $26 million in carbon credits for protecting rainforests from logging under a deal announced today between conservationists, carbon traders, and the Aceh government.

Carbon for forests will help Aceh recover from war, tsunami September 18, 2007

Aceh Governor Irwandi Jusuf, a former rebel who was one of only 40 survivors after the December 2004 tsunami struck the prison where he was incarcerated, is now one of Indonesia’s leading supporters of forest conservation funded through carbon credits. Carbon credits through forest conservation will play an important role in Aceh’s recovery from decades of civil strife and the devastating 2004 tsunami, which left more than 167,000 people dead and 500,000 homeless in the Indonesia province, said Aceh governor Irwandi Jusuf in meeting in San Francisco.

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