Or so the old adage goes …. but as we enter a new era, an era where Carbon is the most talked-about and most important commodity in the World, then suddenly this age-old saying now seems a little short-sighted.
With over 20% of the planet’s carbon stored in trees, global governments and organisations now recognise and acknowledge that the protection of the forests is absolutely vital in preventing devastating climate change. Not only do trees continue to capture and store Carbon, when destroyed by fire they release harmful CO2 in to the atmosphere. At last their value is now substantiated financially, with carbon credits in the Voluntary Carbon markets averaging over $6 per tonne of CO2 equivalent and the highest values being placed on reforestation projects at over $8/tCO2e. So not only good for the environment, growing trees is now at long last serious business.
Willow Rivers recommend investing in sustainable rainforests in Costa Rica, Indonesia, Malaysia and Sri Lanka not only for the carbon credit potential, but also for the actual goods produced. In conjunction with local governments these re-forestation projects grow teak and aquilaria, both forecast for thriving demand as global populations swell. Permits ensure the forests are sustainable aka as soon as harvesting occurs a rest-period is enforced followed by healthy re-forestation. With harvesting periods between 8 and 18 years, investors choose when to harvest portions of the forest so producing “waterfall returns” and mantaining maximum soil health. These types of forest investments can also be structured via SIPPS and are able to give additional tax advantages.
Further than carbon credits and actual sustainable wood harvesting, even further values are being placed on forests by some organisations such as their rainfall production, water storage and weather moderation capabilities. Whilst the relevant values are yet to be justified and proven, there is no doubt that the future is looking good for trees.
