Sunshine-Empire & EmMax

At the end of September 2011, the occasion being the World Tourism Day (27th September), the Collaborative Partnership on Forests (CPF), an organisation of which the UN Food and Agriculture Organisation (FAO) is also a member, promoted its view on the positive influence that ecotourism has on forestry. Moreover, an increasing number of governments are considering ecotourism as a means to promote sustainable forestry management and support local communities.

Despite the grave economic situation in the last couple of years, according to the World Tourism Organisation (WTO), international tourism has demonstrated healthy growth, with almost 5% in the first half of 2011, setting a new record of 440 million arrivals, according to the UN WTO. Moreover, in the UNWTO long-term forecast, Tourism Towards 2030, released in October 2011, international tourism is expected to continue to grow in a sustained manner in the next two decades. Ecotourism, as a niche within the larger tourism industry, is one of the fastest growing segments of tourism worldwide, according to the FAO. Therefore, the perspective for long-term sustainable economic growth has the potential to stimulate also forestry funds to participate on the forest ecotourism market. In addition, through forest ecotourism, private companies will have the opportunity to make profit out of socially responsible investments.

Ecotourism involves responsible travelling to natural areas, with the purpose to educate the traveller without the environmental and cultural impact that may come as a negative consequence of traditional tourism. By definition, the more preserved a tourist site or object is, the more attractive it will be for potential visitors. And as forests and their wildlife are among the primary settings for ecotourism activities, it is only natural to assume that promoting forest preservation and investing in ecotourism would be the way to attract more ecotourists.

Forest ecotourism may be particularly beneficial in developing countries, which generally experience more difficulties in promoting sustainable forest management and obtaining much needed investments through forestry funds or other sources of financing. According to Edgar Kaeslin, Forestry Officer in Wildlife and Protected Area Management at FAO, "Ecotourism has a far greater potential for contributing to income and livelihoods in poor rural communities than what is realised". Therefore, the possibilities that ecotourism provides in terms of forest preservation and local economy need to be looked into, especially considering the extent to which some indigenous communities depend on forests for their livelihood. In addition, ecotourism brings more income to local population than commercial conventional tourism that relies mainly on mass hotel chains and large tourist companies.

One of the most famous examples of ecotourism in developing countries is the interest attracted by the endangered mountain gorilla species in Uganda. Ecotourism activity surrounding the gorillas significantly helped to boost the economy of the country and at the same time led to a rise in the numbers of mountain gorillas. Another African country where forest tourism is likely to benefit from increased governmental support is Tanzania, since the Ministry of Natural resources and Tourismrecently introduced the Tanzania Forest Fund among whose purposes is to support sustainable utilization of forest resources.

Despite its indisputable benefits, however, ecotourism still poses certain dangers to natureand local communities. A lot of activities which are advertised as eco-friendlymay lead to damage of natural sites and there is always the risk that due to the growing popularity of ecotourism, possible participation of forestry funds and involvement of larger tourist companies may diminish the financial benefits to local communities.

Nevertheless, at present, the benefits of ecotourism seem to outweigh the risks, specifically with regards to forest tourism, which has turned into a successful way of promoting forest conservation. One of the ways to further increase the positive influence of ecotourism is to ensure the involvement of local population into ecotourism services, which may be achieved through training and education. In addition, income from forest tourism should be used in order to promote sustainable forestry management.

In the last few years, the UN FAO has been providing technical assistance to various countries such as Laos, the Philippines and Tunisia to develop ecotourism as a sustainable forest use and recently started implementing an $18 million programme in collaboration with Pacific islands (Fiji, Niue, Samoa and Vanuatu) aimed at developing ecotourism as a major component of sustainable forest management. This is undoubtedly a clear sign for the potential benefits of forest tourism.

The international community has indicated that forest tourism is an excellent way to increase the non-timber value of forests and therefore it will continue attracting the attention of both governments and private forestry funds.

Labels: Forest, Forestry, Green, Sustainable, Tourism, Toward

Sustainable timber investments are generating some good press lately as Wood for Good, a UK organisation working to increase demand for sustainable wood products, released at the 2011 Timber Expo last month the first ever Timber Industry Manifesto. Through this document, Wood for Good "aims to promote the suitability and sustainability of wood as a building material to the construction and logistics sectors and associated professionals such as architects and design engineers."

This new declaration clearly shows that the UK timber industry is committed to cultivating and utilising domestic timber resources in a manner that is safe for the environment, beneficial for the consumer and good for the economy.

But what does the Manifesto mean for people, who are new to the industry and are yet to put their money into timber investments?

First and foremost, the Manifesto sheds light on the economic scope of the industry in the UK. With its annual value of £18 billion and over 150,000 jobs, the timber industry is showing no signs of slowing down, even when other commodities are seeing volatility in prices and profits. This proves that these investments are great for balancing out your investment portfolio and providing revenue when stocks and bonds are not performing all too well.

In addition to the financial value of timber investments, the Manifesto presents the environmental benefits of sustainable forests. These projects not only help maintain the biodiversity within certain areas, but also provide a variety of ecosystem services. Add to that the carbon sequestration capacity of forests, and you get a genuine feel-good business venture.

Investors in sustainable forestry can help the UK increase its wooded land surface from 12 per cent to 16 per cent. This way, by 2050, the natural carbon sink might be able to compensate for as much as 10 per cent of UK's national carbon emissions, bringing them closer to the emission reduction goals under the Kyoto Protocol.

The quality of timber as a building material is an added benefit, which explains the high demand domestically and internationally. Wood production is much more energy-efficient than the manufacturing of other common materials, such as concrete and metal. To get a better idea of its competitive advantage, consider that it takes 24 times less energy to produce timber than it does to make steel.

But the products from your potential investment won't be a preferred construction material only because of its energy efficiency. Wood has the ability to prevent heat leakage through building walls, thus, providing for good thermal insulation. The Manifesto claims that wood's thermal insulation properties are five times better than those of concrete, 10 times better than brick and 350 times better than steel.

Last, but not least, the Manifesto makes a seven-point proposition addressed to the UK government. The purpose of the proposition is to advise officials on ways to support existing and encourage new sustainable timer investments. Among them are a reduced value-added tax on sustainable timber and timber products; a government endorsement of the eco material and making it the material-of-choice for public construction projects; recognition for its carbon sequestration qualities; government incentives for recycling timber products.

While most of these recommendations, if approved, will give a huge boost to the industry as a whole, subsequently giving greater incentives for investors to place their money on green, some of them do seem a bit impractical. They call to governmental favouritism toward the timber industry, which goes against common capitalist market forces. This, in turn, may place other industries at serious disadvantage on the competitive market, especially in tough economic times. Government officials will also be less likely to side with one industry due to potential conflict among lobbyists. So investors should not rely exclusively on heavy political support.

With that said, there are a number of government incentives available for the development of forestry investment projects across the UK. For example, revenues from timber investments are exempt from inheritance and income tax. Also, the Woodland Improvement Grant (WIG) provides funding for forestry investment projects to support the benefits that these initiatives deliver to the public - biodiversity, scientific advancements and accessibility to the public. Therefore, some of the funds under WIG are the Woodland Biodiversity Action Plan, Woodland Sites of Special Scientific Interest (SSSI) Condition Improvement and Woodland Public Access.

The Woodfuel WIG is a new grant, which supports the sustainable production of woodfuel and other timber products. It is designed to fund the development of roads and inventory that are essential for harvesting and transporting timber out of the forest. At the local level, the Scotland Rural Development Programme (SRDP) provides grants, which can be used towards buying equipment to harvest and process woodchip or pellets.

The Timber Industry Manifesto is a must-read for prospective investors. They will gain some insider information on what makes forestry an attractive alternative to traditional investments.

Timber Investments is an information portal keeping you up to date on timber market facts, trends, news and forestry investment opportunities. The value of investments can go up or down according to market conditions.

Labels: Calls, First, Industry, Investments, Manifesto, Sustainable, Timber

A recent article in the NY Times examined the case of a Northern California forest, which is not cashing in so much on the timber it produces, but on keeping its trees standing. The forest trust managing the lot has adopted a new management paradigm, which spares most of its trees, preserves the rich biodiversity, stores carbon and filters drinking water all the while earning a substantial income for its owners- in the millions to be exact.

The majority of forestry investments rely on income from sales of timber and timber products. With the construction and biomass industries gaining momentum, timber as a commodity has enjoyed increasing demand in recent years. There are fewer forestry management companies, which utilize their trees for their carbon sequestration and, as a result, carbon credit-earning potential.

"People have to become much more open-minded before we see mainstream industry moving in that direction" and relying on profits from carbon credits, explained in an interview for the NY Times Laurie Wayburn, co-founder of the Pacific Forest Trust, which manages the 2,200-acre Van Eck plot.

The nonprofit, based in San Francisco, seems to have found a solution to the decade-long tension between the local logging industry and environmental activists by redefining the economics of forestry investments.

According to the NY Times, the management style employed by the trust is the so-called "uneven-age" method, where clear-cutting of large areas is substituted for removal of select trees. The method encourages more rapid forest restoration. At the same time, larger trees, which store more carbon dioxide, are spared, increasing the overall sequestration capacity of the forest.

The management approach seems to be paying off with time. Pacific Forest Trust took over the Van Eck forest in 2002, when it was comprised of 18,000 board feet of wood per acre. In 2011, thanks to the new management method, forest density has more than doubled to 40,000 board feet per acre. The trust has expressed its ambition to reach a density level of over 100,000 board feet per acre.

To accomplish the goal, 50 per cent or less of annual growth is being harvested. This way, the trust collects only the "interest" earned on the forest's growth, never the "principal investment" of timber. Higher density means the trust can harvest more wood from larger, higher-value trees.

"It's not just for the good of the trees, but for the good of the bank account,"expanded by sales of carbon credits, explained Wayburn for the NY Times. The reported carbon credit sales between 2005 and 2009 have brought in more than $2 million for the trust.

The primary buyers of carbon credits are California industries that have otherwise failed to successfully reduce their emissions. The Van Eck Forest was one of the first carbon sequestration projects certified by the California Air Resources Board (CARB). According to the 2006 Global Warming Solutions Act, California needs to reduce its carbon emissions by 25 per cent. The CARB certification recognizes the Van Eck Forest as successful in helping the state reach its goal. California is also expected to implement statewide compliance regulations in 2012, placing limits on industry emissions and enforcing a cap-and-trade scheme. This can boost further the demand for forestry carbon credits.

What is more, trust officials tell the NY Times that, with timber prices tumbling, earnings from the conservation project and the sale of carbon credits exceed what the group is taking in from timber sales.

As forestry funds are exploring new ways to maximize investment profits in a time of economic crunch, they need to look to and learn from cost-efficient and effective management methods such as those employed by Pacific Forest. Cutting trees and exporting the logs can be quite costly; keeping trees intact eliminates expenditure on harvesting and transportation. Investors also need to keep in mind that the value of forests doesn't always lie in the number of logs exported, but also in the environmental and ecosystem benefits they carry, and the Van Eck case is a good example of that.

The competitive economic environment, which currently defines the timber industry, has been putting a lot of pressure on companies to differentiate themselves and to diversify their profit sources. Producing and selling carbon credits might just be the most effective as well as most ethical way to do so.

"To be competitive, we need to become part of a forest economy, not just a timber economy" while utilizing the profitability of carbon credits explained Wayburn. Van Eck is surely redefining the way in which forests do business.

Labels: Californian, Forest, Forestry, Management, Shows, Sustainable