Forest Trends seeks to build incentives for the promotion of ecosystem services and conservation projects, by working with policy-makers, businesses, communities, and investors to create new environmental markets.
Geographic Area of Impact: Global
Model: Leveraged non-profit
Number of Direct Beneficiaries: N/A
Annual Budget: USD $5.22 million (2013)
Percentage Earned Revenue: 11% (2013)
The Social Problem
With over thirteen million hectares of forests cut down every year, emissions from deforestation account for 18-22% of global anthropogenic greenhouse gas emissions. In addition to climate regulation, natural ecosystems play a central role in water regulation, water purification, and erosion regulation. Creating national and international polices that value markets for ecosystem services is the key to making sustainable management of our natural infrastructure an integral part of our development and investment decisions.
Innovation and Activities
Forest Trends works on three interconnected pillars that are designed to catalyse the successful development of emerging environmental markets: 1) access to information, 2) capacity building, and 3) direct implementation of projects. Firstly, Forest Trends focuses on transparent information because it is critical in the early stages of any emerging market, Forest Trends created the Ecosystem Marketplace as the go-to resource for free, reliable, and broad-based market intelligence to inform and influence new capital investments in sustainable forestry and land use globally. Ecosystem Marketplace has a readership of 1.3 million in 168 countries including investment funds and governments. The data from EM’s research, in turn, is used to create new regulatory systems in countries as diverse as Korea, Chile, and South Africa. Leveraging this data, Forest Trends has also created partnerships with several financial institutions such as JPMorgan Chase to guide their investment decisions in environmental markets such as green bonds.
The second pillar focuses on developing capacity in biodiverse nations, because the individuals and organizations doing conservation work on the ground can only take advantage of these emerging markets if they understand how to do so. Forest Trends acts as both the expert body and the global convener. Since 2003 it has brought together over 20,000 people – including environmental groups, government officials, and community organizations – who are working in their respective countries on different elements of ecosystem services, such as designing legislation, developing strategies for pricing and marketing, and monitoring performance.
The third pillar is to create demonstration models of how these emerging incentives and payments for ecosystem services transactions actually work in practice. Currently, Forest Trends houses six distinct initiatives at the forefront of developing market-based solutions to environmental problems. As one example, Forest Trends worked with the Surui tribe in the Brazilian Amazon in a precedent-setting deal that preserves 250,000 hectares of rainforest through a carbon credit scheme. The financing includes an upfront payment and annual future payments to a tribal trust fund that allocates funding for health clinics and agroforestry projects. Other initiatives underway include creating a finance incubator to support ten different watershed projects across Peru and a partnership with several Chinese agencies to set up a watershed payment program for the city of Beijing.
Michael Jenkins pioneered the concept of payments for ecosystem services while at the MacArthur Foundation in the 1990s. He founded Forest Trends in 1998 to advance these emerging environmental markets. Forest Trends is widely credited for advancing practical know-how of payments for ecosystem services, which is gaining widespread momentum as a powerful conversation tool. For his work, Michael Jenkins has received several awards, including the Global Leader on Sustainable Forestry (2003), Chief Global Stewardship Award from the US Forest Service (2005), and Skoll Foundation Social Entrepreneur Award (2009).
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