Bangkok, Thailand (29/09/09):  A survey of investors with approximately US$7 trillion of assets under management has shown significant support for an expanded carbon market mechanism which would address the estimated 20 percent of global carbon emissions due to deforestation and forest degradation.

But the 2009 Forest Carbon Investor Survey, conducted by the Brunswick Group on behalf of the WWF Forest Carbon Initiative, found investors looking for initial public financing viable policy frameworks, and more certainty from both international agreements and national legislation, before private funds can be mobilized.

The investment community is looking to December’s UN Climate Conference in Copenhagen to add substance to REDD (Reduced Emissions from Deforestation and Degradation) as the over-arching policy framework for combating forest related emissions.

“Any global deal on climate change must take into account the significant role forests play in combating global warming,” said James Leape, Director General, WWF International. “If strong policies are put in place to ensure real reductions in emissions and real benefits to forest communities, investors can play a key role in supporting REDD.

“Agreement in Copenhagen – coupled with progress on national initiatives – will be a signal to investors that REDD can and will succeed, and will ensure forests are more valuable standing than cut down.”

The key findings from in depth interviews with 25 senior institutional money managers, sell-side analysts and specialist sustainability investors in Europe, the U.S. and Asia-Pacific are:

§        

There is significant potential for a multi-billon dollar expanded carbon market, however substantial preconditions still need to be met for REDD to succeed.

§        

Agreement at Copenhagen and legislation in key countries including the U.S. are crucial pre-requisites.

§        

Public sector funding will be vital before a market-based approach can take effect.       

• Problems of verification and monitoring can be addressed if there is a strong political framework in place
• National governments must put in place robust and durable legal frameworks to create certainty for investors

The survey found investors have a high degree of knowledge about REDD and see strong potential in a future carbon market. However, they are also unlikely to invest in the market without clear political commitment, funding and on-the-ground implementation by key developed and developing countries.

The investors also believed that a compliance market in forest carbon would provide powerful incentives to reverse deforestation in forest countries

More than one-third expect a forest carbon market will evolve from a voluntary to a compliance market over the next five to fifteen years if certain conditions for a market-based approach can be met. This will require action from governments, including public sector funding, to lay the foundation for the market and support efforts by forest nations to build legal and technical capacity for REDD. 

Key milestones sought by investors are agreement at the Copenhagen climate talks with support from major economies such as China and India, as well as the passage of U.S. climate change legislation. A strong legislative framework in forest countries is seen as core to addressing problems of verification and monitoring that have hampered agreement on REDD in the past.

Investors have a favorable view of proposals on REDD, supported by WWF, which recognize the value of a phased approach including pilot projects.

""REDD is critical to a climate solution, and finance is critical to making REDD work,” said Donald Kanak, Chairman of WWF’s Forest Carbon Initiative. “In the long term, private capital could play a major role, if certain conditions are satisfied. We need governments to step up to create sufficient financing in the near term to support forest countries’ efforts to become REDD-ready.""

Responding to the findings in the survey, Zulfira Warta, REDD Project Development Coordinator, WWF-Indonesia, explaining, ""The potential for a carbon finance is indeed huge, however, in making it to reality requires a strong and credible policy tool and legal framework. It is necessary to reduce risk and provide certainty to the parties related to these activities, including investors and the people who depend on life in the forest.""

Further information

Press information and associated material can be found on www.panda.org/climate

Participants in the survey were drawn from leading institutions in the United States, Europe (United Kingdom, Germany, Switzerland, Republic of Ireland, France and the Netherlands) and Asia-Pacific (Japan and Australia). Together the firms included oversee at least US$7 trillion in assets under management and include: Allianz Global Investors, Barclays Capital,  Blackrock, Citigroup, EKO Asset Management, F&C Asset Management, Fortis, Generation Investment Management, Impax Asset Management, Jupiter, Kaufman Bros, KBC Asset Management, Newton, Nikko Asset Management Co., Pictet, RCM Capital Management, Swiss Re, UBS. .

The survey was conducted by Brunswick Research, a global opinion research firm specializing in research around the world for FTSE100 and Fortune 500 companies. In-depth interviews for the qualitative survey were conducted August 18 – September 17, 2009. The views reflected are those of the survey participants and are not attributable to WWF.

About WWF’s Forest Carbon Initiative

The WWF Forest Carbon Initiative brings together WWF’s longstanding efforts on conservation, climate change and sustainable development. In close coordination with our local offices and programs around the world, we’re working to advance support for an agreed global policy framework for REDD and support efforts to implement REDD on the ground, including: identifying and supporting country-level implementation through building capacity, testing approaches and implementing activities to achieve national REDD programs. FCI undertakes research and convenes thought leaders from across countries and sectors to advance the dialogue on critical issues around REDD, such as financing mechanisms and implementation challenges, to achieve not just climate benefits, but broader benefits for biodiversity and the people who depend upon forests for their livelihoods.  WWF’s Forest Carbon Initiative seeks no net greenhouse gas emissions from deforestation and degradation by 2020.

More information about WWF’s Forest Carbon Initiative can be found on www.panda.org/forestcarbon

For further information:

Melissa Tupper, WWF, WashingtonD.C., +1 (202) 569-0842, Melissa.Tupper@wwfus.org

Oliver Phillips, Brunswick Group, New York, + (917) 861-0331, ophillips@brunswickgroup.com

Maria Figueroa Kupcu, Brunswick Group, New York, +1 (212) 333-3810, mkupcu@brunswickgroup.com

Zulfira Warta, REDD Project Development Coordinator WWF-Indonesia, +6281510365320, zwarta@wwf.or.id

Fazedah Nasution, Communications Officer Climate and Energy Programme WWF-Indonesia, +6281315800396, fnasution@wwf.or.id