Hancock Natural Resource Group Announces New Global Forest Carbon Sequestration Investment Program
THE HAGUE, The Netherlands, Nov. 20 /PRNewswire/ -- The Hancock Natural Resource Group (HNRG) told delegates at the COP6 meeting here that it will introduce a new carbon sequestration investment program.
Bill Coleman, president and CEO of HNRG, and Dr. David Brand, who will be leading the establishment of the new global, Kyoto Protocol-compatible program for HNRG, told delegates that their organization does not expect to announce details of the first investment product under this program until the first quarter of 2001.
"We believe the role of forests in helping industry manage future reductions in net emissions will find acceptance in both the environmental and business communities," Coleman said.
"We are excited about opportunities in the emerging green economy for forests and the prospect of developing projects that combine both environmental and financial returns. We believe the re-establishment of forests, using sustainable, market-based approaches with environmental safeguards, can address many of our global environmental challenges."
Dr. Brand said, "Investing in new forests can be part of a portfolio of industry responses for the need to reduce net greenhouse gas emissions. Our program is a logical extension of HNRG's business model by unlocking commercial returns from the environmental services of forests" (see sidebar 6 at http://www.hancocktimber.com).
Trees absorb CO2 to grow, and hold carbon in their trunks, roots and crowns. The process of accumulating carbon in trees is called sequestration, and these growing forests are called a carbon sink.
The Kyoto Protocol identifies several market-based options for reducing net greenhouse gas emissions, including the possibility of a market for trading carbon credits represented by sinks.
Greenhouse gases are believed by scientists to cause global warming (see sidebar 1 at http://www.hancocktimber.com). According to the US Environmental Protection Agency, the 10 warmest years in the last century have occurred since 1983, with seven of them since 1990. Recent evidence shows the 20th century was the warmest in the last 1,000 years. The 1990s were the warmest decade and 1998 was the single warmest year of the past millennium.
Dr. Brand was deputy chief executive officer of Australia's largest forest agency, State Forests of New South Wales, before joining HNRG (see sidebar 4 at http://www.hancocktimber.com). Based in Sydney, he is director of carbon programs for the Hancock Natural Resource Group.
"The green sector, in particular, is emerging as one of the most rapidly growing areas of investment in many regions of the world. Catering to these investors will require products that meet a range of social and environmental criteria."
HNRG's new program will be based on seven broad principles (see sidebar 3 at http://www.hancocktimber.com) ranging from transparency in the calculation and verification of carbon stocks in projects, to a commitment that no native forests will be cleared for the establishment of newly planted forests.
"We intend to acquire marginal or degraded agricultural and grazing lands. Wherever possible we'll capture other social and environmental benefits including watershed protection and biodiversity enhancement," said Dr. Brand (see sidebar 5 at http://www.hancocktimber.com).
HNRG gave as examples projects that could act as carbon sinks: Reforestation of bottomland hardwood in the Mississippi River delta Reforestation of eucalyptus on overgrazed land in Australia's Murray-Darling Basin HNRG expects the program initially to be backed by reforestation projects in the US, Australia and South America.
Signatories to the 1997 Kyoto Protocol are seeking ways to reduce greenhouse gas emissions relative to 1990 levels (see sidebar 2 at http://www.hancocktimber.com).
Coming in to COP6, lead US negotiators have repeatedly stated that carbon sink provisions must be implemented to make CO2 emission reductions cost effective.
"Kyoto represents a significant challenge. The world needs a range of instruments including renewable energy sources, shifts in the fuel mix for electricity generation, demand side energy management and land-based carbon sink projects," said Dr. Brand. "Having a mix of options to address global climate change increases the odds of a positive environmental outcome at reasonable costs," he added.
"Many of the countries here at COP6 believe that the provisions of the Kyoto Protocol not only yield the potential for better land use practices, but also create new opportunities for farmers and forest managers", said Dr. Brand.
Also at the COP6 conference, Ben Feldman, environmental services director at The Environmental Resources Trust, Inc., said, "Finding ways to realize the financial value of environmental benefits is one of the keys to harnessing the power of markets to meet society's environmental aspirations. Programs that produce financial returns from avoided emissions put the market to work on behalf of the environment."
HNRG does not intend this press release to constitute an offer to sell, or the solicitation of an offer to buy, any securities. Once specific investment products have been designed, they will be offered only pursuant to the terms of an offering memorandum prepared for such purpose. HNRG does not presently intend to register any such product under the United States Securities Act of 1933 and any such product may not be offered or sold in the United States absent such registration or an applicable exemption from the registration requirements of the Securities Act.
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