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  • “Timber investment” has double appeal

    2009 - 11.30

    The Chief timber officer at the U.K alternative investment market listed Phaunos Timber Fund,  Liane Luke believes that public awareness of the environmental value of plantation forests is well overdue. “The more plantations there are, the more carbon you’re sucking out of the air. People need to get less sentimental about forests, it’s like growing corn.”

    Put simply, using wood to make energy produces less carbon than burning coal, especially when the trees are replanted, because the trees continue to capture the carbon dixide from the atmosphere as they grow. Phaunus defines part of the sustainable practice of forestry plantations as cutting no more trees than you plant.

    Additionally, because the trees trap carbon dioxide, plantation owners may also be able to sell carbon offsets to polluters who have to meet tough emissions caps under prospective climate laws. The investment apppeal of forestry is therefore twofold…the new rewards to store carbon in trees combined with rising demand for wood to replace coal and natural gas are driving the forestry investments market.

    Referring to timber investments, Caelim Parkes from Westbury, a US manager of alternative investments says, “As uncertainty recedes(referring to carbon offsets) we think it will see substantial growth.”

    The European Union has set goals to get 20 percent of its energy from renewable sources by 2020, fuelling a further wood energy boom. Clenergen, an international biomass company is in the process of creating forestry plantations for export from Guyana to Europe and the United States. Wood energy markets appear to be on the cusp of a being a dominant force in renewable energies.

    The Timber Investment Blog is sponsored by Greenwood Management. For more information on investing in Forestry please click here

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