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G8 Gives Green Light To REDD

August 11, 2009Article by Ray Withers

The latest G8 climate change summit has declared support for REDD – Reducing Emissions from Deforestation and Forest Degradation – to cut carbon emissions by helping the introduction of hardwood investment across the tropics.

The G8 – the world’s richest countries including the UK – has promised to bring in laws stopping the importation of illegally felled hardwood that inflicts long term damage to the carbon dioxide forest ‘sponge’ that soaks up the world’s greenhouse gasses.They will also encourage forestry investment management and work to reduce carbon emissions.The support from the G8 was announced after a summit meeting in Italy.

A statement was issued pledging help to timber investment management projects and acknowledging that illegal deforestation accounts for 20% of the world’s carbon emissions.“Forests are an essential repository of biological diversity and key to the livelihoods and rights of many people, we remain engaged in seeking the reduction of emissions from deforestation and forest degradation and in further promoting sustainable forest management globally,” said the statement.

Now ethical investors can spend a relatively small investment of £10,000  – often less than a bank or building society is seeking for a cash deposit on a home – to buy 300 hardwood trees in to replant an Asian rainforest.The investment also covers the costs of employing local villagers in places like Anuradhapura, Sri Lanka, to cultivate and harvest the forests.

Property Frontiers, an Oxford, England, based real estate investment consulting company, is offering this multicoloured green – or if you prefer, REDD, choice.Their schemes allow a minimum £10,000 ‘seed capital’ that can grow with the trees in to about £250,000 over 15 years.

These projections are based on a lumber price of £0.72 per board foot for the first thinning, increasing at an annual rate of 6% for the subsequent thinning and final harvest. The 5% profit share is retained as a harvest fee.The timber company has allowed a generous 10% for harvest and processing costs, which covers the milling the trees.

Everyone benefits from the investment – the investor from the return on capital and the workers and their families farming the forests who receive better pay that stimulates better living conditions than they would otherwise achieve.These investments also give UK taxpayers other benefits, like rollover relief on capital gains tax when disposing of the investment and SIPP tax breaks if the investment is managed within a pension scheme.

Author

Ray Withers

Ray has over 17 years’ experience in the international property market and bought his own first international property investment back in 2002. Aside from running Property Frontiers, Ray has been involved in residential, hotel, student and commercial property investment and development in both the UK and overseas and co-wrote "Where to Buy Property Abroad - An Investor's Guide". As Founder and Trustee of the Frontiers Foundation, Ray is directly involved with many of its projects to ensure they have a direct and tangible impact in individual communities across the globe. He is passionate about property, travelling, scouting out new opportunities and finding time to spend with his young family.
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