The new fund promises commercial returns on what will be mixed forestry-for-timber and permanent-reforestation projects, including cashflow generated by the issuance and sale of the carbon credits issued from the permanent reforestation activities.
Mark Wishnie, chief sustainability officer and head of landscape capital at BTG Pactual Timberland Investment Group , says that he sees strong demand from investors and companies for these projects.
Article 6 governs carbon emissions trading and, to date, there has been no agreement about whether there will be a jurisdictional approach to such schemes.
This would mean that nature-based projects that generate carbon credits through sequestration could no longer be used directly by corporates based elsewhere who are seeking to offset their carbon emissions as part of net-zero or net-negative emissions.
“My view is that while jurisdictional carbon offsetting makes a huge amount of sense, it may actually be too complicated ever to implement,” he says.
“Governments who are waiting for deal-flow driven by Article 6 are missing an opportunity while the voluntary carbon market is thriving,” he says.