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The Price is Right

For the first time ever, a company is attempting to put a market value on an ecosystem.

At the end of March, reports CNN.com, the UK private equity firm Canopy Capital announced that it bought 371,000 hectares of the Iwokrama Reserve rainforest in Guyana. The company invested because they believe that forests will soon come to be valued for the services they provide—that being rainfall, carbon storage, climate regulation, and biodiversity. Along with investing, the firm also wants to help create an index that assigns value to forest services. "The market for these ecosystem services doesn't exist — therefore it can't go any lower," said Canopy's director Hylton Murray-Philipson to mongabay.com. "We see this as an opportunity to drive capital to the canopy."

The idea of seeing a forest for more than it’s lumber is evocative of OnEarth’s latest cover story (“The Giving Trees," by Sharon Levy), which talked about scientists working to determine the amount of carbon stored in old-growth forests. Should forests be shown to store more carbon than originally thought, the research provides potential economic incentive to save forests. On this same line, the deal in Guyana indicates that throughout the world, forests are being considered for more than their lumber.

Should Canopy Capital garner any cash from the investement, eighty percent of the profits will benefit the local people. The deal is about, "creating a whole new paradigm for the way in which the world economy values the environment," said Canopy Capital partner Andrew Mitchel to CNN. See the whole story about Canopy Capital's purchase and future plans, as well as an interview with Hylton Murray-Philipson, on mongabay.com.

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Molly Webster is the assistant editor at OnEarth magazine. She is also the science producer for The Takeaway, a radio production from Public Radio International, the New York Times, and the BBC that's causing a radio revolution. Works appear in Scien... READ MORE >