In Paris I bought an apple for 50 cents.
I paid both for the apple and the chain of actions that brought it to me; the growing of the apple, the transport of the apple, and the sale of the apple.
By the end of the chain growers of some products may receive only 1-2% of the price I paid. That’s 1 cent if they’re lucky.
But the growth of the apple has done other valuable things that I didn’t pay for.
The apple tree stores carbon and produces oxygen. These are called ecosystem services.
So, can we put a monetary value on these processes too?
He is based in Peru where foresters only see 1-2% of the price for the wood they produce. Without sufficient profits they may decide to cut down their forest and start a more lucrative cocoa plantation.
On a large scale this can have global consequences – forests are a huge carbon store, with deforestation accounting for up to 18% of global carbon emissions, more than transport and aviation combined.
There is a shared value for everyone in the maintenance of the Peru’s forests, but creating a system of monetary reward for foresters is complicated.
This week, Norway, Germany and the UK have committed 5 billion dollars to ensuring the preservation of tropical forests, but if the system doesn’t incentivize those who own and work on the land, it may not help anyone.
The valorization of carbon credits and their certification requires numerous intermediaries, and an over-regulated system could see the money disappear to the wrong places.
Hajek calls for simplicity.
“If we set up the chain with a lot of actors, as is happening at the moment, then it is unlikely that much of the benefit from forest carbon credits will reach the base of the market.
“The carbon market is not a mature one; we need to build a Volkswagen instead of a Porsche.”
We can talk about whether Volkswagen was the best example another time, but it is fair to say regulations don’t always work in the way there intended.
Frank is involved in the development of a system that aims to strike a fairer balance between the product and the ecosystem service. As an intermediary he aims to share the risk and reward with producers by signing contracts that commit to the forester receiving a fair final price of the product.
For a greener planet, everyone needs a fair bite of the apple.