Forest Trends Wins MacArthur Prize

Ecosystem Marketplace publisher Forest Trends will receive a $1 million MacArthur Award for Creative and Effective Institutions – a prize the Washington Post likens to the “Genius Awards” that the MacArthur Foundation grants to individuals who show high promise. The recipients were announced on Thursday, and Forest Trends will use the money to expand its work in forest conservation.

6 February 2015 | Nine organizations around the world are to receive MacArthur Awards for Creative and Effective Institutions, including Ecosystem Marketplace publisher Forest Trends, which is being honored for its work in forest conservation. The $1 million prize “recognizes exceptional nonprofit organizations who have demonstrated creativity and impact, and invests in their long-term sustainability with sizable one-time grants.”

Since its inception more than 20 years ago, Forest Trends has been focused on recognizing the economic value of our natural ecosystems – and upending the way people think about the value of a forest. “When we started Forest Trends, our goal was to create incentives around what we call ecosystem services,” says Michael Jenkins, CEO of Forest Trends. “So, in a sense, making that tropical forest more valuable than an acre of soybeans.” Simply put, forests are worth more alive than dead.

“Nature provides benefits to people, and without those resources or services protected, we’ll lose them, and right now the value of nature is lost in the equation of economic development,” says Sally Collins, former Associate Chief of the U.S. Forest Service and a Forest Trends board member.

Among the many benefits – the “ecosystem services” – that nature provides, forests act as giant sponges for the carbon dioxide in our atmosphere, serve as enormous filtration systems that provide clean water to millions of people, and contain an unfathomable amount of biodiversity, the advantages of which we haven’t even begun to realize.

To make these ecosystem services part of the world’s economy, Forest Trends has been developing market-based financial tools that reflect real, measurable economic values in benefits from nature like clean air, clean water, and biodiversity.

“They had this thought that one way to save forests might not be just to put up fences around them and create protected areas, but actually to create markets for the sustainably harvested products and services of a forest,” says Matt Arnold, Global Head of Sustainable Finance at JPMorgan Chase.

“To make that a reality, you’re really creating new marketplaces,” says Jenkins. “You need to not only have the scientists on the ground to help you figure out what that service is that’s being delivered – clean air, clean water – but you also need the financial institutions that say, OK, just like we have markets for pork bellies, we’re going to create market instruments to value clean water.”

Part of this new paradigm involves bringing indigenous people living in the world’s forests into the economic equation. In a groundbreaking deal, Forest Trends supported one such community in the Brazilian Amazon, the Paiter Surui, in bringing their stake in the forest to the carbon credit market.

“Forest Trends joined with the Surui,” explains Jenkins. “And we worked them through this series of steps, which is measuring the carbon in their forests and putting that into a technical report to be able to go to the marketplace and say, ‘here’s our asset, here’s the amount of carbon we have captured and stored in our forests,’ and that’s what people in the offset markets are looking for. We helped them create the credit.”

Establishing this kind of incentive for local communities to maintain their forests – rather than sell the trees to logging, mining, or agriculture interests – is a crucial factor in the climate equation.

Looking Ahead to COP21 in Paris

Recognizing strategies that actually work is especially important now, coming off of the climate change talks last December in Lima, Peru, and looking ahead to the next Conference of the Parties (COP) in Paris, at the end of 2015, negotiations characterized by the Guardian as the “world’s last best chance to reach an agreement on cutting carbon emissions.”

The participation of indigenous people in that process is key, and their strong presence was notable at Lima’s COP, which created an “Indigenous Pavilion” as part of the event. Presenting during the negotiations was a consortium of nine environmental and indigenous organizations called AIME (Accelerating Inclusion and Mitigating Emissions).

Launched two years ago and funded by USAID, AIME works throughout Latin America, focusing on the connection between the traditional stewardship of the forest by indigenous people and the difficult task of reducing emissions in the atmosphere from forest loss. Forest Trends leads this AIME coalition, an example of how they often serve as the connective tissue between government, businesses, financial institutions, environmental groups, and indigenous communities.

Forest Trends’ commitment to more creative, inclusionary strategy seems to be reflected in the turn of negotiations in the COPs of recent years. December’s tense negotiations finally yielded the unanimous agreement of 191 countries and the European Union on a “Call to Action.” The document, explains Forest Trends’ Gena Gammie, “offers moderate but still visible momentum forward and encourages broad ownership of the responsibility to confront climate change, both of which were nowhere to be found in the aftermath of the same global meeting, five years ago.”

Rather than a top-down, one-size-fits-all solution, more and more it is looking like the kind of innovative bottom-up framework for a solution to climate change is required–a view that is supported by the MacArthur Foundation’s recognition of the work of Forest Trends.

Bringing Everyone to the Table

“When we started Forest Trends,” says Jenkins, “we talked about this vision of being small, global, and nimble. The idea was, how can we play a role at bringing all of these different groups together. Not only environmental groups, but the businesses, the governments, the local communities, the financial institutions–everybody that needs to be together to build this new economic system, this new market.”

Chief of the Surui community, Almir Surui, echoes these sentiments: “Nothing can happen if we don’t learn how to create partnerships for the common good of all.”

It’s a strategy that is paying off with significant impact–for all of us. “The way forests are managed around the world, whether in Western Canada, Brazil, and Indonesia, has all changed, based on this idea that there’s a shared value and that you can put a market price on it,” says JPMorgan Chase’s Matt Arnold.

And this impact has come home, with real financial gain. “Forest Trends has taken these ideas that they have executed internationally and brought them into the U.S. government, into U.S. federal agencies like the Forest Service,” says Collins. “Environmental markets bring new money into conservation in this country in a way we’ve never seen before.”

Climate change strategy may seem convoluted, murky, hopeless. But Forest Trends has found some clarity and elegance of vision in the tangle.

“The end game of all of this,” says Jenkins, “is when you make tropical forests and other ecosystems more valuable than the things that are currently threatening them.”

In the face of the daunting problem of climate change, proven solutions like the strategies of Forest Trends can offer a much-needed glimmer of hope. The MacArthur Foundation’s recognition of these strategies only strengthens and increases that hope and takes a large step toward recognizing the real value of nature.

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