As efforts grow to better align our economy with our ecology (due to very real biophysical limits of natural resource availability), businesses and landowners are exploring how to generate income via the valuable ecosystem services produced by their property.
The Guardian reports on how forest companies are making the transition from solely extractive-based revenues to diversified revenue streams that capitalize on conservation value:
Climate change, population growth, and soaring demand for food, energy, water and other resources are changing the way the world sees and values forests. A vision is emerging of a new kind of company – the forest services company.
Our vision is being propelled by new markets that are emerging for forest services such as carbon storage, wildlife preservation, recreational facilities and watershed protection. This trend is creating huge business opportunities for forest companies with the foresight to reinvent themselves and look beyond the traditional equation of forests equal timber.
Forest companies of the future will expand their business model beyond delivering products to providing an array of crucial services to communities. Timber revenue will still be important, but successful companies will have supplemented their income from the fast-growing new markets that emerge from the increasing scarcity of ecosystem services.
Sounds rosy. But is this just more unrealized happy talk about the future potential of ecosystem services markets? I was pleased to find some real-world examples of these types of changes actually happening now -- both at home and abroad:
Sveaskog, Sweden's largest forest company, is doing exactly that. Approximately 15% of annual net sales comes from biomass for energy and non-timber services such as windfarm leases and hunting and fishing licences. In addition, Sveaskog is managing one-fifth of its land for conservation and promotion of biodiversity. The company is also experimenting with ways to maximise carbon uptake through different forest management measures and plans to sell the additional uptake to carbon markets. In 20 years, Sveaskog expects its current sales share of 15% from biomass and different kinds of non-timber services to have doubled.
Other major companies are similarly shifting focus to incorporate services. Plum Creek, the largest US private landowner, has about a third of the company's 7m acres of timber lands under revenue-generating conservation and wildlife protection agreements. Mondi, a leading international paper and packaging group, recently identified opportunities to tap into growing markets for biomass and ecotourism through a review of ecosystem services at three of its South African plantations.
The shifting nature of forest companies is a win-win opportunity for governments as well, creating new jobs in struggling rural areas and improving the quality of life for urbanites.
One question I'd love to explore: are these ecosystem services-oriented revenue streams being designed in conjunction with neighboring landowners as part of regional-scale conservation planning efforts?