An Introduction
to Forest Trends

Our Mission:• To maintain and restore forest ecosystems by promoting
incentives that diversify the trade in the forest sector fromdominance in wood products to a broader range of services
and products.
• Forest Trends seeks to accelerate the evolution of economic
systems in which:– Commerce sustains forest ecosystem services (I.e. watershed protection,biodiversity)– Companies and communities that manage forest ecosystems in asustainable fashion receive market recognition, and– Equitable share of the benefits generated from forest based commerce isreturned to local communities.

1Our Strategic Goals:• Accelerate the development of markets forforest ecosystem services;• Expand markets and investment thatencourage improved forest management• Promote markets and investments that
improve livelihoods of forest communities.

Our Niche• Between policy groups (e.g. WRI, IIED),
advocacy groups (e.g. WWF, Greenpeace)
and the market• Focused on:– forestry, the area outside of protected areas– markets and market based instruments (MBIs)– critical markets, not just forests– forest landscapes, not just HCV forests• One step closer to commerce2How we work:• Complementing/strengthening local change
agents in critical forest markets• Generating & disseminating criticalinformation to market players• Convening key players and fomenting
innovation• Facilitating deals that set valuable
precedents in key markets

Programs• Forest Services• Good Wood and Good Investment• Forests and Poverty

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Our Board of Directors
Matt Arnold
World Resources
InstituteDavid Cassells
The World Bank

Randy Hayes
Rainforest Action
NetworkKen Newcombe
The World Bank

Catherine Mater
Mater Engineering

Linda CoadyWeyerhaeuser

David Brand
Hancock NaturalResource Group

Miguel Milano
O Boticário Foundation

James E. Brumm
Mitsubishi International Corp.
Sergey Tsyplenkov
Greenpeace, Russia
Olof Johansson
Sveaskog

Salleh Mohd Nor
TropBio Research

Bruce CabarleWorld Wildlife Fund
Bettina von Hagen
Ecotrust

John Earhart
Global Environment
Fund

Michael Jenkins
Forest Trends

Wade Mosby
The Collins Companies

Forest Services

Carbon Sequestration

Biodiversity
Conservation

Micro
ClimateRegulation

Ecotourism
Recreation
Spiritual
ValuesWatershed
Protection
Land
Rehabilitation

Soil Fertility
Maintenance4Underpinning Society

After Costanza et al., 1997

Ecosystem ServiceEcosystem Functions

Climate regulation

Regulate global temperature,
precipitation, and other biologicallymediated climatic processes at global
and local levels

Disturbanceregulation

Provide storm protection, flood control,
drought recovery and other responses
to environmental variability mainly
controlled by vegetation structure

Water regulation

Regulate hydrological flows

Water supply

Store and retain water

Soil formation

Support soil formation processes

Erosion control

Retain soil within an ecosystem

Nutrient cycling

Store, internally cycle, process andacquire nutrients

Pollination

Support pollinators for reproductionof plant populations

Biological control

Enable trophictrophic-dynamic regulationof populations

Food production

Convert a portion of gross primary
production into food

Raw materials

Convert a portion of gross primary
production into raw materials

Genetic resources

Produce unique biological materials
and products

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The Global Perspective> 50% of the world’s species is concentrated in 2% of the world’s tropicalforests

Frontier forest 8,000 years ago

Frontier forest today

Why should we focus on markets forenvironmental and ecologicalvalues?
• Regulatory approaches have limits –high cost for
marginal increases in benefit• Human psychology responds better to rewards
than rejection• Markets tend to be efficient at achieving outcomes
if well-designed• Humanity is now so dominant on earth that it musttake direct responsibility –no more free ride on theenvironment as an externality6Success Stories — Carbon Sequestration

Bolivia– Buying back logging concessions in biologically rich areas– American Electric Power, Pacific Corp., BP America,
The Nature Conservancy, Noel Kempff National Park
– $9.5 million
Brazil– Restoring tropical forests in Mato Grosso State– Peugeot, Pro-Natura, Ministry of Agriculture,Community of Juruena
Australia, NSW– Afforestation on pasturelands– State forests of NSW - Pacific Power, Delta Power

Success Stories — Watershed Protection

Water quality– NYC -- Catskill watershed
Water supply– Quito, Ecuador and the cloud forests in the Antisana
Water regulation– Salinization control credits in New South Wales
Aquatic productivity– “Salmon-safe” certification in Oregon7Success Stories — Biodiversity

Brazil– Tradable development rights
U.S.A.
– Conservation easements
Global– Forest certification

THE WORK AHEAD
Developing commercial
markets for the environmental
services of forests8