Study: Forestry finance market could soar to $800bn as net zero goals multiply

But supply chain deforestation threatens to undermine vast market potential for nature-based climate solutions, PRI warns

Corporate demand for carbon removal and offsetting will establish forests as a major new asset class that could generate $800bn annually for investors by mid-century, according to the UN’s Principles for Responsible Investment (PRI).

The forest finance market, historically small and managed by the public sector, is set to balloon into a trillion-dollar market over the coming decades as a growing number of corporates make investments in afforestation and reforestation projects that help them meet their net zero goals, according to PRI research today.

The research – which forms part of a new guide to negative emissions and land-use released by the PRI today – predicts the value of assets in the nature-based offsets market could swell to “well over” $1.2tr by mid-century, a figure that even outstrips the current total market capitalisation of oil and gas majors.

Major forest-related climate commitments from some of the world’s largest companies – including Shell, BP, Total, Apple, Microsoft and Amazon – highlight how corporate net zero agendas are already turbocharging demand for carbon credits from nature-based climate solutions, it notes.

Yet even prior to the explosion of net zero commitments from companies over the past 18 months, the value of forestry and land-use CO2 credits had been growing. The value of such credits traded in the voluntary offset market tripled to $172m between 2017 and 2018, while the share of forestry and land-use related offsets grew from 52 to 64 per cent of the total voluntary market, it notes.

But while reforestation and afforestation have emerged the earliest feasible negative-emissions technology investment opportunity for companies looking to offset their carbon, the report also notes that technological solutions could also grow to be a hundred-billion-dollar market. Direct air carbon capture, use and storage (DACCS) and bioenergy with carbon capture and storage (BECCS) technologies could generate a further $625bn by 2050, it estimates.

Fiona Reynolds, chief executive of UN PRI, urged investors to take steps in the near-term to take advantage of investment opportunities in the bourgeoning forest market. “Policy and business momentum have now advanced to a critical mass for forests to begin emerging as a new asset class,” she said. “Investors can act now to unlock investment opportunities and to take an increasingly leading role in financing.”

It follows a number of high-profile investments in nature-based climate solutions from major corporates over the past year. Shell has invested in projects geared at planting five million trees in the Netherlands and regenerating a 800 hectare forest in Australia; BP is protecting a 40,000 hectare forest in Zambia; Apple is protecting a 11,000 hectare forest in Columbia; and Amazon plans to spend $10m on restoring 1.6 million hectares of US forest, according to the report.

However, the PRI warns that for investors to take advantage of the burgeoning market, they must take an active role in tackling deforestation, which not only harms the climate but constrains the total investible nature-based solutions market. Rates of deforestation have doubled during the pandemic, it notes, and as such investors must take steps to end investments in companies with deforestation in their supply chains.

“Afforestation activities are the most viable first move, but to ensure success actors must simultaneously focus on ending deforestation,” Reynolds said, adding that global forest laws need to be vigorously enforced and tightened.

The guide urges investors to take a stand in promoting sustainability standards for BECCS, warning that overreliance on the negative-emissions technology will push the world to its planetary boundaries on water and land availability. It also urges investors to promote a global standard for nature-based offset market.

“With more and more companies setting net zero targets, investors also need greater transparency about the negative emission technologies businesses will rely on to get there,” Reynolds added.

Elsewhere, the analysis highlights a number of emerging business models as holding the most promise for facilitating private investment in forest finance, ranging from green bonds, forest insurance provision, carbon off-taker guarantees, sustainable farming agreements and carbon farming agreements.

Distressed asset purchases – where investors buy and restore deforested or degraded public and private land to benefit from the carbon stock it produces – and a ‘stewardship model’ where an investor leases deforested or degraded land, are also included in the shortlist.

Allison Spector, director of sustainability at global investment manager Nuveen mused that private investors could “open the door” for major forest-related investments worldwide that could help companies meet their net zero targets and steer a Paris-aligned future.

“We believe there is a powerful role for forest-based natural climate solutions,” she said. “Yet the feasibility of implementing these strategies across the vast forestlands of the world is yet to be demonstrated and is predicated on an end to deforestation.”

Original Source: businessgreen.com

Money is a fundamental necessity; we need money for food, for clothing, for education, for healthcare and for sustaining our lifestyles. To make money, we need to put in the dedication and the hard work into our jobs.

We are all so actively engrossed in the process of making more money that we often put other important things like our passions, hobbies, families and friends, in the backseat. Aren’t all those things the very reason we were earning money for, in the first place? What if people could have a secondary, or passive source of income that didn’t require active involvement?

For most people, the concept of passive income has an element of mystery and intrigue to it. For others, it's the way of life. In simple words, passive income is the money earned on an investment — or work completed in the past — that requires little work or no active involvement to generate ongoing revenue.

Active income, on the other hand, is the hard-earned money that one earns in exchange for performing a service. This includes wages, tips, salaries, commissions, and income from freelance projects. 

There are many ways to earn a passive income. Display advertising, ebooks, e-courses, YouTube channels, etc. But they require skill, and not everyone is skilled for the same. One surest way of earning a passive income is from wealth, which can be taught using skills and systems. 

Having a source of passive income can completely turn things around for people. Think about it — if you could put in some upfront work into a project that would generate income for years to come, would you pass up on that opportunity? If you are inclined to put in the early efforts, passive income could prove to be significantly beneficial.

It could help sustain your lifestyle, and it could give you that extra money you need to buy something you have always wanted. Most importantly, it could give you a financial cushion to fall back on in times of need, such as the present economic downfall due to the COVID-19 pandemic.

You may consider investing your existing wealth in various assets like equity, debt, real estate, gold, and insurance in a way so that you make sure that there is a cash inflow of certain amounts at regular intervals in the form of passive income.

Investing your existing wealth into various assets according to your needs and risk-taking ability and making money out of it is easier than trying to learn a new skill altogether. 

However, generating a passive income from existing wealth cannot be achieved through a shortcut. It still requires involvement and hard work in the initial stages, but if you are willing to make the effort, you could end up making money while you sleep. And that’s the goal of passive income.

passive incomeWays to earn passivelyInterest earned from investments/lending

Earning interest on investments is one of the most common yet effective forms of earning passively. Most people open Fixed Deposits and start contributing to a retirement fund early on in their careers. The interest earned on investments can add up to a significant amount in the long run.

Contribution in PPF, EPF, NPS, etc. all are classified as long term investing with a goal of regular savings and future income from interest earned. Even lending money just like banks to other institutions in forms of debentures fetches higher rates of return versus the banks. 

Also Read14 passive income ideas for earning money as you sleepRental income

While most people invest in property for the outcome of appreciation of property, it is an outcome they can't control. They often forget that making money from rental income is a great way to create monthly passive income.

Although investing in property presents its own challenges, like finding a tenant who can pay the required rent and maintaining the property, it can still be a strong source of passive income and worth the initial effort. One could pull in some significant money in the form of rent money. Investing in stock markets

Dividend stocks are one of the easiest ways for people to create a passive income stream. As public companies generate profits, investors earn a portion of those profits in the form of dividends. Investors can then decide whether to keep the cash or reinvest the money in additional shares.

This style of investments gives investors long term growth along with annual dividends from the companies they have already invested in. Many people nearing retirement like to buy PSU companies that are known for paying high dividends but are weaker in comparative growth. 

Also ReadThe science of stock trading during volatile times

Precious metals

Over the last five years, investing in gold has also generated passive income for a lot of people. Investing in gold bonds is a new style of investing, which can fetch from 2.5-2.75 percent yearly interest income, which is at par with the bank interest on many national banks on date.

This is a unique way to not only enjoy the benefits of investing in gold digitally but also getting interest to do so.

Insurances

Many people consider using the traditional style of investing in insurances as a part of their tax deduction and buy insurance plans that start paying yearly income back to them after a certain time. The most interesting thing about this is that the investment is tax-free, and so is the income received from it. Hence, this arrangement is very lucrative for the individual, especially in the high tax bracket.

Passive versus active incomeUnlike passive income which takes years to build, an active income ensures that you have a consistent income stream and allows you to make money in a short and defined period of time i.e. your salary. Often, an active source of income is necessary in order to lay the foundation for a passive source of income.

For instance, to earn passively from investments, you need to first make enough money to invest. However, a lot of people still look at active income as the only option and are oblivious to the notion of earning passively. In this day and age, people should be looking at both revenue streams in combination.

There comes a point in life when one starts feeling the financial pressure of balancing savings and expenditure. If implemented correctly, passive income can certainly provide that extra stability that one may be looking to achieve.

(Edited by Saheli Sen Gupta)

(Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the views of YourStory.)

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Original Source: yourstory.com

Millions may lose their health insurance coverage, as well as premium subsidies, if the Supreme Court overturns the Affordable Care Act. Meanwhile, the wealthiest households could reap a windfall of tax savings.

Original Source: cnbc.com

too low mortgage ratesMorsa Images/Getty Images

 

Mortgage rates are at historic lows, and while there are no hidden fees that accompany a low APR, there are a couple trade-offs to keep in mind.
You may find a lower rate with an adjustable-rate mortgage (ARM) than with a fixed-rate mortgage, but the ARM rate could increase when the introductory rate period ends.
If your down payment is under 20% of the home value, you’ll have to pay private mortgage insurance (PMI), which could add hundreds or thousands of dollars to your annual payments.
You probably don’t need to rush to buy a home with a low rate, because mortgage APRs will likely stay low in 2021.
Policygenius can help you compare homeowner’s insurance policies to find the right coverage for you, at the right price »

Mortgage rates are at historic lows, so it could be a good time to buy a home. But you may be wondering whether there is a downside to low rates.

In short — nope, there’s no catch. A low APR can save you thousands over the life of your loan.See the rest of the story at Business Insider

See Also:

5 reasons term life is almost always a better choice than permanent life insurance for US householdsHow to fill out a money order and send a payment securelyInstead of saving a total sum for retirement, I started thinking about how much I want to ‘earn’ monthly and it made me reassess the way I invest

Original Source: feedproxy.google.com

Could a UK heatwave exacerbate the coronavirus crisis?

‘A heatwave coupled with a second wave of Covid-19 infections would put enormous strain on our already overburdened doctors, nurses and other key workers’

A great many frailties, structural problems, and inequalities sitting right at the heart of the economy have been exposed by the coronavirus crisis.

The pandemic has, for example, shone a light on the importance of undervalued work such as waste and recycling collections to the day-to-day functioning of society. Some supply chains have been stretched to breaking point, having been severely hit in some quarters by labour and ingredient shortages. The dramatic decline in demand for oil products as lockdown measures kicked in around the world has brutally exposed the dangers of making fossil fuels the global economy’s most influential commodity. And, most impactful of all, the uneven death rates for different communities and the wide range of lockdown experiences have highlighted deeply entrenched social and racial inequalities.

Now, as spring moves into summer in the northern hemisphere, there look to be further challenges ahead which threaten to expose yet more societal fault lines and vulnerabilities as climate impacts escalate.

On a global level 2020 is expected to be the hottest year since records began, and as summer gets underway a number of heatwaves are already being recorded around the world, including in India, Siberia, and the US. Meanwhile, hurricane season is getting underway. Poorer nations with less advanced infrastructure and more vulnerable food systems as ever face the worst climate risks, just as they are at risk from the rapid spread of pandemics.

And richer nations are far from immune from these impacts. The UK has, after all, just experienced its driest May since records began, the Met Office confirmed on Friday, and the National Farmers’ Union has already expressed concern at “worrying dry weather challenges” harming crops. All this comes just weeks after record rainfall and devastating floods in February. The contrast and volatility in weather patterns, which bears many of the hallmarks of climate change, has astounded scientists.

Lest we forget, last summer’s heatwaves across Europe – made five times more likely to occur as a result of climate change – were estimated to have caused an additional 900 deaths in the UK, according to by Public Health England (PHE). And this year, faced with millions of people either furloughed or working from home, and monumental efforts being made to protect frontline NHS services from being overwhelmed by the influx of Covid-19 patients, experts are today warning that a UK heatwave in 2020 could be even more dangerous. It remains a tragic fact that hundreds are still dying every day in the UK from the pandemic, and as summer gets underway, hundreds more could lose their lives if temperatures rise too high for sustained periods this summer.

“After the driest May on record, older people and other vulnerable populations may be at risk from the often deadly heat waves we increasingly see each summer, often exacerbated by climate change,” said Dr Nick Watts, executive director of the Lancet Countdown, which monitors the links between climate change and public health. He is among a number of experts from the likes of Christian Aid, UNICEF, and others warning today that volatile summer weather impacts exacerbated by climate change could undermine attempts to keep the pandemic under control.

A sustained period of high temperatures in the UK could put the NHS under serious pressure, warned Watts, who called for a greater focus on building climate resilience into UK infrastructure and services going forward. “A heatwave coupled with a second wave of Covid-19 infections would put enormous strain on our already overburdened doctors, nurses and other key workers,” he said. “It is clear that rapid emissions reductions are required, alongside further investment in health systems and a range of adaptation measures that will protect against future extremes of weather as well as future pandemics.” 

It has long been known that, as weather increasingly veers between extremes in the UK – characterised by higher chances of cold snaps and flooding in the winter, and extreme heat in the summer – UK buildings and infrastructure are woefully ill-prepared. The UK’s Green Building Council has called for all buildings and infrastructure to be made climate resilient by 2030. Recent analysis by the Energy and Climate Intelligence Unit (ECIU) found that, if lockdown measures extended into the winter months in the UK, it could exacerbate already rife fuel poverty. Families living in the draughtiest homes, it estimated, could end up having to shell out roughly £50 more on their energy bills each month just to keep warm at home during the day.

Meanwhile, the government has commissioned an independent, six month review of flood insurance provision in the UK, following devastating floods across many parts of the North of England earlier this year. Conservative think tank Bright Blue has estimated even 70,000 newly-built homes in the UK are at risk of being denied flood insurance in future, having been built in floor-prone areas of England.

And this coming summer, on top of the aforementioned public health risks highlighted by Watts, searing temperatures again risk public transport being brought to a standstill as well as overheated homes, schools, workplaces, and hospitals which remain ill-equipped for keeping occupants cool. Since 2015 the Committee on Climate Change (CCC) has recommended new building recommendations are adopted in order to help guard against overheating, warning that without action the number of people dying in the UK as a result of heat could reach 7,000 a year by 2040.  

All totted up, it is perhaps understandable that chair of the CCC, Lord Deben, last year bemoaned the UK’s preparations for such worsening climate impacts as akin to the notoriously ramshackle organisation of characters in the BBC sitcom Dad’s Army.

For its part, PHE yesterday launched its ‘Heatwave and Summer preparedness programme for England’ in a bid to raise public and professional awareness of the health impacts of hot weather. It warns that many of those who are at risk of harm from heat are also at greater risk of severe illness due to Covid-19, and urges the public and employers to take early precautions against these risks.

“The harm to health associated with high temperatures is not inevitable, there are things we can all do to minimise the impact of hot weather on human health,” PHE said in a statement. “Hot weather can happen with little warning and illness and deaths occur within the first couple of days. By the time hot weather arrives, the window of opportunity for effective action is often very short indeed. This means that advanced and long-term planning and preparedness are essential.”

Nevertheless, while it is PHE’s job to manage the health impacts in the immediate term, preventative action is clearly also needed at an infrastructure level to tackle long term risks, and that must take the form of renovating and upgrading homes and offices, and building more resilience into infrastructure and supply chains. That is one of many reasons why the National Infrastructure Commission last week unleashed a wide-ranging report calling on the UK to bolster its resilience efforts in the face of mounting risks from climate impacts and unanticipated shocks such as pandemics.

But if the coronavirus crisis has exposed vulnerabilities at the heart of the economy, it has also demonstrated the remarkable versatility of businesses, policymakers, and citizens to rapidly adapt, and in some cases potentially spurring longer term positive changes. As Britons eschew public transport in large numbers over safety concerns, roads have been widened and closed off to cars in cities such as London, where air pollution has dropped and bike use has shot up. Many businesses have been forced to coordinate their services and workforces entirely remotely, with staff working from home more or less full time and managing their tasks via video meetings and email.

There are positive signs that the current crisis could accelerate efforts to bolster adaptation and resilience, too, with these two key issues at the heart of a letter from more than 200 major businesses yesterday calling on the UK government for a green recovery. The government appears to have broadly welcomed the calls for a green recovery and is reportedly working on plans for a wide-ranging stimulus package that is expected to focus on clean infrastructure. Moreover, Ministers recently re-confirmed a Conservative Party manifesto promise to allocate £9bn of support over the next few years to boosting energy efficiency and shifting to low carbon heating systems. Hopes will now be high that July’s economic recovery package prioritises support for building renovation and infrastructure resilience against, extreme heat, cold, and flooding.

But time is ticking away, and this summer may bring with it weather that highlight just how urgently the UK – and indeed most of the world – needs to prepare for the escalating climate crisis, further exacerbating the threat posed by the current coronavirus crisis in the process. Boris Johnson may have pledged to “build back better”, but the UK also needs to build back stronger.

Original Source: businessgreen.com

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