Word: iwokrama
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Dates: during 2008-2008
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...Mitchell and some of his friends in the London financial community are trying to fix what he calls a "market failure." On March 28 the financial group Canopy Capital announced that it would pay the Iwokrama forest reserve in the tiny South American country of Guyana in return for ownership of the forest's ecosystem services and a claim on any profits that might one day be made on them. Canopy Capital wouldn't say how big the deal was, but the firm's managing director Hylton Philipson said it would cover a significant chunk of the reserve...
...bold bet. Right now there is no price set on those rain-forest services, because no market exists to price them. Canopy Capital isn't buying land, and it is essentially paying the Iwokrama reserve for a good that it can't really trade. That sounds an awful lot like philanthropy, but Mitchell and Philipson insist this is capitalism. For now, Canopy will pay simply to protect Iwokrama's ecosystem services, but in the future it's wagering that the world will get desperate enough to limit climate change - and deforestation - that it will pay Canopy for its stake...
...range of philanthropy, but not if we choose to recognize and capitalize on the market value of forests. Canopy Capital's deal is a great first step in that direction. "This demonstrates that you can use a forest, but not lose it," says Edward Glover, chair of the Iwokrama reserve. Anything that keeps us from losing forests is worth trying...
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