So much attention to all things green right now! Iâ€™ve just arrived in Pasadena where FORTUNEâ€™s Brainstorm: Green conference is about to begin. On my flight, I read the â€œgreenâ€ cover stories in Vanity Fair, Time and The New York Times magazine. Half the ads are about business going green. Is it a bubble? Well, yes, in the sense that the buzz around the Internet circa 1999 was a bubble. Is the green business movement going to deflate? No, itâ€™s only going to grow, just as the Internet has grown in importance despite peaks and dips in stock prices and media attention.
In fact, I think most of the business innovation around the issues of climate change and sustainability is still ahead of us. One exampleâ€”an idea Iâ€™ve written about before called â€œecosystem services,â€ which is about finding ways to protect nature by paying for the services that it provides. The latest example is a deal, announced last week, in which Merrill Lynch will pay local people in Aceh, Indonesia, to preserve a valuable forest. Itâ€™s the topic of my Sustainability column on fortune.com and cnnmoney.com.
Hereâ€™s how it begins:
The business of “carbon farming” is growing fast — and Merrill Lynch is the latest big company to bet that it will become profitable.
What’s carbon farming, you ask? It’s a business designed to recognize the value created when trees store carbon dioxide and prevent global warming. So people who plant new trees or prevent existing trees from destruction can get paid for doing so.
That doesn’t mean that the tree in your backyard or mine will help pay college tuition or fund a 401(k). For now, the payments are going to villagers in the developing world who agree to protect endangered forests. Starbucks (SBUX, Fortune 500), Marriott (MAR, Fortune 500) and Rio Tinto (RTP), among others, have all agreed to finance projects designed to deter deforestation.
This week, Merrill Lynch (MER, Fortune 500) announced that it will invest $9 million to help save a tropical forest in Aceh, Indonesia. It’s the first time a Wall Street firm has invested in carbon farming, and let’s be clear: this isn’t philanthropy of public relations; it’s strictly business.
You can read the rest here.