By Danielle Beurteaux
Can a price be put on the environment? The
answer should be yes, says Colin le Duc.
Le Duc, 40, is a partner at the London office of Generation
Investment Management, the $7 billion global equity fund that
focuses on environmental sustainability and was co-founded by
Al Gore in 2004. Le Duc is also a board member of Forest
Trends, a Washington, D.C., group that establishes ecosystem
offset markets, provides environmental market news and
analysis, and promotes conservation through establishing
payment systems for natural resources.
Le Duc’s first exposure to Forest Trends was
through friends who worked with the group; he was attracted to
its use of financial instruments to link markets, investors and
communities, and to protect the environment. "I was very
intrigued by their fundamental proposition around payment for
ecosystem services," he says.
Le Duc joined the board in 2007, primarily to help Forest
Trends broaden its connections to the investment community.
"It’s an organization that’s
dramatically underappreciated in the sense that they pioneered
a notion and created real markets," he says. Contrary to the
goal of preserving pristine expanses of unoccupied wilderness,
the new environmentalism calls for a sustainable balance for
both people and the environment. "The new way of thinking is to
say we need to find a way for humans to live in harmony with
the environment," le Duc says.
Forest Trends has, for example, helped indigenous peoples
who live in valuable forest regions such as the Amazon get
fairly compensated through establishing a balance of forest
management and wood pricing. "I just think that
it’s inevitable that we have to move to a
situation where people are paid more for maintaining forests
than for cutting them down," le Duc says.
The organization has also branched out to include other
ecological areas like water quality and marine life. One
program is the Chesapeake Fund—run in concert with the
Chesapeake Bay Foundation and the World Resources
Institute—which aims to reduce nitrogen runoff from
local agriculture into the Chesapeake Bay in Maryland and
Virginia. A surfeit of nitrogen in water creates so-called dead
zones, where there’s not enough oxygen for marine
life to survive.
As part of that program, a nitrogen trading market is being
readied, where farmers can buy and sell nitrogen credits to
help protect water quality.
Whether it’s clean air, clean water or fossil
fuels, environmental resources are undervalued, le Duc says,
and that’s a serious problem.
"There’s a massive market failure around the true
value of the environment in that it’s not fully
reflected in our economic system today," he says.
"That’s what Forest Trends is trying to change,
and that’s what environmental markets generally
are trying to do."
Forest Trends co-founder Michael Jenkins says le
Duc’s combination of investment experience and
environmental savvy is invaluable. "There are very few people
in the world who have that mix of experience and who are
sitting on those intersections," says Jenkins.
"He’s really unusual."
For his part, le Duc is impressed with Forest
Trends’ level of sophistication in solving
environmental challenges. "I just think they’re
the best in the world. They’re doing such
intriguing work, and they’re totally unique."