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Green and gullible: how tree investment schemes aren’t always what they seem

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If it’s too good to be true, it probably is. Many people seem to forget this maxim when investing. In recent years, there has been a spate of unregulated ‘green’ investment schemes. These ‘guarantee’ returns of 13% per annum or more, and claim to save the planet, but how true is this?

Most tree investment schemes involve investing in newly-planted trees in the tropics. In return for handing over a large sum of money, you get the right to sell the thinnings and mature timber, with maintenance costs being deducted from your investment.

But ask yourself a few questions: what happens if the company looking after your trees goes bust? How do you know if they are doing a good job? How will you actually sell the trees? Can you trust the management company? Most operators offer to show you around the plantation, but how many people actually travel to Sri Lanka or Panama, and in any case, would you know what to look for?

And what of the projected returns? Some of the schemes quote annualised returns based on flat (not compound) returns over a 20-year period. This makes a huge difference, as does the assumed rate of inflation on timber revenues. Furthermore, is the ‘guarantee’ worth anything and are you paying over the odds in the first place?

Nor are concerns limited to financial ones. Most tree plantations grow monotonous ‘green deserts’ of teak, bamboo, eucalyptus or acacia. These are poor in biodiversity, are vulnerable to disease and lacking in external environmental accreditation. Although they may provide jobs or even fund a school or health clinic, they perpetuate the economic dependence that keeps people poor. The vast majority of profits leave the country where the trees are grown and the land is owned by foreigners. This hardly seems like a sustainable model of forestry.

In the Netherlands, things got so bad that the government decided to act and regulated the whole sector. Yet investing in trees can be good for the planet, good for investors and good for poor people.

We set up the Cochabamba Project to fund a pioneering project in Bolivia that is nothing like the typical plantation forestry investment. Here’s why:

1. Timber profits are shared equally between the project (that supplies capital and knowhow) and the farmers (who own the land and look after the trees)
2. The project secures better prices for farmers and gives them a voice
3. Projected returns are based on conservative assumptions based on the consensus of expert opinion and the return to investors is modest
4. We are honest and clear about the risks
5. The Cochabamba Project is a co-operative of 500 members, not a get-rich-quick scheme
6. Many different native hardwood species are mixed with food crops, coffee and cocoa to create a biodiverse ecosystem
7. The project has been externally validated for its social and environmental credentials to the very highest standards

And finally, we are proud of the project and this September we are taking our second group of people to see the project in action.    Why not join us on the trip? Or else download our share prospectus for all the details.

John Fleetwood is a director of the Cochabamba Project. For more details on how to invest or visit the project, see www.cochabamba.coop or call David Vincent on 0114 236 8168. 

In accordance with the Financial Services and Markets Act 2000, Blue & Green Communications Limited does not provide regulated investment services of any kind, and is not authorised to do so. Nothing in this article and all parts herein constitute or should be deemed to constitute advice, recommendation, or invitation or inducement to buy, sell, subscribe for or underwrite any investment of any kind. Any specific investment-related queries or concerns should be directed to a fully qualified financial adviser.

Further reading:

An investment you can touch beats dealing with pure numbers

ArBolivia: a co-operative investment in the Amazon rainforest

The nature of investing

Financial value of carbon in world’s forests may be underestimated by £481bn

Global Forest Watch: Deforestation tool launched ‘to change how businesses manage forests’

John Fleetwood is the founder of Ethical Money and has 26 years’ experience in financial services, 13 of which was as an ethical specialist IFA. He founded the Ethical Investment Association, the industry body for ethical IFAs. John has provided institutional ethical investment research since 2002, and has developed ethical portfolio management services in conjunction with specialist asset managers. He has also helped to raise over £3.5m for the Cochabamba Project, a groundbreaking reforestation investment in Bolivia.

Economy

Will Self-Driving Cars Be Better for the Environment?

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self-driving cars for green environment
Shutterstock Licensed Photo - By Zapp2Photo | https://www.shutterstock.com/g/zapp2photo

Technologists, engineers, lawmakers, and the general public have been excitedly debating about the merits of self-driving cars for the past several years, as companies like Waymo and Uber race to get the first fully autonomous vehicles on the market. Largely, the concerns have been about safety and ethics; is a self-driving car really capable of eliminating the human errors responsible for the majority of vehicular accidents? And if so, who’s responsible for programming life-or-death decisions, and who’s held liable in the event of an accident?

But while these questions continue being debated, protecting people on an individual level, it’s worth posing a different question: how will self-driving cars impact the environment?

The Big Picture

The Department of Energy attempted to answer this question in clear terms, using scientific research and existing data sets to project the short-term and long-term environmental impact that self-driving vehicles could have. Its findings? The emergence of self-driving vehicles could essentially go either way; it could reduce energy consumption in transportation by as much as 90 percent, or increase it by more than 200 percent.

That’s a margin of error so wide it might as well be a total guess, but there are too many unknown variables to form a solid conclusion. There are many ways autonomous vehicles could influence our energy consumption and environmental impact, and they could go well or poorly, depending on how they’re adopted.

Driver Reduction?

One of the big selling points of autonomous vehicles is their capacity to reduce the total number of vehicles—and human drivers—on the road. If you’re able to carpool to work in a self-driving vehicle, or rely on autonomous public transportation, you’ll spend far less time, money, and energy on your own car. The convenience and efficiency of autonomous vehicles would therefore reduce the total miles driven, and significantly reduce carbon emissions.

There’s a flip side to this argument, however. If autonomous vehicles are far more convenient and less expensive than previous means of travel, it could be an incentive for people to travel more frequently, or drive to more destinations they’d otherwise avoid. In this case, the total miles driven could actually increase with the rise of self-driving cars.

As an added consideration, the increase or decrease in drivers on the road could result in more or fewer vehicle collisions, respectively—especially in the early days of autonomous vehicle adoption, when so many human drivers are still on the road. Car accident injury cases, therefore, would become far more complicated, and the roads could be temporarily less safe.

Deadheading

Deadheading is a term used in trucking and ridesharing to refer to miles driven with an empty load. Assume for a moment that there’s a fleet of self-driving vehicles available to pick people up and carry them to their destinations. It’s a convenient service, but by necessity, these vehicles will spend at least some of their time driving without passengers, whether it’s spent waiting to pick someone up or en route to their location. The increase in miles from deadheading could nullify the potential benefits of people driving fewer total miles, or add to the damage done by their increased mileage.

Make and Model of Car

Much will also depend on the types of cars equipped to be self-driving. For example, Waymo recently launched a wave of self-driving hybrid minivans, capable of getting far better mileage than a gas-only vehicle. If the majority of self-driving cars are electric or hybrids, the environmental impact will be much lower than if they’re converted from existing vehicles. Good emissions ratings are also important here.

On the other hand, the increased demand for autonomous vehicles could put more pressure on factory production, and make older cars obsolete. In that case, the gas mileage savings could be counteracted by the increased environmental impact of factory production.

The Bottom Line

Right now, there are too many unanswered questions to make a confident determination whether self-driving vehicles will help or harm the environment. Will we start driving more, or less? How will they handle dead time? What kind of models are going to be on the road?

Engineers and the general public are in complete control of how this develops in the near future. Hopefully, we’ll be able to see all the safety benefits of having autonomous vehicles on the road, but without any of the extra environmental impact to deal with.

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Environment

Road Trip! How to Choose the Greenest Vehicle for Your Growing Family

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Greenest Vehicle
Licensed Image by Shutterstock - By Mascha Tace -- https://www.shutterstock.com/g/maschatace

When you have a growing family, it often feels like you’re in this weird bubble that exists outside of mainstream society. Whereas everyone else seemingly has stability, your family dynamic is continuously in flux. Having said that, is it even possible to buy an eco-friendly vehicle that’s also practical?

What to Look for in a Green, Family-Friendly Vehicle?

As a single person or young couple without kids, it’s pretty easy to buy a green vehicle. Almost every leading car brand has eco-friendly options these days and you can pick from any number of options. The only problem is that most of these models don’t work if you have kids.

Whether it’s a Prius or Smart car, most green vehicles are impractical for large families. You need to look for options that are spacious, reliable, and comfortable – both for passengers and the driver.

5 Good Options

As you do your research and look for different opportunities, it’s good to have an open mind. Here are some of the greenest options for growing families:

1. 2014 Chrysler Town and Country

Vans are not only popular for the room and comfort they offer growing families, but they’re also becoming known for their fuel efficiency. For example, the 2014 Chrysler Town and Country – which was one of CarMax’s most popular minivans of 2017 – has Flex Fuel compatibility and front wheel drive. With standard features like these, you can’t do much better at this price point.

2. 2017 Chrysler Pacifica

If you’re looking for a newer van and are willing to spend a bit more, you can go with Chrysler’s other model, the Pacifica. One of the coolest features of the 2017 model is the hybrid drivetrain. It allows you to go up to 30 miles on electric, before the vehicle automatically switches over to the V6 gasoline engine. For short trips and errands, there’s nothing more eco-friendly in the minivan category.

3. 2018 Volkswagen Atlas

Who says you have to buy a minivan when you have a family? Sure, the sliding doors are nice, but there are plenty of other options that are both green and spacious. The new Volkswagen Atlas is a great choice. It’s one of the most fuel-efficient third-row vehicles on the market. The four-cylinder model gets an estimated 26 mpg highway.

4. 2015 Hyundai Sonata Hybrid

While a minivan or SUV is ideal – and necessary if you have more than two kids – you can get away with a roomy sedan when you still have a small family. And while there are plenty of eco-friendly options in this category, the 2015 Hyundai Sonata Hybrid is arguably the biggest bang for your buck. It gets 38 mpg on the highway and is incredibly affordable.

5. 2017 Land Rover Range Rover Sport Diesel

If money isn’t an object and you’re able to spend any amount to get a good vehicle that’s both comfortable and eco-friendly, the 2017 Land Rover Range Rover Sport Diesel is your car. Not only does it get 28 mpg highway, but it can also be equipped with a third row of seats and a diesel engine. And did we mention that this car looks sleek?

Putting it All Together

You have a variety of options. Whether you want something new or used, would prefer an SUV or minivan, or want something cheap or luxurious, there are plenty of choices on the market. The key is to do your research, remain patient, and take your time. Don’t get too married to a particular transaction, or you’ll lose your leverage.

You’ll know when the right deal comes along, and you can make a smart choice that’s functional, cost-effective, and eco-friendly.

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