Rainforest in Congo: Species protection as an investment

Only Brazil lost more rainforest than the Democratic Republic of the Congo in the past year. Large oil and gas projects threaten biodiversity. An investment fund is now countering this and hoping for imitators.

It sounds like a fairy tale – and maybe it will stay that way: last year the government of the Democratic Government of the Congo released 27 blocks for the exploration of oil deposits and three for the search for natural gas for auction. In the capital, Kinshasa, huge profits are expected from the production, while environmentalists warn of the devastating consequences for flora, fauna and thus also for the global climate.

Matthias Pitkowitz, an investment banker with Austrian roots, wants to stop the corporations and harness “Wall Street to fight for nature”. To be more precise: for the protection of species. According to Pitkowitz, the end result should be “the world’s largest nature conservation project” with “70 million hectares of forest – that’s roughly the size of France,” he explains.

Pioneer for sustainable financial instruments

That sounds like green gigantomania that allows for doubts. However: Pitkowitz has a résumé that makes you think he knows what he’s doing: entrepreneur, investment banker, responsible for billion-dollar transactions for well-known names in the capital world – and “pioneer for sustainable financial instruments in the USA”. The founding of his fund EQX Biome in New York is the logical next step, so to speak.

His plan: the government of the Democratic Republic of the Congo should not sell drilling rights to oil multinationals, but leave the exploration regions to his fund as protected areas. The fund then uses $400 million directly to secure the areas. Investments in rangers, for example, are necessary, and jobs will be created quickly.

So-called biodiversity credits, i.e. certificates for the protection of species, would be created and traded for the protected areas – which, however, do not yet exist in a generally recognized form. Until then, trade would be in carbon credits, i.e. with the now well-known CO2 emission certificates.

A deal more lucrative than Big Oil?

Pitkowitz assumes that $6 billion could be generated within 20 years. Investors could derive their returns from this, and the state would collect taxes. However, the bulk of the sum would flow into the expansion of the protected areas, according to Pitkowitz.

A deal that could bring the state more than Big Oil? “We have a chance at the government auction because we can show that we can be more profitable with conservation than with oil drilling,” says Pitkowitz. Oil drilling is complex, more than 50 years long projects.

It usually takes ten years for the first oil to flow – until then there is no tax revenue. Until then, however, aisles would be cut in the forests for roads, railways and pipelines, says the manager. “You know that as soon as there is a road, there will also be deforestation around it.”

Environmentalists partly skeptical

Greenpeace knows that too. The environmental organization should actually welcome the plans. But she sees in the stock market – as before – the cause of the destruction of nature, which is now disguised as a savior. “Behind all these mechanisms are people in the USA, Europe or Asia who see the Congo forest as a way of making a lot of money,” believes Ranece Ndjeudja Petkeu, who is in charge of the region for Greenpeace.

“The communities living there will not benefit from it.” And: Rigorous protection often cut them off from their livelihoods. Pitkowitz knows the criticism and has prepared himself: Representatives of the communities from the rainforest sit on the advisory board of the fund, which has the protection of biodiversity as the main goal in its statutes, as well as experts on biodiversity.

Economic model for conservation of nature

One of them is Frauke Fischer, who teaches species protection and ecosystems as a lecturer at the University of Würzburg and is on the scientific advisory board of WWF Germany. “Nothing happens against the will and resistance of the local population and indigenous groups. Absolutely not,” she emphasizes.

She considers the help of the financial sector in nature conservation to be indispensable – donations or development aid cannot raise the funds that the UN says are necessary. “We have a $700 billion a year gap in protecting biodiversity,” says Fischer. “If we don’t succeed in designing an economic model for the preservation of nature very quickly, then the economic model of the destruction of nature, which has unfortunately worked very well for 200 years, will continue to be pushed forward.”

Endangered flora and fauna

In practice, this means for the affected regions: dangers for the Virunga National Park, a UNESCO World Heritage Site, where the endangered mountain gorillas live. A danger also for the wetlands of the Congo, the largest in the world, which bind incredible amounts of CO2 – three times the amount of global CO2 production. It could be released in whole or in part through the drilling.

And the biodiversity? Africa alone loses more than 6,400 species of animals and more than 3,100 species of plants each year, many of them native to the rainforest, conservationists say.

No wonder the financial industry is also thinking about saving the planet it lives on. The economic consultants from Deloitte estimate the market for biodiversity certificates at more than 160 billion US dollars by 2030 – although there is still no really standardized calculation method for the individual papers.

Government does not want to be stopped from drilling

Arguments with which the government of the DR Congo is now abandoning its plans? At the start of the oil auction last July, DR Congo’s responsible minister, Didier Budimbu, told the Financial Times that drilling in Virunga was abandoned almost ten years ago after Hollywood actors Ben Affleck and Leonardo DiCaprio put pressure on the country with a documentary had.

This time you will not be deterred from drilling. The conclusion of the bidding round will show whether Pitkowitz’ profit calculation can change anything about this, a year later. This ends – initially for the particularly important climate-related wetlands – in July and August.