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" The development of national and regional compliance schemes will see growing demand for forest carbon assets "for forests now, a means of spending it wisely, and promoting forests as a vital natural capital. This mes-sage and the following ideas the Forest Carbon Group is trying to convey to influential players in politics, business and civil society.Beyond the UN processWith a global compliance market that accepts REDD credits looking unlikely before 2020, parallel pro-cesses with multiple or bilateral deals should be forged. The development of national and regional compliance schemes will see growing demand for for-est carbon assets, particularly in Australia, California and Quebec.  All eyes will be on the frontrunners such as California and their counterparts in tropical coun-tries, states or provinces such as Brazil and Mexico, which will increasingly define REDD outside the UN process. In Europe, where the EU emissions trading scheme rules out forest carbon credits so far, national governments could move forward unilaterally and cre-ate REDD credits purchase programmes.Beyond treesTo increase the chances of forest protection, we will need to push towards more landscape-level approach-es to forest and land-use based carbon projects. While development banks, donor countries and policy advo-cates have lamented "silo-isation" in the carbon mar-ket universe for years, we should develop practical methodologies for integrating climate friendly agricul-ture, agroforestry, and forestry in carbon projects.Beyond carbonThe beauty of REDD is its multiple benefits. We ob-serve that a growing number of companies that want to invest in carbon projects and purchase carbon credits prefer the bigger story and benefits these pro-jects offer rather than "the carbon neutrality" and emissions reduction aspects. Conserving biodiversity, maintaining ecosystem services, promoting local de-velopment, and alleviating poverty are the issues businesses want to be associated with. Certainly, car-bon is and remains the "currency" to pay for this. Moreover, carbon finance through REDD can poten-tially trigger other income streams for local communi-ties. For example, restoring mangroves helps fish stocks to recover, cash crops like coffee and cocoa can grow under a forest canopy.Building strategic alliances with industry leadersAs stated above, funding for forest protection needs the private sector's engagement. So we looked at the business landscape in Germany and found that the energy industry, besides its huge impact on climate change, offered a significant potential and climate mitigation could become a business model for utility companies. Why? Liberalisation, re-structuring, the shift to renewables, regionalisation, and the phasing-out of nuclear energy are currently re-shaping the German energy market. That means traditional busi-ness models have to be reconsidered. In HSE - one of the leading regional utility companies in Germany that has also established a nationwide operating green energy supplier, we found a forward thinking partner. It developed a business model that improves differentiation, customer loyalty, value crea-tion and, at the same time, responded to climate change. Sustainability has become a driving factor behind broadening the value chain - from energy ef-ficiency consultancy, green electricity and gas prod-ucts to carbon offsetting of products and the com-pany's own emissions through forest carbon projects. Now, after pioneering the market, around half of Ger-man utility companies have followed HSE's example and also offer carbon neutral gas.But all these steps and initiatives are not enough. REDD and the carbon market are not, as often seen, the magic bullet to stop deforestation. They are more of an important catalyst among several to drive sus-tainable land use and agriculture. It is necessary to encourage - through multiple economical incentives - markets for sustainable products like soy, timber, palmoil, and beef in order to transform the economics behind. For this to happen, all of us will have to change our consumer behaviour. nAbout the AuthorsAlexander Zang is Executive Board Member of the Forest Carbon Group AG. Mr Zang is a shareholder of BCC, Business Communications Consulting GmbH, a consultancy firm based in Frankfurt am Main, Ger-many, which specialises in strategic communica-tions. As a director of the Forest Carbon Group AG, he is responsible for product development and sales. In the past few years he has focused on sustainability strategies in the energy and cleantech sectors, car-bon footprinting and related issues.Michael Sahm is Director of Public Relations at the Carbon Forest Group. Mr Sahm is a journalist, author and communications consultant with more than a decade of experience in radio, print media and public relations. Throughout his professional work he has been covering issues of environmental protection and climate change as well as energy and development. He has always been interested in making complex issues, such as climate protection, comprehensible and accessible to a broader public. FORESTS 081

Modernising MultilateralismRobert B. Zoellick, President, The World Bank Group The Bank is working with all its clients on fundamental long-term investments to lay the foundations for recovery: especially infrastructure; safety net programmes to protect the poor; and financing for the private sector.I have explained to my colleagues how the Bank's drive to be faster, more flexible, and innovative for our clients can draw from the military's insight into tightening the "OODA loop" - the need to rapidly "Observe, Orient, Decide, and Act".The Bank Group emphasises free enterprise and the development of the private sector. This is an important evolution from the Bank's founding era.The financial crisis has not shaken developing countries' embrace of markets and the private sector. The vast majority of countries might not use Churchill's language, but they would generally agree with him that: "The inherent vice of capitalism is the unequal sharing of blessings; the inherent virtue of socialism is the equal sharing of miseries." For developing countries, their compass points toward a relentless pragmatism: They are more interested in what works than in the debates that seem to paralyse many developed countries.The Bank's private sector development begins with public policies to strengthen the environment for investment, whether domestic or foreign, including through an educated, skilled, and healthy workforce. The Bank's "Doing Business" report helps countries assess how they compare with others in empowering entrepreneurs, especially smaller businesses.IFC, the Bank Group's private sector arm, invests in companies and financial enterprises that can support developing country businesses and 082 FINANCE AND INVESTMENT