Turning a new leaf: Forest carbon 2.0
Forest-related finance accounts for less than 3 percent of global climate mitigation funding. The lack of capital stems from the simple fact that our economy cherishes and protects what has a monetary value. Yet, many of the ecosystem services derived from intact forests have no market price. By putting a price on conversation, we have the chance to achieve 23 percent of the relief needed over the next decade to meet goals set in the Paris Agreement while providing a wealth of co-benefits to society at large. In truth, the first mechanisms to offer financial incentives for reforestation or conservation struggled with carbon accounting, measuring permanence, and accounting for leakage. Yet, forest-based offsets are far from an unfeasible concept.
To overcome these challenges, a new cohort of startups, including Pachama and NCX, is building the next generation of forest carbon marketplaces, which integrate artificial intelligence (AI) with remote-sensing technology and limited field measurements to pay landowners for protecting trees. In doing so, offset brokers can accurately measure the carbon stored in forest trees and monitor the integrity of carbon projects. To minimize leakage, NCX allows public and private landowners of all sizes to enroll and sell credits. This feature enables family landowners, who manage nearly 290 million acres of land, to participate in forest carbon markets that have historically required confusing contracts and steep auditing costs.
Beyond leakage, nature-based climate solutions (NCS) must also ensure that its stored carbon is not re-released into the atmosphere, thereby reversing its positive effects. The traditional thinking has been that the permanence of an offset should persist for at least 100 years. In the case of forest carbon projects, this is difficult to promise when decades of fire suppression, rising temperatures, and drought have increased the risks of pest and disease outbreaks, in addition to wildfire - transforming many forest growth campaigns from carbon sinks into carbon emitters. Unlike the industry standard, NCX markets an annual payment model. By paying landowners to defer harvests year-over-year, the company can increase the average age of forests and more efficiently store additional carbon at the gigaton scale.
The success of future forest carbon projects will also rely on cutting-edge wildfire spread prediction, modeling, and management solutions. Overstory, for example, attacks one of the main drivers of wildfire by providing utilities with visibility, risk analysis, and strategies for vegetation management. Once a wildfire occurs, companies like Pano and Technosylva use AI and GIS-enabled software to help fire professionals predict, detect, assess, and contain fires faster than ever before. And Fion’s prediction model technology allows enterprise customers to understand the behavior of wildfires when they start and stop them before they spread.
If beef is the leading driver of forest destruction, then alternative ways of producing protein and the crops grown to feed livestock will also be a key to our conservation toolkit. We believe that synthetic biology (SynBio) will underpin the next food and agriculture renaissance - enabling us to eat meat-like proxies without the environmental destruction that typically comes with it. This exciting suite of technologies allows companies like Vow and Hoxton Farms to harness the power of living cells to grow high-quality animal products in bioreactors similar to how we brew beer or kombucha. Moreover, C16 Biosciences, Kiverdi, and Farmsow are leveraging precision fermentation-based processes to produce climate-friendly oilseeds, which drive 18.4 percent of deforestation.
In reality, we will need all of these solutions to measure, monitor, manage, and protect our trees against climate change and deforestation. At ReGen Ventures, we are looking for these emerging technologies at the intersection of human and planetary health. If this sounds like something you are working on, get in touch!