18th Jun 2024 Gemini 1.5 Pro
Diego Saez Gil, CEO and co-founder of Pachama, discusses his company's mission to restore nature through technological advancements in the realm of carbon offsetting. Recognizing the critical role of nature in mitigating climate change, Pachama leverages technologies such as AI, satellite imagery, and cloud computing to modernize the carbon credit system. By connecting corporations seeking to achieve net-zero targets with projects focused on reforestation and forest conservation, Pachama strives to channel funding effectively and ensure transparency and accountability within the carbon market.
Pachama's journey began in 2018, driven by Saez Gil's realization of the potential of technology to address the climate crisis. Recognizing the limitations of traditional, paper-based carbon markets, he envisioned a future where technology could streamline and enhance the integrity of these systems. With backing from prominent venture capital firms like Lower Carbon and Breakthrough Energy Ventures, Pachama has emerged as a leading player in the rapidly growing climate tech sector. The company's impact is evident in its support for projects across 15 countries, protecting over 2 million hectares of endangered rainforests through its verified marketplace. Additionally, Pachama Originals, a newer initiative, focuses on early-stage funding for reforestation projects, demonstrating the company's commitment to proactive environmental stewardship.
"Our intention is to help corporations and in the future governments to channel funding to projects that are doing reforestation and conservation around the world in a highly scalable way with transparency, with accountability, making sure that the money goes to the right hands and produce the right impact."
Saez Gil acknowledges the valid criticisms surrounding the first generation of carbon credits, particularly those related to exaggerated claims and the exploitation of lax methodologies. He emphasizes the importance of dynamic baselines, leveraging high-definition satellite data and algorithms to accurately predict and monitor deforestation rates. By utilizing such technologies, Pachama aims to establish a more robust and trustworthy system. Saez Gil argues that while certain projects may have exploited loopholes, it's crucial to avoid generalizations and recognize the genuine efforts of those committed to responsible carbon offsetting.
He advocates for a nuanced approach to journalism on this topic, emphasizing the importance of highlighting both the challenges and successes within the carbon market. Saez Gil stresses that acknowledging and addressing past shortcomings is vital for progress, emphasizing the need to focus on what can be achieved in the next two decades. The goal is to ensure that future mechanisms drive meaningful climate impact while benefiting local communities and ecosystems.
"It's important to acknowledge the problems, highlight the good work of the projects who did the right thing and keep supporting them. And ensure that the next generation of projects... And really what matters is what we're going to do in the next two decades."
Saez Gil elaborates on dynamic baselines as a crucial improvement to address issues with carbon credit methodologies. He explains how access to historical satellite data allows for more accurate estimations of deforestation rates and the drivers behind them. This technology empowers project developers to make more realistic predictions about future deforestation and adjust baselines accordingly, leading to more accurate carbon credit calculations. Regarding concerns about reversals, such as forests lost due to wildfires, Saez Gil acknowledges the increased risks posed by climate change.
He emphasizes the need to incorporate these risks into carbon accounting models. While acknowledging that past projects may not have adequately accounted for risks like wildfires, Saez Gil points to the development of buffer pools and insurance mechanisms as ways to mitigate such losses in the future. He also highlights the importance of preventative measures, citing the example of a project in Brazil that created a citizen network for early fire detection and response.
"Let's learn from that experience and let's incorporate this new thinking into the next generation of carbon credits. And that next generation wouldn't suggest that those credits somehow get reversed as much as it suggests there's more of a discounting mechanism to the forecasts?"
While acknowledging the current voluntary nature of carbon markets, Saez Gil anticipates a future where carbon offsetting will become mandatory. He cites examples of jurisdictions like California, Canada, and the European Union that are already implementing or experimenting with carbon pricing and emissions compensation schemes. Additionally, he highlights the growing pressure from investors, employees, and consumers who are increasingly concerned about environmental, social, and governance (ESG) factors and the climate impact of businesses.
Saez Gil believes that companies proactively engaging in carbon offsetting will be better positioned to navigate future regulations. He suggests that early adopters will benefit from establishing themselves within the market and contributing to the development of robust and effective carbon reduction strategies.
"And I definitely think that we should expect governments to at some point either put a price on carbon or enforce some... compensation of your carbon emissions."
Saez Gil acknowledges the ethical concerns surrounding the commodification of nature inherent in carbon markets. While envisioning a future where nature is valued for its inherent worth, he recognizes the need for pragmatic solutions in the present. He believes that leveraging existing financial systems and incentives is crucial to driving immediate action against deforestation and environmental degradation.
Saez Gil advocates for a conscious capitalism approach, where organizations prioritize stakeholder value, encompassing local communities, wildlife, and the planet. He sees companies like Patagonia and Salesforce as examples of this shift, demonstrating that profitability and environmental responsibility are not mutually exclusive.
"So today we have this financial capitalistic society in the Western world that uses money to drive incentives for humans to intervene on the resources of the planet. If we don't create an economic and financial incentive to protect and restore nature, we're going to lose it."
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