Planting trees and conserving our forests has been a long known way to mitigate climate change and draw down carbon. With climate activism becoming an ever-growing global movement over the past decade – corporations and governments are actively seeking ways to push capital into organizations to help them decarbonize operations.
But as is with any emerging market there are challenges.
Carbon offsets are a method of financing reforestation projects.
– Diego Saez Gil
It’s necessary to understand this as in the early days of the carbon offsets market major corporations would purchase offsets that never really drew down carbon (either due to issues like double counting or the trees planted not being monitored for the years coming – more on these issues in future podcasts).
Funding for reforestation is abundant but verifying the performance + validity of purchased offsets is slowing this market down
Enter Pachama...
Pachama enables remote verification over the life of reforestation projects by utilizing satellite data mixed with AI to ensure reforestation projects are being maintained and are performing for the life of the project.
Over the past year, they have been a maverick and leader in the carbon offsets space – driving large corporations in as customers and significant funding dollars from large organizations and climate-focused funds.
With their technology continuously improving by the constant support and focus of their data science team, Pachama is on pace to truly bring transparency to the carbon offsets market. This could unlock billions per year in capital for reforestation projects.
Market Need:
The carbon offsets market has a lot of catching up to do for us to truly reach the targets we need to hit to draw down enough carbon before the world heats up beyond repair…
However, providing transparency and confidence to teams/corporations that funnel money into this marketplace changes the game for adoption and more importantly pace of reforestation. Though transparency at scale is necessary for this market to break open, the world requires a recalibration on what carbon offsets are truly used for.
Traditionally we view carbon offsets as a proxy method for corporations to “cheat the system” and not actually provide any tangible progress in decarbonization. This was true before companies like Pachama – which now makes carbon offsets a true funding mechanism for drawing down carbon through reforestation
This reframing suddenly opens up an ocean of opportunity for startups or groups like Pachama to serve. Everything from new climate asset types/classes to improved transaction transparency are on the table when we view carbon offsets as a version one climate asset class.
Future Outlook:
Funding and customer traction are the least of Pachama’s concerns – as is with any great company. We expect to see high-end talent funneling into Pachama – which should result in new products and product lines providing ways to funnel more money into climate-positive assets. As demonstrated by the launch of their API.
This is the start of a new market after what I call the “Pachama Recalibration of Funding Carbon Sequestration” and I’m hopeful that we’ll see a significant emergence of startups led by top founders. The key thing to keep an eye on isn’t only carbon drawdown technologies – but the companies that are exploring ways to funnel capital at a large scale into the breadth of projects powered by a breadth of technologies.
Asset classes and funding models for carbon drawdown. That may be the biggest opportunity of them all.
About The Author
Swarnav has over 10 years of experience in the energy & climate tech space, holds 2 patents and is active in the tech, climate and media industries. He specializes in Product/Product Innovation as well as Go-To-Market and Growth Strategy.
By training he’s a Materials Engineer with a background in research from his time at Georgia Tech and University of Illinois (UIUC).
He founded TouchLight a utility backed energy company focused on developing IP for utilities and startups pushing electrification forward. He also serves as the appointed Chairman for the Town of Yorktown’s Climate Smart Communities Task Force, where he helps with drafting legislation and enabling sustainability efforts within the town.
Concurrently, Swarnav founded The Impact to help investors, emerging founders and driven climate enthusiasts discover and identify new climate-tech startups, technologies and opportunities before they hit the traditional media sources.