Pachama, a carbon credit company, is focusing on reforestation projects as one of the most effective carbon removal solutions. The company uses remote sensing and artificial intelligence (AI) to capture carbon and verify carbon credits. Pachama’s AI provides more accurate and transparent data, which gives buyers of carbon removal credits more assurance in reaching their net-zero goals. Pachama has been working with over 150 forest projects worldwide, and its large carbon credit buyers include Salesforce, Microsoft, Airbnb, Netflix, and Shopify. The company has raised $79 million to date, with its latest $55 million Series B funding round aimed at speeding up its platform to bring integrity and transparency to carbon credit markets.
While the world needs carbon dioxide removal (CDR) solutions to reach net-zero by 2050, not all solutions that remove the harmful gas are viable and beneficial. The nascent technological carbon removal industry has been growing rapidly as large companies support them to scale up. Governments are also funding CO2 removal startups. However, the UN recently slammed technological or engineered removals while favoring natural ways of capturing carbon. The panel said that carbon removals using machines are “unproven” and “risky”.
Globally, CDR captures 2 billion tonnes of CO2 a year, with over 99.9% of that done through conventional ways like restoring and expanding carbon-hungry forests. Estimates suggest that natural solutions can account for 30% of climate change mitigation efforts by 2030. Plus, forests are home to 80% of all terrestrial biodiversity, while 25% of the world’s population relies on forests for a living. However, natural solutions have some big issues to deal with – lack of high-quality supply. For instance, several reforestation projects in the U.S. were questioned for their quality. Also, some projects in Brazil’s Amazon were claimed to be not delivering the real carbon reductions they promise.
Pachama’s technology comes in to address the quality issue. The company believes that a few key characteristics make nature-based solutions better than engineered ones. For one, nature is a lot more scalable because it’s faster and easier to plant trees than build giant machines. Also, nature-based removals are more cost-effective. High-quality forest projects often cost less than their engineered counterparts. For example, carbon removal credits from direct air capture range from $250-$600 while Pachama suggests $50-$82 for high-quality reforestation projects. Not to mention their beyond-carbon benefits such as promoting biodiversity and helping local communities.
Reforestation is a crucial climate solution, but it’s not as simple as planting trees. It needs to have four key features to be a quality project. Firstly, reforestation projects must be composed of native species as non-native plants may not be suitable for the local terrain. It’s also crucial that the project offers a diverse selection of species, over 5 species, as natural forests have. Secondly, trees must be planted in the right terrain. That means the reforestation project must be additional. If it’s naturally occurring in the area and its surroundings, it may not be additional. Pachama assesses additionality through baseline and regional suitability checks.
Thirdly, project developers often exploit financial incentives, and the carbon credit market is no exception. Project developers that have collected carbon credits from restoring forests may cut down trees for lumber at the end of the crediting period. Pachama has a way of assuring that the projects they support are not like that through forest cover checks. They look at the tree cover 10 years before the project start date and ensure that there wasn’t any intentional logging or clearing happening prior to the project.
Lastly, a fully engaged local community is critical in protecting and monitoring a reforestation project. Pachama checks levels of community involvement by various means. These include checking if there are indigenous people impacted by the project and performing Free, Prior, and Informed Consent (FPIC).
In conclusion, while there are many carbon removal solutions available, reforestation projects are some of the most proven, high-value carbon removal solutions. However, not all reforestation projects are created equal, and it’s essential to ensure that they meet certain markers. Pachama’s technology provides a way to address the quality issue of nature-based solutions, making it a more cost-effective and scalable option. With the world needing to reach net-zero by 2050, it’s crucial to have effective and efficient carbon removal solutions in place.