Nature. It is the most ancient of assets classes. The most powerful of climate allies.
Yet it has been overlooked by the digital revolution that has consumed most other sectors.
But now old is beginning to meet new to help solve some of the biggest challenges of our time.
In this piece we take a look at the technologies and the start-ups that are ushering in a new era of interaction and understanding between us and the natural world we live in.
The origins of these famous words can be found in the early 1970s and the dawn of the Information Age. A time when new programming languages and advances in personal computing were poised to dramatically change the way we access and share information. Goodbye analogue. The digital era has arrived.
Since then, we’ve seen fintech, edtech, medtech, yestertech, just-about-everything-tech. Code, microprocessors, and the relentless march of innovation have worked their magic to reduce costs, increase access, and improve standards across almost all industries and human endeavours. Today, thanks to 0s and 1s, you can trace your ancestry back for hundreds of years with a test-tube of saliva; use your phone to speak Arabic; or let your car take over for that tricky parallel park.
But there is one frontier that has yet to undergo a wholesale digital transformation. Nature. More specifically, the preservation, restoration, and analysis of key ecosystems like forests and oceans that allow for life on earth. How much carbon is stored in the rainforests of Borneo? Is biodiversity improving in the Pantanal wetlands? How is marine life adapting to man-made pressures? These are important questions that we don’t yet have accurate answers to.
By now most of us appreciate both the celestial value of nature and its central role in tackling some of the biggest environmental issues of today. We now understand that nature is not just the end, but also the means. The “demand” for nature’s services is not the problem, in the same way that back in the mid-1900s people would have presumably recognised the value in improved communication. People and businesses are willing to pay.
The roadblock, however, is “supply”. There’s a lack of high-quality and transparent natural services to pay for. The most relevant examples of these services are nature’s ability, via ocean and land sinks, to absorb CO2, and the importance of biodiversity in preserving our food systems. Not to mention that nature also provides clean air for us to breathe, water for us to drink, beauty and excitement for us to enjoy.
We want to pay to maintain these services but, before we pour millions into them, we need to be sure that whatever or whoever we pay to facilitate them is high-quality, trustworthy and will have the impact that they claim.
So, how do we use technology to standardise, enhance, and quantify what nature has to offer so that a market for its valuable services can grow faster than a Chinese moso bamboo? Thankfully a whole raft of innovative technologies and start-ups are emerging to tackle these exact challenges and unlock the high-quality “supply” component of natural markets.
Setting up and operating a nature-based carbon project is not for the faint hearted. There’s the feasibility analysis, the painstaking process of certification, carbon credit inventory management, stakeholder communication, to name just a few of the challenges faced by the NBS carbon project developers. It can take years and hundreds of thousands of dollars to get a new nature-based project onstream, presenting a clear barrier for would-be developers or landowners who are considering using their land to generate carbon credits.
Until recently, this market has largely been ignored by tech companies who have preferred to build more generic operating systems and project management tools for a broader customer base. But these tools don’t meet the unique requirements of natural asset owners and operators who use and monitor specific data like satellite mapping, carbon inventory, and biodiversity metrics. Nor do they effectively cater to the pressing need for transparency in the sector, particularly when it comes to stakeholder reporting (think investors, buyers of credits, local communities, auditors etc). But as institutional money and large corporate buyers flock to this space, bringing with them increased scrutiny and professionalised reporting standards, developers are now looking for ways to modernize their operations and attract this keen capital.
Funnily enough, building this nature-specific operating system is precisely what we are doing over here at Cecil. We provide NBS project developers with the tools to develop high quality projects, build trust with stakeholders, and prove compliance. All contained within a single source of truth that combines remote sensing data with that crucial ground source data.
The Amazon rainforest is 5.5 million square kilometres. That is larger than the entire land mass of Europe (excluding Russia) with room to spare for Turkey, Morocco, and Iraq. It is also one of the most valuable environmental assets on earth. How to protect something so important but so large? Not easily. Boots on the ground, measuring tapes, flyovers, and incentive schemes have been some of the crucial but rudimentary tools of choice so far. And, despite all the hard work that has gone into protecting the Amazon and other forests, we’ve still seen huge levels of destruction over the past decades. Ground truth data will remain vital but it needs help.
Thankfully, that help is on its way. Today hundreds of satellites powered by the likes of Planet and Maxar are orbiting the earth and beaming back reams of high-definition, real-time images of all four corners of the earth (we’d highly recommend Planet’s Snapshots newsletter!). Drones using radars can map out huge areas of land in 3D. Start-ups such as Sylvera take all this data, and with the help of machine learning, analyse it to accurately quantify carbon in vegetation, check for deforestation, and drive higher standards in nature-based carbon projects.
Meanwhile, in the biodiversity space, a handful of ground-breaking companies like Naturemetrics (environmental DNA surveys), Pivotal (biodiversity sensors and AI), and Rainforest Connection (bio-acoustic monitoring) are providing us with revolutionary new ways to finance, track, and report on biodiversity.
These pioneers are enabling forests and other natural ecosystems to be monitored, quantified and protected at unprecedented scale, accuracy, cost, and speed. While many challenges lie ahead, and old school on-the-ground-initiatives will always remain important, it is something to get excited about.
If you want to sell shares or grain, no problem. Transparent, standardised, and established exchanges like those for stocks and commodities give confidence to sellers that they will find buyers for their wares at a clear price. Today, tomorrow, and at any point in the future there will be a market that you can trust, and where price reflects quality.
Such markets don’t yet exist in carbon, and markets for biodiversity are even more aspirational. How willing would you be to make a 100 year commitment to convert your ancestral farmland into forestry based on the promise of today’s wild west carbon markets?
But, here too, progress is being made. Companies like Xpansiv and AirCarbon are making headway in building carbon exchanges (a recent $400m investment by Blackrock into the former will certainly help). Meanwhile, tech companies like Patch, Nori and NCX help to ensure that suppliers of carbon credits can seamlessly find buyers. These platforms give confidence to suppliers of credits that they can invest in growth in the knowledge there will be future demand for their services. And where the tech-enabled verification and monitoring companies drive higher standards through transparency, open marketplaces drive higher standards through competition.
And, of course, there’s also crypto and blockchain. Several have tried, see Toucan and KlimaDAO, with mixed success, to bring carbon credits “on chain” and create liquidity. Adam Neumann, the controversial WeWork founder, is giving it a go too with FlowCarbon. There are clear benefits that blockchain can bring to carbon markets, particularly when it comes to solving common carbon critiques of transparency and traceability, and it could help unlock new funding sources for nature, but the contribution this technology can make to enhancing high quality supply of NBS remains to be seen.
Many of the challenges faced by nature-based solutions cannot be fixed with technology alone. No amount of satellites and AI can restore our ecosystems unless combined with the correct incentives, community engagement, and responsible governance. But, by enabling improved transparency and lowering costs, technology is dramatically reducing the barriers to entry for new supplies of nature-based projects and increasing the flow of much-needed capital to the most powerful ally we have in the fight against climate change.
Just as technology transformed the way we communicated, medicated, learnt, and loved, it is now set to transform the ways in which we understand, interact with, and enhance nature. The words “Hello, World” couldn’t be more pertinent.
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