Protagonists of compensation, part II

In the Past section we investigate the capacity of forests and other vegetation to capture carbon and about sustainable ways to promote this capacity. In this section, we will delve into the application of this metabolic process characteristic of vegetation within a market: The carbon market.

The carbon market arises from the need to reduce and compensate for the accumulated greenhouse gas emissions in the atmosphere that cause climate change. As this is a new and constantly expanding market, we will analyze its achievements and challenges, as well as its incentives, economic viability, certification systems and its important social component.

A real challenge is the payment that land owners receive for these projects, which is generally not a fair payment, nor does it really encourage lasting climate action.

Toroto: What is a carbon bond? Are all carbon credits the same?

Skylight: A carbon bond is an incentive generated by the carbon market that offers a “credit” equivalent to one ton of carbon dioxide (TCO2e) emitted or avoided. The interesting and at the same time worrying thing about this market is that bonds vary a lot in quality and price. As a market in constant construction and growth, there is an opportunity for achievements to be overestimated, miscommunicated, sold at extremely unfair prices or for the lack of transparency that exists to generate double counting of bonds, among other situations. The market has many challenges, but above all, many positive future prospects.

That said, no: not all carbon credits are the same. Beyond the lack of regulation, a real challenge is the payment that land owners receive for these projects, which is generally not a fair payment, nor does it really encourage lasting climate action. This problem is mostly the responsibility of market intermediaries, who generally receive an unevenly larger share of the total payment per bond issued and it is the responsibility of the customer to ensure that they are investing in a forest carbon project that has the correct social and environmental safeguards, in addition to being transparent and traceable.

T: What to do in the face of cheap carbon credits that promote no incentive for a company to stop polluting, nor any for land owners?

L: As I said, not all carbon credits have the same quality. Currently, the carbon market is full of bonds that don't faithfully represent that tonne of equivalent carbon dioxide. In addition to this, in the quest to achieve climate objectives as cheaply as possible, many companies have encouraged the development of projects that do not pay enough to the owners of the land and, instead of helping them to improve their living conditions, they are prevented from doing so. We at Toroto are part of a new generation of carbon bond developers and we ensure that the payment per project fairly remunerates the work of the owners of the land, with on average more than half of the profits being what they receive.

In addition, there are carbon credits emitted from tons of CO2 avoided, which represent pollution that could have been and was not. Personally, I believe that these efforts should be applauded, but not compared to bonds that can have a series of important co-benefits in terms of water and biodiversity, for example. Faced with these avoided carbon credits, which are usually cheaper (although it is not a law), there is a risk of facilitating Greenwashing because they do not imply a root change in the company that buys them. In the face of carbon credits that do not encourage climate action, it is important to stand up, speak up and generate change. These projects can be done the right way, giving real benefits, but like anything good, it requires patience, time and money. Carbon credits are a tool that can be used to compensate for much more than just pollution, such as the extraction of water from aquifers and the destruction of the habitat of different species, so we need to make the most of this opportunity.

Who do I think should reap the most benefits from the carbon market? Definitely the owners of the land.

T: Is the carbon market profitable? Is there economic viability?

L: The carbon market is highly profitable. According to studies published by Ecosystem Marketplace, the voluntary carbon market was worth more than $1 billion in 2021. AND it is not only profitable, but it has multiple benefits that are reflected at the international level towards the fulfillment of global sustainability goals. For example, the carbon market allows countries and companies to internalize a price for their emissions, creating incentives to mitigate their carbon footprint and making new clean technologies more competitive. However, for those who are most profitable it is for the communities responsible for climate action in the field. In Mexico, these communities consist mainly of ejidos, which for the first time have the opportunity to access an emerging market that provides them with an additional, permanent and sustainable source of income while promoting the conservation and restoration of ecosystems.

T: Who do you think benefits the most from the carbon market?

L: As in many other markets around the world, the players who get the biggest piece of the pie are the middlemen. In the carbon market, this means that companies that develop or finance carbon capture projects take the highest percentage of bond sales. Landing this in our country, results in the fact that the owners of the land, without whom there could not be a project in the first place, do not receive an economic income comparable to their enormous and indispensable participation in the project. Taking into account that more than half of the country is in the hands of ejidos and indigenous communities, who carry a history of abuse, oppression and backwardness, these projects - when poorly executed and with erroneous interests - only perpetuate their situation and prevent their development. Who do I think should reap the most benefits from the carbon market? Definitely the owners of the land. It is essential to understand that a carbon capture project must contemplate the greatest possible benefit for the owners of the land, because they are the ones who know the territory best, in addition to being the ones who will remain there and will transmit that knowledge and that need to protect our natural resources to their children and grandchildren.; not the developers or the buyers of the bonds. As I said, but I really think it's important to stress, in Toroto this seems essential to us, and that's why we always focus on ensuring that the owners of the land receive what is right for their work: although it should be, this is not the norm.

T: What is the importance of involving land owners in carbon offset projects?

L: Involving land owners in projects is vital for many reasons. First of all, because those who are in charge of defending the territory are they. When the opportunity comes to change land use for fractions, extensive livestock farming or monocultures, it's up to them to say no and protect the ecosystem that their lands support. Secondly, because these projects are long-term, these people must be able to transmit this care to future generations: the success of the project depends both on them and on their children and grandchildren. Thirdly, they are the ones who know their territory best, so they have very valuable knowledge of the functioning of the ecosystem. It is very important to incorporate this wisdom with scientific knowledge so that the project is as robust and transdisciplinary as possible.

The owners of the land must be the first defenders of the project, and to be so they need to receive tangible benefits and be treated with the respect they deserve as guardians of their territory. In many cases, the owners of the land receive such a small percentage of the profits that it does not even allow them to survive on it. How can we expect to see real change if the income they receive cannot compete with oil palm cultivation or extensive livestock farming? It is a very big challenge that lies ahead of us as a society, because we are also used to wanting immediate benefits and, as I said before, these projects take time.

If, through measurements related to ecosystem services, we can make more people understand the importance of caring for the natural ecosystems we still have and recovering those that are degraded, we must make the most of this tool.

T: Are there additional benefits to generating carbon credits from having a forest under a carbon capture project?

L: Of course it is. Carbon credits are the unit that is being used the most to finance climate action projects, but this does not mean that the only benefit we will obtain will be carbon capture. A well-done carbon project, hand in hand with the owners of the land and based on ecological restoration and nature-based solutions, has a positive impact on the health and resilience of the forest, which is reflected in the different ecosystem services they provide us: providing habitat for different species, conserving biodiversity, regulating air quality and temperature, cushioning natural disasters, preventing erosion and improving soil health, promoting pollination, regulating water flows, among others. All these co-benefits can be measured alongside the measurement of carbon capture to strengthen the project itself, and they directly impact the owners of the land by improving their quality of life, and also, although sometimes we forget, in us, beings from urban areas.

T: How do these benefits improve everyone's quality of life? (Beyond those directly involved)

L: The loss of natural ecosystems has a negative impact on a global level, accelerating the environmental and climate crisis we are currently experiencing. We can quantify the recovery and conservation of our natural systems by measuring it in terms of ecosystem services such as those mentioned above. This is an anthropocentric concept that describes nature around its usefulness for humans, which is why it has been widely criticized by some sectors of the scientific community, since nature does not exist to sustain us. If, through measurements related to ecosystem services, we can make more people understand the importance of caring for the natural ecosystems we still have and recovering those that are degraded, we must make the most of this tool. In addition, this is a concept that reminds us of our dependence and relationship with natural resources. Even if we don't realize it, taking care of a forest hundreds or thousands of kilometers away involves taking care of the quality of the air we breathe in the city. Caring for a forest regulates the temperature we perceive. Caring for a forest promotes the home of the pollinators that provide the food we consume. We don't realize it, but benefits are everywhere and they come to us all.

T: What do you think the future holds for us?

L: I think that at this point the fact that climate change is already happening and is already wreaking havoc around the world is undeniable. Apparently the sixth mass extinction has already begun, water scarcity is very worrying and every year natural disasters will be more powerful and recurring. However, I also believe that all the efforts we manage to materialize now will be reflected on a larger scale in the future.

These efforts are not just a matter of individual actions, now more than ever we need collective action and the unification of sectors. Both private and business, with governments and with civil society. It is absurd to continue to believe that a global crisis will be resolved without the collaboration of the entire planet; now that we understand a little more what forests do and how the carbon market works - with everything and its challenges to make it fairer - we can understand why we get involved in projects that support different areas, sectors that before would never have had the opportunity to live together and work hand in hand.

I refuse to give future generations a world like or worse than the one I came to, and fortunately I'm finding a lot of people who think like me and have every intention of doing something about it. We can see the result of these actions for many years to come, so focusing on the present and what we can do today will be the key to the future. One of the things we can start with is to take advantage of the opportunity provided by forest carbon capture projects to care for our forests, as well as to support and finance climate change mitigation.

About the interviewee: Lucero works in Toroto as Center Operations Manager. He studied a degree in Biology and a master's degree in Sustainability Sciences at the UNAM. What he likes most about nature is the diversity of life forms that exist and the relationship that different cultures have created with them. In his spare time he enjoys seeing his friends and visiting outdoor places.