Answers to the most challenging questions about carbon offsetting

Santiago studied Renewable Energy Engineering. In addition to being co-founder and CEO of Toroto, he is Director of the Student Energy board. At Toroto, he leads a technical team that operates nature-based solutions, ecological restoration, carbon markets and more.

Rarely in humanity have we faced a situation of such urgency and whose resolution is only possible through collective action; collaboration between individuals of our species and others, between sectors and with all those entities with whom we may never think we have to relate. This urgency is the climate crisis we are experiencing, as a result of the excessive emission of greenhouse gases into the atmosphere that has characterized the last century on planet Earth.

A real way to mitigate the damage we have caused to the atmosphere is through carbon offset projects. Carbon compensation is the set of strategies and solutions, both technological and biological and geological, that allow us to capture equivalent carbon dioxide of the atmosphere and store it for extended periods of time, so that the effects of climate change are reduced. An effective way is to offset carbon by implementing solutions based on nature and proper land management.

Carbon compensation is a controversial issue due to its different scope and challenges, however, we consider it a powerful and effective tool to combat the climate crisis. However, there are many speeches that seek to deny this strategy. We understand these positions, and for this reason, we decided to confront and answer them with our experience and knowledge, and who better than our CEO and co-founder as spokesperson.

Toroto: Beyond capturing atmospheric carbon dioxide and helping to curb the climate crisis, why compensate?

Santiago: In understanding that the systemic cause of the climate crisis has to do with the externalities of companies and the consumer systems within which we live, one of the most important processes that must take place to achieve a climate neutral economy is internalization of the negative socio-environmental impacts of the operation of any economic activity. So, for example, a company that pollutes must internalize that fact and not see it as something that is already outside its supply chain. We have seen a lot of tools and mechanisms that push and generate instruments so that companies can execute this internalization, or so that the economy in general can internalize what until recently were externalities.

Now, in this internalization process, the first thing they do is measure the impact they are having, and in that sense. the only way to achieve an environmentally neutral economy is to invest in climate action projects that restore ecosystem services that are being destroyed as a result of the economic operation. These ecosystem services are mainly carbon sequestration, water infiltration and biological corridors, so compensating has to do with regenerating the ecosystem capacity to offer the services we consume to have an economic activity in the first place. That's why it compensates. Beyond capturing carbon or any other service.

T: How is carbon offsetting related to the protection of forests and the ecosystem services they provide?

IF: The whole Earth offers ecosystem services; in any piece of soil there can be water infiltration or carbon sequestration or biological corridors - and we are not always talking about a jaguar passing by, but also corridors that allow the dispersion of seeds, or small mammals, insects, soil microorganisms, in short, of biodiversity. There can be all of the above on any piece of land. In a country like Mexico and in fact in the global south in general, the state of degradation of this land causes these ecosystem services to be quite reduced, because the Earth has simply lost its capacity to be our ally in the meteorological and climate regulation that we depend on to live; so, if we are to face the climate crisis in a real way, we must wake up: we cannot do it alone. We need the Earth to recover its capacity to provide ecosystem services to regenerate and regulate itself, and therefore, to remain compatible with life as we know it.

Now, the correct management of a project area - which is only a technical way of calling a piece of land - depending on its vocation, will be oriented to restoration, conservation or sustainable use. Any of these three efforts will result in an increase in ecosystem services. Everyone.

Sometimes there are technical cases in which a compromise can occur, but at the landscape level - if we don't stick to a small hectare - everything that helps to recover its mechanical functions will sequester more carbon and will infiltrate more water and will be a better biological corridor for biodiversity. It is very difficult for a properly managed landscape to only sequester carbon but not to infiltrate more water; it is very difficult for it to only infiltrate water but not be a better biological corridor. Proper management has a positive impact on these three and many more ecosystem services, I assure you because I have personally experienced it in Toroto.

One thing I can't stop thinking about is ecosystem and cultural services. In Apan, Hidalgo, where the maguey that is so important to the region's cultural identity is practically extinct, what we have done, in part, resonates and falls in such a good place because we have promoted the introduction of tens of thousands of magueyes back to the region, magueyes that will soon be born - will reproduce - and will become hundreds of thousands and soon there will be millions of magueyes in the region. Here we are restoring cultural ecosystem services and recovering the region's capacity to be proud of its biocultural heritage. The curious thing is that all of this is also financed by carbon, so this relationship between carbon compensation and the benefits it generates clearly goes much further. The correct management of resources is directly proportional to all the virtues we obtain from ecosystem services. It is normal that if we see a map where there is more water infiltration, there is also more carbon, because what is needed for there to be infiltration? Vegetation and soil. They are closely related. And it's no coincidence that they're closely related, we're talking about the ecosystem, the natural world. They are there as a result of millions of years of evolution, nothing is by chance.

T: If we think that the only reason forest carbon projects exist is because we humans created a climate crisis in less than 500 years, how ethical is it really to monetize a forest to solve an anthropogenic problem?

IF: Thank you very much for the question. This is perhaps the question that I ask myself the most and they ask me, the more I read and to which I can least give you a technical answer as to what is right or wrong. Now, I very much respect the position that it should not be monetized, however, it is a position that I cannot share. The climate crisis is the first problem we face as a whole species, and it has an expiration date, that is, if in 6 or 7 years we fail to significantly reduce the amount of greenhouse gas emissions that go into the atmosphere, we are going to be in a serious problem, but even more urgent is that if today we shut down all factories, ban internal combustion vehicles, shut down thermoelectric combustion plants and stop using airplanes, even so, there are already too many greenhouse gases in the atmosphere so that we can meet our climate goals of not reaching more than 1.5o C of average increase and especially not 2o C. It is extremely urgent to act.

Humanity has never faced a problem in which it has so little time; we are used to building ourselves in an intergenerational way and evolving over hundreds and hundreds of years. We are now less than five decades old. Unfortunately, we cannot solve two problems at the same time without continuing to rapidly lose the planet's biodiversity: problem one, the rotting of the socio-economic system in which we find ourselves, problem two: the climate crisis that we create. Indeed, the climate crisis is a consequence of the systemic system in which we live, unfortunately we don't have time to solve both at the same time, we have to solve the climate crisis now with the tools we have today and these tools are financial, they are of a commercial nature, whether we like it or not. Precisely because the economy is the problem.

The Earth has lost its capacity to be ours allied in meteorological and climate regulation on which we depend to live; so, if we are to face the climate crisis in a real way, we must wake up: we cannot do it alone.

So, today there is no capacity to restore the Earth without funding - it goes without saying that in the case of Toroto, that economic benefit goes directly to the owners of the land, who I must remember are people historically underserved by that same system - so, now I wonder, is the problem that they are monetized or the problem is that they are monetized by the same entities that are the cause of the climate crisis? Because if forests are monetized by their owners who are indigenous communities, peasants or simply historically oppressed social groups in the vast majority of the global South, I see absolutely no problem, The problem is when monetization continues to perpetuate colonialist dynamics of inequality, not monetization per se. If monetization could transform the global economy, wouldn't we like that? I think so. It no longer becomes so much a problem, more like a solution.

T: Permanence is an important characteristic of carbon compensation, however, under the imaginary -not so imaginary- that forests tend to burn frequently -more due to the pressure exerted by climate change- isn't it counterproductive to capture carbon and offset emissions through highly combustible forest projects?

IF: It is enough to first clarify that all projects that issue carbon credits in the world keep a certain amount of carbon credits in a place called Contribution pool. And the objective of this contribution pool is that when there are inevitable reversals, that is, fires or plagues or another situation, we take bonds from this place and put them in the name of the project, and therefore, the project never has more inevitable reversals than bonds issued. Now, the question is how many bonds and what percentage go to a contribution pool: in Mexico, until recently it was considered that 8% of the total bonds issued are allocated to this, but indeed, we have recently seen that this percentage of risk is underestimating the increased frequency at which fires occur in the future as a result of the climate crisis, so if 8% of the bonds are in this contribution pool, they should probably be 16% or 30% of the bonds. There are extremely sophisticated protocols that allow us to monitor this problem and also new protocols with the objective of making this pool of contribution something more representative of reality, based on a specific risk analysis by type of project, region and other essential variables to take into account. Returning to the fires and from a more communal perspective, Fires are closely related to forests and are a fundamental part of forest health, then, it is important to trust the capacity and wisdom of the communities that have managed these fires as another forest management tool.

I have to say that, a well-managed forest is a forest that does have fire and that over time its amount of carbon increases a lot; fires allow the establishment of seedlings, and a growing and young forest is a forest that captures a lot of carbon. There are 150 year old trees that are dead standing and below them, in the so-called undergrowth, there are millions of seeds and seedlings waiting for a glade of light to germinate and grow. Fires are a matter of understanding the way in which ecosystems work naturally, they should not be a threat to a well-managed forest carbon project. The correct management of a territory contemplates the use of fire since time immemorial, however, it is important to emphasize that the above of course does not justify or absolve irresponsibly caused fires, nor those directly caused by climate change; in the same way, I do not want to say that correct forest management is to promote fires in all cases: old forests play a very important and indispensable ecological role for the protection of genetic and cultural materials, so fire management is also a project-specific issue.

On the other hand, for those communities where fire management in forestry projects is not traditional or ancient knowledge, we always have the capacity to create and implement risk protocols. In all the projects we operate, we have crews that manage fire. We will always have the option of learning it.

T: It seems that developed countries pollute and developing countries compensate for that pollution. Isn't the carbon market just an extension of the colonialism of those first countries?

IF: Yes and no. The way in which the carbon market is configured today, let's say, the logic behind it, is a colonialist logic, because in most cases pennies or a few dollars are paid to the people who own the land for a ton of CO2 sequestered, when clearly this price does not reflect the real costs. Until just today, we are entering a period where perhaps the real costs of climate action are beginning to be glimpsed. In that sense, it is clear that the market is colonialist because it responds to a logical structure, where if the market is colonialist, so is the carbon market. If the system is colonial, so will the carbon market that exists within the system. With that said, I would go back to the beginning of this answer, and I would ask myself: who benefits? If we can turn the page around and those who benefit from this monetization are the people who own the land, then for me it's not bad anymore. The real answer lies in turning it around: this way, it implies an opportunity; it's different.

If we succeed in altering the way in which we use and interact with the carbon market, with political and economic will, we have to start with To revalue the owners of the land. That's just the beginning, there are a thousand things to do. We're doing them, but it's not easy. Now, after saying all of the above, perhaps I would not label the market itself as colonialist, but I would say that there are colonialist logics in it, and there are also logics that are not. From the outset, I think we are on the right side of things if we think that most of the benefits that result from the monetization of facing the climate crisis are going to go to the people who own the land.

Now, I don't think that it is as such a question only of the famous speech Global North vs. Global South. While it is true that there are three blocks responsible for the majority of greenhouse gas emissions, in my opinion, it is more a question of social and economic inequality, than of countries. Mexico emits approximately 1.4% of global emissions and is the sixteenth world economy. We would think that it doesn't make sense, however, Mexico is an extremely unequal country economically speaking. Economic inequality exists in all countries and that is more representative. What is really related to who issues, rather than a region, is a socio-economic sector. The socio-economic sector with the highest incomes is less than 10% of the population and emits approximately 50% of global emissions. More than a north or south issue, it is an issue of socio-economic inequality.

End of the first part of the interview.

Colonialism in the carbon market, the permanence and ethics behind working hand in hand with nature to solve an anthropocentric problem is definitely a matter in which we have to continue to deepen and offer alternatives, however, we hope that ours will be useful to you and that with this first part we can open up dialogue and encourage reflection on how to resolve a crisis while we are living it day by day.

We invite you to continue your reading with the second part of this interview, which will premiere very soon. In it, we will talk about additionality, the true price of a carbon bond and what proper land management looks like.