 Hello, everyone, and welcome to this Tomcat Center Tackling Global Challenges event. Thank you so much for joining us, and thank you for your patience as we deal with a little internet connectivity issue. If you're new to this series, this event series, let me just briefly tell you what it's about. So basically what we do is we highlight a particular problem area in sustainability, and then we engage outside experts to provide insight into the nature of the problem and the origins of the problem and to help identify opportunities for developing solutions. So last year was our inaugural season for this event series, and we focused on the broad problem of plastic production and plastic waste. This year, our topic is tropical deforestation. We chose this topic primarily because of its critical importance and unique urgency. So tropical deforestation has an outsize impact on climate change. Deforestation is thought to account for at least 10% of anthropogenic GHG emissions, which is sort of a staggering number if you think about all of the emissions from fossil energy use. More important, arguably, than the emissions associated with cutting down forests is the fact that as we lose forest coverage, we also lose a incredible carbon sink. And so we basically reduce our long-term potential for sequestering and storing carbon on the planet. But then beyond emissions, tropical forests hold something like roughly half of the species of life on the planet. And deforestation and related phenomenon of forest degradation drives mass extinction of these species, resulting in irreversible and, in many cases, incalculable loss of biodiversity. So I'm really honored and pleased to welcome two individuals who have really spent their careers working to understand deforestation and develop and implement solutions to halt deforestation. But before I introduce our first speaker, I want to highlight one other opportunity that we're really excited about at the Tomcat Center that synergizes with this series on tropical deforestation. So just this fall, we launched a new program called Tomcat Solutions, where we will help teams, and these can be teams of students, faculty, staff, researchers, scholars, et cetera. We help them through three phases of support to develop rapidly deployable solutions to critical problems in sustainability. And we've highlighted two problem areas, one of which is tropical deforestation. So if you are listening to this event today and you're inspired to try to develop a solution, to think of a way to address this problem or its underlying causes and nucleate a team to help you do that, or if you already do research in this area and you're interested in working to translate your findings into a solution, or perhaps you're already implementing a solution to deforestation, but you're interested in scaling it up rapidly to maximize its impact. Any and all of the above, we are really excited to help you through the Tomcat Solutions program. Donica will put the link to a website where you can find more information about that program. We're doing that in partnership with the Woods Institute as well as a new initiative on campus called Emergence, which is dedicated to purposeful entrepreneurship. So today, like I said, I'm honored to welcome our two speakers, Matt Leggett and Dan Nebstad. These two individuals have deep expertise in deforestation, not just from scholarly work, but first and foremost from many years of direct experience, working in the field, working in deforestation hotspots, and they're both pioneers in developing new strategies to combat deforestation. So what we're going to do is we're going to hear presentations from both of them. So I'll provide a brief intro to each person individually before their presentation. And then we'll have a combined Q&A session after both presentations have concluded. You are welcome and encouraged to submit questions through the Poll Everywhere function. And then you can vote on questions that others submit to bring them to the top of the list. And we will do our best to accommodate all of your questions. So with that, let me now introduce our first speaker, Matt Leggett. He is currently the Associate Director for Sustainable Commodities and Private Sector Engagement at the Wildlife Conservation Society. He's based in the UK at the moment. He's been there for the past several months, I believe. But really for the past seven or eight years, he has spent the majority of his time in Southeast Asia and in Indonesia in particular, working in the field, again, to understand drivers of deforestation and the Tropical Force of Indonesia and to develop solutions. I actually first came across Matt's name in a New York Times article I read in, I believe it was in early August, called How Your Cup of Coffee is Clearing the Jungle. It's an investigative reporting article on deforestation and ostensibly a protected area in Indonesia. Matt was featured very prominently in that article. It was really sort of a bright spot. His work and the success of his work was a bright spot in that description of this problem. And so when we selected this area for this series and as one of the critical problem areas to highlight for Tomcat Solutions, he was, or most of my mind, someone to reach out to. And we were thrilled that he agreed to join us today. Since he's in the UK, this is, I guess, a little bit past midnight for him. So we're especially grateful of his willingness to participate in the middle of the night for him. So, Matt, without further ado, thank you so much for being here. Hi, everyone, and I appreciate that introduction, Matt. And thank you to everybody who also invited me to join this conversation. Unfortunately, Matt, I'm having some real trouble uploading and sharing my screen at the moment. So I wonder if you might be able to swap the dam for the initial presentation. And then by the time I have sorted it out, I feel like I'm going to be better off kind of second. Does that work? I'm not sure if Matt's still on mute or not. Matt Cannon, do you think that we could introduce Dan so that we can proceed with him first? And we'll try to work out, Matt, like it's audio and video? Apologies. I clearly spent too much time in the rainforest and not capable of dealing with Zoom at midnight. But apologies, it will take me a minute to figure this out. Yeah, sorry, I was trying to say, of course, I'm unable to unmute myself with this particular configuration. So yeah, that'll work fine. Sorry for the hiccup there. So yeah, let me introduce Dan first in and hopefully by the time we get to your presentation, Matt, we'll have that sorted out. So yeah, also very honored to welcome Dr. Dan Nebstad to this event today. Dan is the founder and the president of the Earth Innovation Institute, which is much closer to home here at Stanford. It's based over in Berkeley. But similar to Matt, Dan has spent a very large portion of his career working in the field. In his case, his area of focus has been the Amazon and he has over 30 years of experience in the Amazon studying the drivers of deforestation and helping to craft new programs and implement new and innovative programs to address that problem. He's one of the world's experts on red, reducing emissions from deforestation and forest degradation in the developing world. And he's been a key driver in implementing and trying to scale that mechanism for protecting tropical forests. He, prior to the Earth Innovation Institute, he was a senior scientist at the Woods Hole Research Center, chief program officer of environmental conservation at the Gordon and Betty Moore Foundation, with a lot of ties to Stanford, and a lecturer at Yale University, where he obtained his PhD in forestry. So Dan, thank you very much for joining us. OK, well, thank you for that introduction, Matt. And I'm delighted to be part of this series. And I love the focus on solutions of the Tomcat Institute. And I want to share with you just some stories about the Brazilian Amazon. I love the Brazilian Amazon. I moved there in 1984 to start my PhD research and never look back, I feel like. And I want to make some connections to the people of the Amazon, governors, farmers, and others. And I think in the long run, it's those people who are in key positions to determine how the land of the Amazon is managed, who really, if they embrace this agenda of keeping the forest standing and building a development model around it, they can make all the difference in the world and the future of this forest. I'm going to pull up some slides here. And hopefully, this works well, and that everyone can see those. The Amazonians are why I'm optimistic about the Amazon. Those who live in the forest region. I'll organize my comments along these four topics. There was a huge decline in deforestation. How did it happen? And why has deforestation doubled since then? What are the big zero deforestation sourcing commitments that companies have made? Are they working? And some really good news, I think, reinforced by some of the decisions in Glasgow last week about net zero movement and the governors of the Amazon's proposal for keeping the forest standing. First of all, why should we care about the Amazon? Matt already referred to some of the reasons. The statistic that really hits me is if we think of the last 10 years of global emissions of CO2 to the atmosphere, that's about the same amount of carbon that's stored in the trees of the Amazon. If all of that wood and those roots and branches were to be cut down and burned, that's about the amount of CO2 we'd get into the atmosphere. And it's leaking into the atmosphere right now through deforestation, through degradation from logging in fire. And it could be that really severe droughts become more significant. It's something that was the focus of my research for about 20 years, pushing the forest to see how much drought it can take before it starts to fall apart, before the giant canopy trees don't have enough water and die. And at what point in a drought does the forest, which is usually incredibly tolerant of drought and resistant to fire, starts to become inflammable? And that's what the key is to the forest dieback, this interaction between rainfall, severe drought, and fire getting into the forest, which is usually very difficult to burn. And if that happens at a big scale, not only the carbon going into the atmosphere, but also the amount of energy that's processed by the forest itself as it evaporates huge amounts of water under the equatorial sun. That's so big that many climate models show that if we lose a big chunk of the Amazon forest, weather is going to be different. It's going to be different in Iowa. It's going to be different in California and could have implications for the monsoon. But also a note of optimism. There's still time to keep 80% of the forest standing and that's what I want to move to now. I'm not going to go through all of these historical events that I've superimposed here on the annual deforestation in the Brazilian Amazon. So you can see that sometimes 30,000 square kilometers of forests are cut down in a single year. And that trend has decreased generally since 2004. Even today, deforestation rates are less than half of where they were at their peak. And that's good news. An important point about this decline in deforestation is that it was driven in part by the anticipation of a new carbon market, a global carbon market. Anyone who can remember the climate summit in Copenhagen in 2009, also a very cold, long-lined cop like we had in Glasgow this last two weeks. It didn't happen. The climate, the carbon market did not come together. And because of that, partly because of that, 7 billion tons of CO2 that are not in the atmosphere, that carbon is in trees in the Amazon, only 4% of that Brazilian contribution to climate change solutions has been compensated. The way that deforestation declined is a long, complex story. It's an interagency strategy hatched to really crack down on illegal activities, including cartels that operate in the Amazon around illegal timber and minerals and land. There was a two-thirds increase in the area of the Amazon under formal protection by national parks and reserves under indigenous territories, also well-protected in that case, extractor reserves. There was other measures taking such as suspending access to public credit lines to all the farmers in high deforestation, Monticepios or counties. An extraordinary array of measures were taken and it worked. Deforestation declined about 78% and as we saw in that graph. But I should point out this, all of the things I just mentioned are mostly negative measures, negative in the sense of just saying no to those who would clear for us. Short on carrots, not a whole lot of positive incentives for farmers or other actors to do the right thing, who are doing the right thing. Same graph here, but let's focus now on that period from 2012 to the right. It's been a period of doubling of deforestation. We don't have this figured out yet. And what's going on there? First of all, the Brazilian Amazon, I love to talk about it because it's been such a huge laboratory. Everyone knows about the Amazon and usually if you read in the news about something in the Amazon, it's probably happening in the Brazilian side where 60% of the Amazon forest is located. But over those last 12 years, the Amazon fund was created. A big bet by Norway, Germany and others to basically reward emissions reductions that are achieved by slowing deforestation through the Amazon fund. And that's three of the 4% of the emissions reductions that have been compensated, about a billion and a half dollars. Not all creates agile, effective finance. One government I just talked to has for seven years been trying to spend their Amazon fund money. It comes from the Brazilian Development Bank and it's rather bureaucratic. They've only spent 60% in seven years. We've had hundreds of corporate pledges, about 500 globally to remove deforestation from supply chains, palm oil, soybeans, beef, timber, pulp and other things. And two of those commodities are very big drivers of deforestation, beef production and soybeans in the Amazon region. We've had something like the Brazilian soy moratorium which really predated the zero deforestation corporate commitments, which we'll talk about right now. Did it work? We had companies representing 90% of all the buyers of soybeans grown in the Amazon region, basically saying, listen, if your soybeans are grown in an area cleared after 2008, we're not gonna buy it. And it was enforced. The problem is farmers didn't like it. They rejected them on moratorium because what about the farmers who have more forest than is required by law? In Brazil, that's a really big deal. You have to keep 80% of your farm under forest in Brazil. And some farmers, they really like forests and they've been keeping more forests. And now you're told that even 20%, you can't clear. So there weren't a whole lot of soy farmers in that category, but it was really more the principle. And so in this sense, the soy moratorium lost a key ally, as we'll see in a few minutes, farmers control a huge amount of forest in the Amazon. And if they're not on board with this, they could push to eliminate the forest code and then we'd have a free for all. So had the soy moratorium made an exemption for those farmers who have a little bit of forest, they can still clear legally, it would have landed much more positively. Just to give you a quick glimpse of what the Brazilian forest code is, it's the world's most ambitious, let's say, forest conservation policy that applies to private land. I already mentioned 80% of your farm has to be forested in the Amazon. Your riparianing zones, headwaters of streams, steep slopes, all that has to remain under forest. And it's 35% in the Sejado part of the Brazilian Amazon and 20% legal requirement in the Sejado elsewhere. Well, let's talk about an actor that you rarely see in the news. The Wall Street Journal carried a piece on Mato Grosso just about a week ago, two weeks ago, I guess. And I was delighted to see that because these are very powerful figures. They've got huge budgets, they have big economies, it's a federation, so like in the United States, governors have quite a bit of autonomy to make rules and control their budgets and to control big chunks of the state. In 2009, here in California was formed something called the Governor's Climate and Forest Task Force that included several governors from the Brazilian Amazon. And it was called by Arnold Schwarzenegger who had pushed through the Global Warming Solutions Act, which is the basis of our cap and trade here. And there's a part of that called international offset provisions. And basically he wanted the governors to prepare for this flow of finance coming from the really big emitters who are capped under the cap and trade who have an option of basically offsetting a few percentages of their emissions to achieve the target. And in 2021, 12 years later, they're still waiting. The offsets program has never been implemented although we do have the California Tropical Forest Standard. In 2014, governors from 35 provinces and states around the world in the tropics, Indonesia is included their Mexico, Peru, Columbia. I forgot to say, by the way, that Earth Innovation is headquartered here in Berkeley but we have offices in Brazil, Colombia, Peru, Indonesia and Malaysia. So we're very close to a lot of these governors. They said, we're gonna cut deforestation 80% by 2020 if there's sufficient finance and partnerships and basically neither materialized. A few states got finance, a few states got partnerships with companies as we've reviewed recently in a paper. But also the Brazilian Amazon governors, they're very strong in saying, listen, our job is to implement the law and it's a law and order agenda, but they've also in recent years realized that they have a big role to play in partnering with indigenous people in local communities. And there's a whole set of principles developed through the governor's climate enforcement task force that's being implemented today in the Amazon. They're really all about innovation and green growth. That's what gets them votes. And just to look at one state's trajectory, Mato Grosso, it's a giant, oops, I skipped a slide here. I'm sorry, let me, I think we're good now. Okay, what were to happen if that law and order agenda of the governors were to be put into practice? Here's a map we developed for the Brazilian Amazon. The dark green are protected areas, indigenous areas I should say. The light green are a formal public protected forest. The orange is what I really want you to look at. Those are farms. Those are farmers who have submitted. There's some land grabbers and there's, hopefully they'll be filtered out, but these are farms who have submitted their rural environmental registry applications. And that gives them the right to do business. And those are the forests that are by far the most vulnerable in the region. They're literally right next to cattle pastures and soy fields. And so if the forest code were to drop, those areas in orange would all be up for grabs. And without those forests protected, it's gonna be really hard to keep forests in the Amazon above even 70%, let alone 80%. So this is a big deal. And if the lower right hand part of that map is a state called Mato Grosso, it's Brazil's biggest agricultural producer. We just estimated 10% of, there we go, okay. China's imports of soybeans, China imports 100 million tons of the 160 million tons of annual trade in soybeans globally and 10% of it comes from this one state. In this figure, we can see the real measured values of forests on the left and projections out through 2030 that are embedded in the state's formal multi-stakeholder supported targets. So basically this state was emitting just from deforestation in the early aughts about the same amount of carbon dioxide as the entire economy of California, the world's fifth largest economy, lots of deforestation, some years almost 12,000 square kilometers. And we can see how the total forest area of primary forest in dark green declined and that little dotted line is the net emissions the light green is the area of secondary forest and the orange is the area of forest lost each year. Now going forward, there's a public policy in place to basically build forests back up. There's a huge area of secondary forest that basically if farmers see a little incentive for not clearing it and for protecting it from fire, a lot of them will do that because these secondary forests are on second, are marginal lands. They're not very good for farming or livestock. And there's also a 3 million hectare target, official target of the state for restoring forests along riparian zones. If all of this works, it means that the forest of the state become net negative in terms of CO2 emissions in about 2027. And this is entirely plausible. But more importantly too, you can see forest area total getting back up to where it was in 2001. And that's good to prevent the forest dieback. That's good to prevent the tipping point as often has been referred to of being reached. This is Governor Mauro Manjus. We just held a dinner for him in Glasgow and he announced his intention to bring his entire state to carbon neutrality by 2035. There's some pretty solid research behind those numbers. He didn't do it lightly. And here's a little bit of the history of what the state has done. Deforestation plan launched in Copenhagen Climate Summit of 2009. The law that sets up its red REDD framework for the state to basically sell forest carbon credits about nine years ago. And 2015, this very ambitious set of goals for increasing production, increasing forest conservation and including smallholders and indigenous people in the state's development strategy launched in Paris. 2017, indigenous peoples, every one of 41 tribes of indigenous nations of the state spread out across 87 indigenous territories was part of a consultation and they are now getting benefits through carbon finance coming in from Germany and the UK deal that was closed in 2018. And I already mentioned the carbon neutral target. So this is a very inspiring story, right? We have a state that's an agricultural powerhouse and it's already made huge achievements. It wants to complete the journey. There's a price tag that needs about 37 billion to get there, one state. What was announced in Glasgow was about 19 billion over the same period, 2030. So one state could absorb twice the Glasgow commitment on forests. Fortunately, a lot of that funding could come from normal agricultural financial mechanisms. It does deliver a profit. We estimate that forest carbon transactions now that there's a net zero driven increase in the demand for forest carbon credits, jurisdictional credits, meaning comprehensive statewide programs like Montegrosso has, not isolated forest carbon projects that could deliver about 10 billion. And is that enough? That would make a huge difference to Montegrosso succeeding in this journey. The way forward then just to close, there's a huge need for finance. And I tend to look at the net zero movement and I know there's a lot of greenwashing in there, but this is finally the chance that we were hoping would materialize after Copenhagen and didn't. In the Peruvian Amazon, there's a $4.5 billion price tag for the regional governments there to make that journey. We're seeing indigenous people in local communities starting to receive long-awaited benefits and a seat at the table. That's certainly happening in Montegrosso in the state of Acre in the Brazilian Amazon. And that story needs to be better told. There's the need, I think, for a new narrative in the Amazon, where forests are the basis of rainfall security. Rainfall in the Amazon is dependent partially on forest cover. So the culture, the economy, the traditions of the Amazon are tied to the forest in ways that are not broadly understood or appreciated among Amazonians. And then there's the need in the international community, I'd say, to recognize meaningful progress in slowing deforestation and reducing emissions and not let the perfect, such as zero deforestation or zero emissions become the enemy of the good, which is reduced deforestation and reduced emissions. So thank you all for the time and I look forward to the discussion to follow. Terrific, thank you so much, Dan. Lots of questions on my end and the audience. I think what we can do now, hopefully, if he's ready is move into Matt's presentation and then we will have a combined Q&A after that. So Matt, if you can, I think Matt's gonna keep his video off because of his connectivity issues and hopefully he's able to share his materials. Great. Great. Thanks, everyone. Thanks, Dan. As always, it's a pleasure hearing you talk about the Amazon. And thank you everyone again, and apologies for my connectivity issues. So I will probably touch some of the same areas that Dan covered so well. So apologies for that. But I think it's worth saying twice because it's an important issue. So let's go. So I think the first thing to say is we're coming out of a COVID pandemic and it's an incredible jolt to culture and society in the world. And I've always liked this image, this cartoon, which I think throws things into perspective quite nicely. COVID-19 is an enormous jolt somewhere in the region of $29 trillion of lost income or input into the financial system just in the last 18 months to two years. And that is gonna be devolved by the impacts of climate change and again, devolved by the impacts of biodiversity collapse that will follow the climatic situation we're facing in the next 20 to 30 years. So I think we talk about protecting forests. Why protect forests at all? Well, really, they're fundamentally important as Dan mentioned in this global picture. Somewhere between around a quarter of total carbon emissions are absorbed by intact forests globally. So that's forests which remain largely undisturbed by human activities. And somewhere in the region of 30% of our actions in the land use sector can contribute towards meeting our kind of 1.5 degree available targets by 2050. So the work we do in forestry and environmental protection of forests is absolutely fundamentally important to the climate change picture going forwards. I think it's particularly relevant in the tropics because tropical ecosystems in particular will be threatened by some of the trajectories and trends which we're looking at over the next 20 to 30 years. And there are three large gaps if you like which we can look at. So one is fundamentally the need to grow more food. We need somewhere in the region of 50% more crop calories by 2050 and we need to get that food on much less land than we're currently growing the food on. So a new area of land is needed roughly twice the size of India in that period of time. And all of that needs to be done at a much lower cost of the environment. So 11 gigatons of CO2 equivalent emissions need to be reduced in that food system in order for us to maintain our climate targets. So there's a fairly significant challenge at a kind of macro level. And when we look at the commodities which are driving global deforestation particularly in the tropics, the left hand side of this graph which I hope you can all see it really tells a very compelling story about the way in which we need to consider our diet and dietary changes. Beef in particular is a fundamentally important part of the conversation going forward. But you'll see also the other commodities on the left hand side of the graph the rice, sugar and other plant-based fiber those will also become increasingly important over time. So while beef is fundamentally important and palm oil is obviously fundamentally important in that second column there will be other things that are coming through. And just to flick up this graph on demand as well there's some really interesting data coming out now on projected demand increases for different commodities, commodity crops. You can see the palm oil indications there over 200% more palm oil is likely to be needed in the next coming years. And Indonesia in particular have set some fairly ambitious targets for increasing the palm oil production more than double their current production is their anticipated target. So there are going to be some fairly seismic changes to the food systems as we move forward. What does this all mean? When we get down to the ground and we look at conservation but I wanted to just share some very kind of headline overviews of some of the lessons I've certainly picked up from working in Indonesia and other places. You know, I think, you know, I work for, I think you probably say relatively conservative conservation NGO. And for many years conservation has proceeded in relative isolation from the impacts of the wider world. You know, when I started in this field not even that long ago, 20 something years ago conservationists were often in areas which were far from the frontier, far from the forest and agricultural frontier. And that has now shifted very fundamentally. Conservationists are now working directly at the forest and farm frontier. Simply doing work on the inside of protected areas which is important for biodiversity isn't really enough anymore to think about and dealing with these wider pressures. So I think in Indonesia in particular this idea that I was pushing forward quite hard was this idea of it's important to protect the core and monitor biodiversity and hot forest loss. But in and around that core you need to think about market-based solutions to reduce deforestation and reduce conversion pressure. And then in the broader landscape, as dad mentioned, you know, the need to have really interesting and different conversations with governors and the regulatory systems that exist in those places are absolutely fundamental to support a wider sustainable transition. And, you know, as Dan also mentioned there's been an enormous growth in the number of corporate sustainability plans but also jurisdictional sustainability plans and policies that have come out over the last decade. Part of the challenge has been really that many of those are not really seeing the progress they need to see on the ground to make impact. Just to draw out a quick example from Indonesia and this I think probably may have seen this in this New York Times article. So this is a really neat example of some of the problems as a national park in southern Sumatra, which has become a major growing center for robust coffee. And coffee has made its way through the global supply and journey and ended up on many of our breakfast tables around the world. So somewhere in the region of 10% of this UNESCO World Heritage Site is now under active cultivation for coffee. So in this particular landscape and that photo you can see there of the guy on the motorbike is always quite telling for me. The sign in the background says in Indonesian that you're entering a national park and no access is permitted. And behind all you can see pretty much as far as the counter goes is very thriving and healthy coffee plantations in a very little forest in that particular area. So in this example, we said about trying to come up with a different approach, really linking market-based solutions, getting eight to 10 of the largest producers of coffee in this landscape to sign on to a statement of intent to look at sourcing coffee differently with farmers that are committed to zero deforestation principles. And there was a set of incentives and I guess the carrot and stick approach was used quite heavily here. So we worked with farmers to provide them with loans and access to cheap finance, training and incentives with their kind of production practices, post-police improvement, all of these kinds of things and linking that into the supply chain. So the companies who were involved were able to guarantee that they were engaging in a zero deforestation partnership and the farmers were getting better prizes and yield to their coffee. And I think what's telling about this is that it's incredibly hard. This one small area around about half a million hectares of rainforest, it's been under, it's been facing challenges from encroachment for more than 20 years. And I think it's fair to say that in many of these landscapes, it's gonna take at least 20 years to reverse some of the unfortunate trends that have led to deforestation encroachment. So I think kind of having that in mind is important when we look at these sorts of solutions. I think kind of scaling up a little bit to kind of a global level. There's a real mix of challenges behind this sort of tropical deforestation conundrum at the moment, a larger mix of market failures and regulatory failures. So whether it's the kind of market failures I mentioned, sort of farmers not getting enough income and that driving an increased incentive towards encroachment in order to just simply grow enough food that they can sell in order to make a decent living. I said some fundamental market failures around that. And the regulatory failures are increasingly on the front of the center, particularly post-cop and the kind of governance and climate tax books that Dan mentioned is a great example of a step in the right direction there. I think the other thing for me, which really stands out is the need to triage our efforts as conservationists. There are some really good opportunities now to triage our efforts towards the most high risk areas first. Unfortunately, many of the things that have happened in the private sector in the last decade have been happening on areas which perhaps haven't been priorities from bio-westing conservation perspectives that have been happening on degraded land often far from the forest and farm frontier where it's easier and safer and frankly supply chain traceability is a little bit more straightforward. So there's some challenges there. You know, we really need to think about how we engage with small-holder farmers, indigenous peoples at these really important transition points between forests and farms. And that really will need an extension of the horizon of corporate responsibility. At the moment, many companies are simply involved in the act of buying and trading quantities and increasingly there's gonna need to be a step change towards how companies take responsibility and work with the people who are growing the quantities that we use every day. And again, going back to Dan's point about Brazil, I think there's a really poorly articulated narrative around the business case for conservation and protection. You know, this idea of forest as natural infrastructure, this idea of forest as a rainfall generation machine has been, you know, is relatively well understood by science, but it's been fairly poorly articulated both in the public and by the sectors. And I think that needs to change. And, you know, great news about COD and some really interesting and positive examples of financial commitments. But I think one of the things that we're seeing certainly at a site-based level or a project-based level is that those enormous sums of money often don't really trickle down simply because very few products or jurisdictions are able to handle such large sums. And I think Brazil is possibly a, I wouldn't say an exception, but certainly one of the sort of places where that is perhaps less relevant. Matthew Grosser is a great example of that. But in many cases, what we're looking for is sums of money to get ideas off the ground and get things going at the sort of one to $10 million scale. And often the sums of money, the ticket sizes that are being discussed are often in the hundreds to, you know, several hundreds of millions of dollars. And there are very few places where that kind of money can be absorbed. And I'm probably running out of time. So very quickly, I would also say that one size doesn't fit all in terms of our interventions. So in Asia, for example, this map kind of neatly demonstrates the difference between the work in Brazil and the work in Asia. You know, the distribution of field sizes and farms around the world is fundamentally different. So the work that you would do in the Amazon basin with large ranches, large cattle ranches would be very, very different from the work you would do in the Indonesian rainforests or in Papua New Guinea. So again, you know, for example, just in Indonesia, 75% of deforestation outside major concessions has occurred in just a relatively small number of villages. So there's a really different set of dynamics at play in different parts of the world and that needs to be taken into account. I'll just skip one slide there and just 30 seconds on some of these macro level trends and opportunities. You know, I think what we're seeing here is a real shift. There's going to be a real dietary shift and production shift, which is really going to lead us to all the sort of second-wave agricultural revolution. And I think there's some really interesting opportunities there for some innovation and deep thinking. And similarly, you know, I think there's going to be a sort of paired with that. There's going to be a financial revolution, you know, as traditional asset classes become very risky. We need this money will need a home. And at the moment that home isn't entirely clear. So there's going to be some really interesting work around big data and radical transparency around forests and farms, I think, is already making big leaps and change. But, you know, trying to change the way that transactions can be targeted towards good things as opposed to bad things and giving financial sector tools to manage risk, I think they're going to be really, really important. And I guess finally also, I'd say, you know, carbon offsetting and insetting is just going to be such a key part of the next decade of work. And I think it's likely to provide some between 20 and 50% of the finance needed to address some of these challenges on the ground. So I think I'll just, I'll pause there and perhaps go to questions, but I wanted to give a kind of view both from a field level perspective and also potentially sort of give some nice segues into maybe the Q&A. Terrific, thanks very much Matt. And certainly from my perspective, that was really nicely complimentary with the content that Dan provided. So thanks to both of you for this really insightful view of the problem and of opportunities to address it. I think, I'd like to start with, basically with the question to both of you, maybe Matt, you could answer first and then Dan seconds is something that several of the audience members have raised. And it's obviously something very timely. If you could maybe just provide some really high level summary remarks on the outcome from COP26 with respect to the forest declaration and how you see that affecting the trajectory of addressing deforestation. Maybe Matt, if you could. Thanks. Yeah, it's a really important question. I mean, from my perspective, I think that the real shift has been at COP that nature has become our front and center of climate negotiations and a realization of the importance of that has become very evident. For me, the most exciting thing is really almost a change in language, a recognition that Indigenous peoples are fundamentally important to this narrative. I think is new sadly, it shouldn't have been, but it is. And for the first time, we're seeing the financial sector sitting up and taking notice of the material risk this conversation presents and putting money behind some of these pledges. And I think the devil's in the detail. There's a lot of work to be done about how this actually lands. But I think for me, it didn't produce as much as I would have hoped, but there were some really positive signs of progress. And I suspect that we're gonna be having some interesting conversations in the next six months about how to actually make good on many of those pledges. Thank you. And Dan, I know you touched on some of these points in your talk, but if you could kind of summarize your feelings and the outcome from COP26. Yeah, I think this is certainly the most energized COP I've been to. I think I've been to 17 at this point. And so much focus on nature. That was on the leader's day, just the really big outcome. Nature is sort of up front and center finally, as Matt already mentioned. For me, COPs are, there's the negotiations. There's the protests and the outcry from really frustrated people, especially youth. Youth were a huge presence at this COP. And then there's the deal making and negotiation that no one talks about. For me, that third piece was incredibly different this time, with real meetings between government leaders from Brazil especially, and companies and discussion of finance and just a lot of excitement around that. Basically governor saying, wow, so finally we're gonna get that up front finance we need to move this agenda forward. So I feel like it was a very, very big deal what happened in Glasgow on many fronts. All right, thank you. Yeah, I think next what I wanna focus on is sort of the obstacles to scaling the solutions or some of the solutions that you, that both of you highlighted. So maybe Matt, for you, I mean, you talked about the lessons from the work in Indonesia and how complex that particular situation was and how many stakeholders have to be engaged to address deforestation and ostensibly a protected area. What is the biggest obstacle to sort of scaling that approach that you and others took to address it there and applying it to the sort of 3% of these areas that are responsible for 50% of the forest loss? Yeah, I mean, the biggest challenge for me is finance and when I say finance, it's not grant funding for conservation NGOs. It is a recognition of finance that's needed to tackle the market failure of the forest frontier. We shouldn't be in a situation where farmers are producing commodities for essentially almost less than their worth on the global market. There is a fundamental problem if you can buy a cup of coffee cheaper than it costs to reduce and we can't therefore be surprised if farmers are incentivized to continue converting forest in order to make ends meet. So I think there needs to be a real shift in the way that smallholder farmers in particular in some of these areas are financed and that has been a kind of a no-go area for traditional financing, really. It's considered to be too hard, too complicated, difficult to access, farmers don't have the right kind of tools, no credit histories, all these kinds of problems but technology has started to change that and I, for me, if we're able to solve some of these problems around using tech to enable finance to go to the place where it's needed, I think we're going to be able to kind of take some of these ideas to scale. I don't think it applies for all problems and all the challenges, like I as mentioned, I think the challenges around kind of large-scale beef production in Mesoamerica are very, very different but certainly from the perspective of some of these really important intact forest areas, 70 to 80% of the global food supply comes from smallholders and so far they've really not been part of this conversation. So I think it's really important for me to think about finance in that context. And Dan, you presented a sort of optimistic viewpoint of what's possible certainly in Montagrosso and then maybe more broadly in Brazil, you mentioned that an obstacle in terms of just the amount of resources committed to this but is that just the biggest issue or is it really more around being able to distribute the funds effectively in order to implement that program? Yeah, I think for me, the Tropical Forest agenda is largely about rural development and which has always featured building institutions and democratic institutions that can defend the public good and can we build a case in the international community so that those places where progress is being made and bringing more transparency to the way public funds are used to recognizing the rights of indigenous people, for example, making as Matt referred to making smallholder farmers who are producing commodities more investable their ventures, all of that gets really gets to building this institutional capacity and that's not a very fast process and where it's happening, I think we need to get behind it and make sure it advances where it's not happening fast enough, make sure that we're on the ground providing that support and those incentives. I asked the governor model managers over dinner, did his carbon neutral 2035 announcement cost him votes or win him votes? And he said, it won me votes but had I said zero deforestation it would not have won me votes. And I think those perspectives are really important. What is the case for these local governments and other stakeholders to really take on the forest agenda and to feature forests and their conservation in the development paradigm that's adopted? And related to that, I mean, the vote for you didn't, oh, sorry, yeah, Matt, did you want to jump in? Yeah, I mean, I think that's really, really interesting point. And this point around, what are the narratives that politicians and particularly governors of some of these states need in order to kind of push forward these sustainable transition agendas? At the moment, one of the things that's really interesting is we're seeing COVID-19 as being another. Finally, there's connection between health and environment has become front and center. And people are realizing that there are economic costs and economic opportunities to investing in natural infrastructure, investing in nature-based solutions. And I think that's fundamentally important mindset shift, which I think will help us get to where we need to be. But as Dan said, it's not a quick process. Are there concerns around, if there's compensation to not clear forest and that succeeds, are there concerns about the sort of long-term sustainability of that solution? In other words, if you pay somebody not to clear a forest this year, what sort of guarantees or mechanisms are in place to ensure that it doesn't get cleared in the future? Maybe really for both of you, but maybe Dan, if you wanna start. Yeah, I think the forest carbon finance, it's gonna be a phase. And I think it's, excuse me, a stepping stone to get to robust rural development policies that are delivering a lot of benefits to that region and where people say, oh, forests are one reason we're accessing markets better. Forests are one reason we have more secure water supplies where we're not getting flooded, where we're not dealing with smoke in our lungs, three months out of the year during the dry season. I think it's a transition. And I think carbon finance is not gonna be here for 50 years. It's gonna be built into the public policies and programs that are themselves as seen as benefiting that particular rural society. So, I think we have a great opportunity now over the next 10 years to use that to deliver finance at scale. And in the process, get some companies involved to come into agreements with these, get photo ops, but also more importantly, mobilize some of that corporate muscle in terms of delivering technical assistance, delivering credit lines, delivering jobs through setting up processing plants and refining plants in the regions that they wanna bet on. Thanks. And Matt, I don't know if you wanted to comment anymore on that topic. I think it's hard to add to that, to be honest. I think Matt sums up my views too. Okay. Yeah, no, go for another question. Yeah. So, Matt, you alluded to new technologies in terms of innovations and financial transactions. Is that the main technological gap or the main technology on a wish list of things that would help implement these solutions or are there other sort of technology areas that would really be game changers in your view in terms of addressing this problem? I think the opportunities for technology at the moment are boundless in the environment sector. I think what we're seeing increasingly is people who are recognizing that the applications from different industries can be readily applied to kind of the challenges faced by conservation. And I think that's really exciting. So the more people we have from the blockchain world who are engaging in environmental challenges around supply chains, the better. Because I think that will ultimately result in some of the interesting outcomes, for example. I think the idea of the work that's going on around big data, and we've seen over the last decades some fascinating tools emerge. You know, somebody may be aware of a tool called Global Forest Watch, which I think is fascinating. There's an equivalent for oceans now. I think we're heading towards probably an equivalent for smallholder farmers and farmers. You know, there are tools now which can track crop yields and harvest potential via drone. You know, I think there are some incredibly powerful technologies out there and yet more to come. I think finance is just one kind of part of that sort of technology bubble. So yeah, I think there's, you know, I sometimes wish that every time I went on a field trip I had someone who understood how to write an app or someone who understood how to design a kind of a blockchain solution because it would be a real game changer to some of the conversations we have with field teams if we had different mindsets engaged in that conversation. Terrific, thank you. And Dan, if there's other technology areas you wanna highlight? I would just touch on one other area that I think is really exciting where the state of Montecrosso has all of this planet data, high resolution satellite data and they're now making it so that within hours of a deforestation event they know where it took place, whose tax number is on that property, who is the nearest enforcement agent who can go to that place or do they need a helicopter? And it's all being carried on a smartphone by those enforcement agents. So it's really making it possible to catch people in the act. And of course you need the other side, right? You need all of the innovation and where technology makes it cool for youth to be part of environmental agendas even if it means living far from cities and not being able to see your friends every day. But anyway, I agree that it's a huge, huge piece of the solution. Yeah, and maybe I'll bring up one other area in light of some of the data, some of the projections, Matt, that you showed about increased demand for palm oil and other crops, you know, and also just a large increase in food demand. So I'd be interested in hearing both of your thoughts on what are the prospects for technologies that create, you know, beef alternatives or soy or palm alternatives? What are the prospects of those really affecting the deforestation problem on a time scale that's relevant for avoiding some sort of tipping point? So, yeah, Dan or Matt? Yeah, I guess I would, you know, I think sometimes I worry that we've overstated the importance of international markets for deforestation, you know, you look at beef in Brazil, it's 80%, it's consumed in local or regional markets, it doesn't get exported. And I worry if sometimes we come down hard in the international piece of that and that's gonna let the operators who are serving local markets really have free reign and control the beef industry and they was a very little reason to worry about deforestation. But what gives me hope is seeing the pace at which the efficiency and productivity gains are rising. You know, that's a big part of why deforestation was able to come down in Brazil, even though food production was increasing and it's mostly in the cattle and soy is already extremely productive. Soy in the Amazon is out producing, you know, grain belt American soy producers and I think this greater efficiency of agriculture it's something that does not get enough attention but the Minister of Agriculture, Minister of Environment actually had an op-ed out on that right before the COP and calling attention to the fact that Brazil used to be a food importing country and now it's one of the top three exporters of food and that gets down to agricultural innovation to as Matt was saying, you know, getting more from less land with less of an environmental impact. Thank you. Matt, do you wanna follow up on that? Yeah, I mean, the issue of increased efficiency in food production is fundamental. And some of that is about avoiding things which are inefficient and some of that is about increasing the efficiency of things that we already have. So I think, you know, there really isn't an argument to be made anymore for eating beef, you know, if we look at the complexity of the conversation that we're having now around kind of technologies which don't yet exist in order to scrub carbon for the atmosphere and yet we know that we have the cattle industry which is, you know, one of the largest single driver of forest loss globally. You know, it's very difficult to kind of stand on the iceberg and still make a case reading hamburgers when impossible burgers have done something which is really rather good. So I think that's a key part of it. And as Dan said, I think the sort of efficiency piece and perhaps as well as the connection to technology is the food technology is the possibilities that exist for improving efficiency in food production in many of these commodities is still rather large. And I think that's exciting. So, and should be a focus of a lot of our attention going forward. I mean, you know, other than saving nature, the next thing you can do for emissions reductions is to improve the efficiency of how we produce our food. So I think that's, you know, that pretty much says it all. Thank you. I wonder if I can take a question directly from the audience. So Eric Plambak is a professor here at Stanford from the Graduate School of Business. Erica, do you want to ask a question directly? I had one follow-up question. Daniel said that now it's almost possible to catch people in the act in a matter of hours when the fire occurs in a specific place. I wonder if it's necessarily necessary to catch people in the act. If we know that before a fire has happened within the last months, if the incentives can be put in place to prevent that land from being developed for agricultural purposes. Maybe that would work better in Indonesia where there's a substantial capital investment if it's going to be palm and it takes a long time versus cattle ranching. But how do you create incentives to ensure that if someone starts to develop the land for agricultural purposes that they're prevented from doing so that the forest could come back so they wouldn't have an incentive to burn it in the first place. There's actually this thing I refer to the car, the rural environmental registry. There's about a million applications in the Amazon region, five million across Brazil. Once your car is approved and in the system, if you deforest illegally, you're cut off, you're embargoed, your property. If anyone buys your product, they have to pay 500 Reis per kilo of product at their bike, really hard to collect. There are now about 1500 embargoed properties in the state of Mato Grosso. It works. I mean, these landowners are doing whatever they can to get off the embargo list. So I think there are easier ways than going out and catching the infractors in the act. And they get to good land use planning and really translating what the law says into practice through an instrument like the car. That's not there yet. Just the validation process is going super slow, but the potential is there. That's really exciting. And then for Indonesia, what is the potential to bring that along? And how would that relate to what's happening with the new traceability regulations that are coming out in the EU? Will that support? Yeah, okay. I think the challenge in Indonesia is that the kind of Brazil car doesn't exist. And I think that's a great model that can be replicated. And sadly, in most of the provinces and jurisdictions, the governance doesn't exist either. So there are some real challenges there with, even if you had an alert system, there would be no land that alert. So I think there are some kind of more systemic kind of challenges in the Indonesian context, which need to be solved first. I think one of the things that's great in Indonesia is an example as they're going through a process called OneMap, where they're trying to align the different mapping, the mapping systems of different ministries. So previously, the agriculture ministry had a set of maps. The mining ministry had a set of maps. The finance ministry had a set of maps. And I think one of the things which is a really great step forward for a country like Indonesia is really looking at those maps and trying to have a unified baseline on what you're all working. I think that's the first step towards getting towards the kind of thing that Brazil have managed to do with the car. Thank you. So one last area I want to touch on. So you've talked about the private sector, really taking the lead and perhaps taking the lead in financing some of these mechanisms to protect forests. So I mean, there certainly are a lot of very prominent companies with huge carbon footprints that have announced intentions to be carbon neutral at some point in the future. And they have a huge amount of emissions that, for example, things associated with air transport or heavy shipping that are just not feasible to decarbonize with other technology anytime soon. And so if they really are willing to pay for offsets, what is the roadblock to engaging some of these, I mean, the numbers you put up in the tens of billions are certainly substantial, but not out of the question for some of the Microsofts or the Amazons or even large airlines who have these huge emissions that frankly there aren't good ways of offsetting otherwise. What's the disconnect between engaging them and accessing that capital and deploying it towards some of these mechanisms? You know, one of the problems is that the sort of jurisdictional state level, province level programs where you have a comprehensive program where all of the key stakeholders are at the table and saying what they want to get out of the program, we still do not have a market for those credits. So none of those credits are available. There's lots of buyers and we're getting close. You know, there's our trees, which is one standard for jurisdictional red. There's jurisdictional nested red of Avera and the tropical forest standard of California, which is still not regulated, doesn't have a really an architecture behind it. So I feel like we're really at the threshold of a very new phase of forest carbon transactions and scaling up, that's really exciting. I think a lot of the subnational jurisdictions and national governments, they still don't quite believe it. They want to see, you know, money flow and they've been working with pretty slow flows of money from Norway, Germany, UK and others. And that's played an important role, but it's more like overseas development assistance pretty slow. So I think this next phase could see a lot more efficiency of volumes, you know, the corporate relationships with governments and other stakeholders that could really move the needle on this. So hopefully in a year, we'll be able to celebrate some new deals around this. Thank you. Matt, I don't know if you have an additional perspective on that particular issue. I mean, I school all of that. I think there's a trust deficit, you know, I think for many tropical forest nations, we've been here before, you know, there were promises made around red plants and carbon a decade ago, which never came to fruition. And a lot of people were quite bent in that process and many countries have still on a journey back towards trusting that this is real. And I think that is something which needs to be taken into account in the way in which we approach this conversation and you see that. You see that in the conversations which have happened and still happening at the COP, you know, even in Glasgow where the conversation still being had around. As Dan said, you know, people can't quite believe that this is actually likely to happen now, you know, that there's a methodology in place in the rule book is pretty much there, but there's still a lot of distrust that this will happen and this will happen at scale. I think that needs to be figured out. Great, well, I want to close on an optimistic note. So I guess I'll give you each, you know, one opportunity to close by saying what the opportunity for you personally in this space, what's the most exciting opportunity looking after the next year or two? Either the project or the change you see coming that you're most excited about. Maybe Matt, if you could start. So the thing I'm most excited about, I think is that I feel like we have all of the tools of our disposal now. You know, the science is as clear as we've ever had it. The, at least the edges of the finance world behind us, developing countries are largely turning up to kind of get engaged in this problem in a way they haven't done before. We have an alignment of narratives around the importance of forest for health, the importance of forest for the economy, the importance of forest for the wider world. And I think, you know, I'm coming out of COP, I'm extremely excited to see that the world has come together in this way and I, yeah, and I think that's my kind of note of optimism for the next 12 months. I really do feel like we're at a kind of tipping point. You know, I think the next decade really will be about, we'll give our action. And I think it's an exciting time to be having this conversation. Thank you. I'm really struck by a fact that is not talked about much, which is that half of all the carbon pollution put into the atmosphere by humanity is dealt with by nature today, about 30% on the land and about 2025 by oceans. These natural climate sinks are huge, they're fragile, they're not infinite. And I think rallying around that fact though, it's been sort of moving from the high elevation of nature in the opening of Glasgow. It's a chance to bring sort of the different factions of nature together. Soil carbon is the basis of soil fertility and water management and food security, frankly, right? There's the biodiversity crisis, there's the climate dimension, there's flood control, there's seagrass beds and their roles in corals and mangroves and it just feels to me like we have a real opportunity here to bring these different interests in nature and its role in a sustainable world together and to therefore build up a much bigger constituency advancing it. Fantastic. Well, I'm certain I speak for a lot of us who have listened to you this evening to say that this has really been inspiring, it's really been insightful. And thank you for sharing some of your work with us for this last hour and a half or so. I wanna encourage any of the audience members now or anybody who watches this subsequently to connect on the Tomcat LinkedIn Networking Hub. That's one way to connect with us and with Dan and Matt, we can either put you in touch directly or indirectly. Those of you who are contemplating solutions for the Tomcat solutions program and who would like to engage Dan or Matt in their expertise in helping you develop your ideas, please also reach out to us so we can help connect you with both of them. So thank you again for your insights tonight. Matt, thank you so much for joining us and interrupting your sleep cycle. And thanks everyone for being here.