 Good afternoon. Welcome to the SJ Hall Lecture in Industrial Forestry. I'm Keith Gillis, Professor Emeritus of Forest Economics for Berndine of the Rouser College of Natural Resources, and I am pleased to be here with you all this afternoon, and I join you in looking forward to this evening's program on carbon market contributions to timberland returns. Before we introduce our panelists, I'd like to take an opportunity to tell you just a bit about the lectureship's namesake and his lasting legacy here at UC Berkeley. Sherwin J. Hall was a graduate of our forestry program, earning his bachelor's in 1920. After graduation, his career took him to the east coast, then to the south, where he played a major role in development of industrial forestry. In 1948, he returned to the west coast, where he quickly emerged as a leader in industrial sustainable management of young growth redwood. Upon his death in 1968, his widow, Mrs. Desi Hall, established both the SJ Hall Lecture Ship and Industrial Forestry, and the SJ Hall Chair in Forest Economics. Matthew Potts, who's the current SJ Hall Distinguished Professor, is attending this evening. I'm a former holder of that chair. SJ Hall felt strongly that economic understanding is basic to effective forestry into a strong nation, and in keeping with that sentiment today, we continue to hold this annual lecture in his honor. Joining us for this evening's event will be moderator Dr. Clark Binkley. Binkley has been involved in forestry investments on nearly every continent in the world, and with climate change maybe he'll get for the series. His experience has included academic positions at Yale University and the University of British Columbia, corporate positions with Hancock Natural Resource Management Group, International Forestry Investment Advisers, a firm he founded, and Greenwood Resources, the timberland investment arm of TIAA-CREF, Newvin Asset Management. He's also acted as a consultant to numerous forest products companies, government agencies, and conservation groups. He's a prolific author in the field of forest economics and holds degrees in applied mathematics and engineering from Harvard and in forestry and environmental studies from Yale. Joining Dr. Binkley this evening are panelists Elizabeth Willmott, the Carbon Program Director at Microsoft, Dick Kempa, Vice President of Conservation at MoBus Woodlands Group, and Christine Paulette Young, Director of the greenhouse gas verification program at SCS Global. There will be time for audience questions at the end of the program. If you have questions, please type them into the YouTube chat function. And finally, before we begin this evening's program, I'd like to recognize that although we are all attending this lecture in different places, we here in Berkeley are all on unceded native lands here occupying the traditional and unceded territory of the Cochenyo-Alone people. Thank you for joining us this evening and with that I turn it over to Dr. Clark Binkley. Thank you very much for that kind introduction. I'm Clark Binkley, your moderator today, and I'd also like to thank the College at Berkeley and the S.J. Hall Lectureship for organizing what I think will be a most interesting panel on how can carbon markets contribute to timberland returns. The format is three short presentations by our distinguished panelists and then some questions. And we invite the audience to pose questions because that's almost probably going to be a very interesting aspect of this hour today. So I'd like to introduce the panelists and we'll first have the buyers tell us what they think about carbon markets, particularly with respect to forest, and then have the sellers say what they're selling, and then the market mediators talk about how do you get the sellers and the buyers together in a better way. So representing the buyers is Elizabeth Wilmot, as Keith said, the carbon program director at Microsoft. Liz leads the carbon program for Microsoft, including the company's carbon fee and commitment to carbon removal as well. She joined Microsoft in 2016 after a decade of working in urban sustainability and climate action in both the public and nonprofit sectors. She's a book, a World Bank guide for cities on how to prepare for climate change impacts. She holds a double major in biology and Chinese language, something that would be quite useful these days of the pandemic I think, from Williams College and a master's degree in public policy from the Harvard Kennedy School. I'd like to note here that Microsoft has posted a couple of very interesting white papers on this subject and I commend all of you to read them. So Liz will start off. Our second speaker representing sellers is Dick Kemka, who's a vice president of conservation at Maltis Woodlands Group. Maltis Woodlands Group is a large Timberland Investment Management Organization. Dick joined Maltis in 2017 and has over 25 years of experience in sustainability, carbon, timberland, grasslands, wetlands, mitigation, acquisitions, and sales. He was formerly the chief commercial officer for the Climate Trust and the vice president of Environment for Equator and then ecological asset program lead product unlimited. He received a BS in geography and remote sensing from Carroll College in Wisconsin and his master's degree in geography and remote sensing from Indiana State University. And then our third panelist representing what is a very tough position in between buyers and sellers is Christy Pollitt-Young, who's the director of greenhouse gas verification programs at SCS Global. The program that she leads has verified over 290 million tons of CO2 equivalent around the globe. She has 25 years of experience in forestry and carbon offset verification in both tropical and temperate climates. Christy previously worked for the Smithsonian Tropical Research Institute's Center for Tropical Forest Science and at the Nature Conservancy in Peru. She holds a master's of forest science from Yale and a bachelor of science from this distinguished institution who's hosting our meeting today, UC Berkeley. She's the lead auditor with SCS and has participated in the verification of over 50 forest carbon offset projects around the globe. Well with that introduction I'll turn this over to our first panelist Liz Momont. Liz? Wonderful thank you so much Clark. It's a pleasure to be with all of you today and I know some friends are in the audience so I look forward to perhaps mentioning some of the work that we've done with Berkeley as I as I talk about a bit about what we do at Microsoft. So why you might ask why why does Microsoft get so invest is why is Microsoft so invested in climate action? Well it's a pretty straightforward answer for us. We know first of all we're humans living on the planet. We know that the natural world and the global political world are telling us we're out of balance. We know that the atmospheric ledger and the laws of science are equally important and more important than our corporate ledgers and that nature has a long memory and and we took all of this into account in January 2020 when we first set our carbon negative commitment which is a commitment to cut our greenhouse gas emissions across our value chain by over half by 2030. Remove the rest and then remove the equivalent of our historical emissions and this was based on strong direction from our executives to really take responsibility for for what we've what we've done in the past the emissions we've made in the past and for a real sense a greater sense that those who can afford to do more should and so after a year of uh implementing this program a year plus of implementing this program and a year of intense climate impacts that we've seen not only in the west coast of the United States but also around the world through forest fires and flooding we're moving into the new political season of COP26 the conference of the parties with a deeper commitment to climate action than ever and we're driven really as a data company and a science company fundamentally by what climate science tells us is needed to avoid catastrophic climate change. Indeed we're all already seeing these climate impacts happening we're on a dangerous path but we are still taking up that mantle and really driving with everything that we do across the company to help not only ourselves but also our customers and our stakeholders drive to global net zero. We approach that in three ways we like to alliterate so we say meaning measurement and markets and in terms of meaning when we say net zero people mean different things and entities mean different things there's a lot of confusion out there in the world today about what is carbon neutral what is net zero and so fundamentally for us we feel that there is a a need to be again to be guided by climate science not only saying that that an entity would be net zero simply by purchasing carbon offsets but indeed that we have to think about what is truly global net zero and that's why as part of our carbon negative commitment we actually committed to remove greenhouse gas emissions from the atmosphere. We are among the first companies to do so and we did that as a measure of a need to really square the carbon math or the climate math knowing that the atmosphere doesn't care as much about avoided emissions yes truly avoided emissions are important but cares more about what's actually being removed from the atmosphere and so for us that's been a crucial a crucial piece in terms of measurement we've also seen a real need across the board for clear arithmetic clear carbon math of how we track progress to global net zero clear carbon accounting for carbon removal this is a crucial issue in the forestry sector because when we first sourced our our first year of carbon removal credits we saw vast divergence and vast confusion around what's an avoided emissions credit what's in a removal credit and i'd be glad to get into some of that in our in our Q&A but really fundamentally we see a really significant need to have more straightforward carbon accounting and then finally we we have really embraced a new mission and a new responsibility on our team for helping to develop the market for carbon removal and that fundamentally is about the supply of solutions that company companies like ourselves can can purchase or can embrace to apply to our carbon footprint so typically that has taken the shape of historically that has taken the shape of carbon offsets but again we're really focused on carbon removal credits a form of offset to be clear that that are fundamentally about pulling carbon from the atmosphere so we issued an RFP a request for proposals last year that was the first of its kind that resulted in the largest purchase of carbon removal in the history of the world which was over one million tons and we have subsequently also invested a hundred million dollars in the breakthrough energy breakthrough energy groups initiative catalyst which is a group that will invest in crucial technologies to drive to net zero including not only direct air capture but also other technologies such as sustainable aviation fuel and green hydrogen but fundamentally for us we know that nature-based solutions such as forestry are essential to help it's not just about looking to the future for for new technologies but also about looking to today for the short-term climate benefit that forestry and soil carbon solutions represent and so for us it's really about how do we measure the true value of those of those net nature-based solutions we've seen a lot of variation in quality in the request for proposals and the sourcing that we've done we see a really clear need for for stronger standards around forest carbon removal and we've been really lucky to work with a number of different fantastic researchers from Berkeley under the auspices of carbon direct those include Matt Potts, Barbara Haya, Bodhi Kambio and Dan Sanchez and maybe some of them are on the line today I think that what we're seeing with the formation of groups like that and the real unleashing of carbon removal interest is indeed a nascent but super super promising market and so for us it's really in the context of forestry it's really about looking at these existing nature-based solutions the the original technology of photosynthesis to pull carbon out of the atmosphere carbon dioxide out of the atmosphere and to do so in a way that's really really high quality and so as we dive into our discussion today I'd be glad to I'm looking forward to a rich discussion about both the buyers and the sellers perspective on this topic and I'm just appreciative that we're having this serious conversation today thank you. Thanks Liz for those thoughtful comments and it raised a couple of questions in my mind but I'll save them until we finish the rest of the panelists our next panelist is Dick Kempke from MOLPUS representing the seller side of the market. Dick. Thank you Clark and thank you also to the College of Natural Resources for the invite to attend this workshop I really appreciate it and so I'm going to if you move down to the fourth slide I'm going to skip some of the background I put a lot of slides in here so after the call if anyone wants to look through this they can but I'm going to just start off and give you a little bit of background on MOLPUS Woodlands group well as Clark mentioned MOLPUS Woodlands group is a Timo and we've been we started as a we're one of the oldest forestry companies in the United States we were started in 1905 as a mercantile exchange changed into a lumber company and ultimately in mid 1990s changed into a Timo which is a timber investment management organization so the key word there is that we manage timber on behalf of our investors our investors our pension funds retirement funds teachers unions and alike and so we have two kinds of funds we have co-mingled funds that are 300 to 500 million in size and they have a limited term of 10 to 15 years so we don't hold the land forever which is an important point we have five co-mingled funds we have nine separate managed accounts separate managed accounts our individual investors with over 100 million dollars that are invested into timberland and those funds those funds can be perpetual or they can last 10 or 15 years it just depends how long the client wants to be in the sector and what kind of returns we're getting for them so if you move to the next slide my job is to handle everything in the company that's non-timber related so we're in business to make money on timber and I'm I'm the value-added guy so I do all of our carbon projects mitigation banks and things that conservation easements solar and wind and things of that nature so we're a fully vertically integrated company which means that we have 115 employees that are biometricians GIS specialist financial people and not just a few people sitting in on the east coast and subcontracting everything out we have over one this map shows the red dots show where our land is the all the green is the are all the different wood baskets in the united states we have about 1.8 million acres under management now with a total asset value of over two million two billion dollars so if you move to the next slide I think Liz and and Clark kind of already covered this so I'm not going to spend a lot of time on it but we believe that sustainably managed forests are the key to reducing carbon emissions in the future and that through that whole growth cycle of capture and co2 harvesting timbers storing carbon in long-term wood products and replanting or reductions are going to be the key to the future for climate so if you go to the next slide um we have by the way a mulpus is sustainably certified under SFI for all of our properties and we're dual certified in some of our properties with FSC and we're also a signatory to the UN principles for responsible investing and so as I mentioned the natural climate solutions or nature-based solutions that is conservation restoration and improved land management can be a big part of the solution and there was a paper recently released in the proceedings of National National Academy of Sciences by TNC and 10 or 12 other groups saying that could be up to a third of emissions reductions could come from this from these forestry grassland and wetland projects by the year 2030 to keep us below that important 1.5 or 2 Celsius degree change that we're all trying to avoid and so I think Christy's going to cover this so I'm not going to spend a lot of time on it but there's got to be common units and accounting for these type of projects otherwise they're no good so there's a common unit called a one ton of metric ton of carbon dioxide equivalent or one ton there's two kinds of markets there's a cap and trade a regulated market there's voluntary markets each of these exist for different purposes one is to keep emissions under a cap in california for instance and the other voluntary market is for those who who have want to reduce their emissions through shareholder pressure and and net zero commitments and these registries provide carbon accounting that's been very well vetted such as the bottom icons the verified carbon standard climate action reserve and American carbon registry all have spent a lot of time publicly vetting and going through scientific assessment of what counts as an emission reduction and what doesn't so I just wanted to point out without these carbon accounting protocols there would not be there would not be good carbon crediting projects next slide so this is the this is my last slide but I wanted to spend some time on it this shows the environmental projects that mulpus has done we've got one of the key things for us is publicly accessible sites where people can recreate and hike and and enjoy nature and we've got six almost 690 000 acres of that in the blue in the blue dots throughout the United States we have almost 420 000 acres of conservation easements throughout our properties throughout the United States those are the green the green dots and one of our biggest growing areas is in solar and wind we've done 20 different solar projects over the last two years we've got some wind leases in the north that are represented on this map but i want to talk about the carbon projects that we've done we've done over 20 carbon projects both voluntary and compliance covering over a million acres and we've generated almost nearly 7 million tons of carbon credits with a with a revenue value of almost 78 million dollars and so what i wanted to do is talk about one of those projects in the north if you see minnesota the red dot up there is what we call a merry weather land in timber this is we're the largest private landowner in minnesota we have about 300 000 acres there and we started a carbon project there about um three years ago on about half of the property after some analysis we picked about half of the property to do the property on and i'm going to step you through the steps we have to go to get these credits issues is sold so we have an inventory that we do on that property that we did in 2018 that's a full blown timber inventory similar to a timber inventory except it measures commercial and non-commercial trees down to two inches in diameter then we capture that information we go through a whole carbon baseline modeling exercise to determine the volume we have to consult with our advisory boards for our funds to see if they want to participate in this we submit the project to the registry the registry has once we get the um verification report we have to submit that project to the registry the registry has to approve it it then goes on to the air resources board this is a compliance project in california the air resources board must approve it that takes quite a bit of time and as of december of last year this project was awarded over three million tons of carbon credits and that's one of the largest non-native land projects in in the united states and so over the course of the next six months we forward sold and spot traded nearly that full volume of credits that we had for the project and then each year after that we we can we can sell we can get carbon credits for whatever um annual biological growth is not harvested can be verified and and produce credits as well so now we're into the next reporting periods on this project so that whole process took about three years and it cost several hundred thousand dollars to set up the project but the revenue we got from it was north of 35 million dollars so it was a very large project and and very worthwhile um just one other project i wanted to mention and the and the kentucky uh tennessee a border is a project called attaya it was a very similar project very large it was in an ecologically significant area that the nature conservancy was interested in um it it was 100 000 acres and about 80 000 were put into the compliance program in california the same steps were done on all those i'm not going to go through all those it produced about three million tons as well very large project and the key thing about this project is it we did not sell the credits we actually the nature conservancy was interested in purchasing the property and so we sold them the project property with the credits issued and so they now have that property and they put it into their nature vest program as part of their cumberland gap conservation program so the the the end result was the project ended up with a conservation organization so our idea um is to generate revenue and address environmental social governance issues for our clients and that's why we got involved in these projects and i'll end it there claire thanks so much to really interesting to see the kind of practical nuts and bolts about how you actually do a project and create credits that you can sell this to someone it'll be interesting to have a conversation later on uh with uh with liz about the nature of the credits and how that works from her perspective as well so our third and final speaker is christie poly young who's going to talk to us as the the person who's in the middle here who has to actually verify the credits and and let the the buyers know that they're they're really something worth worth uh worth purchasing so i'll turn this over to you christie thanks thank you so much park i'm really happy to be here um it's homecoming weekend i'm a cow bear and it's my 25th actually so i'm also happy to say that um my esbm degree so environmental science policy management is in use this is a very interdisciplinary um venture doing carbon offset projects we work internationally as well as domestically so lots of hats to be worn next slide please and so you can click one more time please rachel just you know so you know who we are scs global services we work on environmental claims for an auditing company and standards of elements we look at all types of sustainability you probably know us from our store or stewardship stewardship council certification you do other things like organic and recycled content next slide next slide uh oh okay and just um the vision of scs for mission based is we'd like to remake the world and then the vision of the un sustainable development goals so here they are next slide that's fine um so why offsets i'm sure these are familiar to a lot of you it's one tool one of many tools to fight climate change through decarbonization there is no silver bullet there is no panacea offsets are one way to do it um i actually hope it's in an intermediary step because it'd be really wonderful if we start our efforts um to have payment for ecosystem services internalizing costs to nature and biodiversity and the way we do business and maybe this could be a part of a circular economy if we kind of move towards that we think i think offsets are component and catalyst for that it's also a way for companies to demonstrate corporate social responsibility we've seen that it's important for recruiting and retention of um and great employees especially with this younger generation which i'm happy about and also to support carbon neutrality goals innovation and transformation next slide please so here's some folks that are actually doing sustainability plans below list thank you microsoft next slide and just here's a very simple example of a sustainability plan and i'd like to just break down that it's reducing emissions through policy changes technology and already efficiency doing what you can to really slower your footprint collecting or reporting your footprint knowing what it is and then doing offsets to become carbon neutral negative it's not just doing what you're already doing and buying some offsets it's doing as much as you can realizing i can't do any more and then doing offsets next slide okay there is an example of some of the projects that SES has verified in the U.S. so the green or improved forest management the blue is a forestation reforestation yellow is grassland and purple and pink are ozone impeding substances and landfills and then if you moved it's on our website if you moved there's a lot of red projects as well so we verified over 290 million times of carbon offsets carbon equivalent next slide a sample of some of our domestic clients you can see that there's industrial forestry non-profits tmos the utility there they have a municipality from county in washington dnr michigan next slide here's some of the standards that we work with as dick mentioned there is the cabin tree program in california as well as voluntary standards next slide okay why do we need verification what is the point of all this so it's really simple we need independents so that buyers and sellers and i like to think of my mom a very smart person but doesn't have a phd in biometrics more remote sensing to know that there is quality that this thing is she can just buy your credits feel good about our offsets so we're independent people to say that this offset has marketing integrity as durability again quality and then for the lawyers right we want them to sleep well at night reducing risk so social media risk reputational risk legal risk financial all these things to say that this project followed the rules sound forestry sound biometrics sound menstruation all these things that these credits are something that we can stand by next slide okay so just a little bit of sbs kind of mentioned like these things world leaders and one of the things that sets us apart is that we are accredited under the international standards organization so we follow a simple set of simple a set of rules for quality management systems competence um all the quantitative aspects and we've done this in a streamlined fashion to evaluate projects around the world you've seen the good bad and the ugly and this has been really helpful to understand some of the pitfalls in carbon accounting or remote sensing and none of our verifications have been overturned next slide so just really quickly here's the process there's five more minutes so essentially we put people like dick through the ringer and we have a kickoff meeting to talk about what's happening look at documents we'll do a desk review site visit well for each of these steps we'll say if we need more information if a project is not in performance with a requirement or basic statistics we'll write a report we'll do a technical review with someone who has been outside of the process reviews everything to make sure it makes sense it's sound and then submit it to the registry so Rachel I'm going to zip through these next slide please so here's the desk review there could be a public comment period we green light the site visit once we found somebody not measuring trees at um dvh they're measuring at the root caller we did not go and we also look at safety and access seasonal conditions next step next slide site visit we'll look at the audit plan interview folks and look at geospatial information such as ownership and boundaries, gain and management, growth and yield modeling, different allometric calculations of biomass next slide and then this is a fun part we go on site do the crews we'll measure trees we'll do a t-task to make sure that our inventories are matching enough and we'll also do boundary and ownership checks so what are people doing next slide okay here's it's fine that was the t-test spreadsheet so again we'll just let people know if they have any issues that need to be resolved we'll do checks on environmental health and safety and we'll also let people know you know if what needs to be resolved this is the data analysis section baseline quantification review of financial and legal fields usability looking at harvested wood products everyone's favorite the buffer pool so in case there are intentional or unintentional risks so right now we're in fire season in california it grew by a month this year so people always want to know about buffer pool and though that there is a contribution for that to make sure that there is something to guard against these unintentional reversals but if you do true treatments such as you know thinning or field breaks to reduce fire risk management chain field breaks you can reduce your contribution to the buffer pool next slide please keep going issuing the reports lots of documentation lots of workflows next slide okay technical review again so where the independent person comes in to make sure that the udder did everything well slide registry review more checking so much checking by different people next slide okay lessons learned what did we learn from this you are uh your dick i would tell him and i think he's he's gone through this before and i think he knows this to develop a rigorous new inventory designed for carbon not for production forestry you cannot just measure worshipable trees 10 inches in diameter or greater so we're looking so that's been a new thing and information the actual product is the inventory so we want to make sure that that's really done to a high level precision working with experienced project developers and technical staff people that actually can run both the new models people that do these analyses they feel really good with geospatial information interpretation providing complete documentation with evidence so lots of maps lots of you know scaling reports management plans anything to show us that you've done everything correctly community buying is important especially international projects and then just just above all everything road quality people we want folks to focus on quality integrity the system must work um this must work the system in the market needs to continue sorry there's a typo next slide okay what is the future of offsets so definitely government and corporate leadership as we're seeing for Liz um as well as scaling with quality we want to scale but how do we scale with quality so there is definitely technology lots of cool technological advances in remote sensing or data collection but also the green technology like trees and just keeping everything simple and understanding the basics of forestry and doing that well um as well as you know fundamentals like understanding how to select the right estimators for you know statistics when you're doing these projects as well as I think is extremely important while speaking to a forestry school is training a new cadre as specialists like we need to scale up we need a lot of offsets we really need to reduce our emissions around the world and we need folks to not only develop these projects many people that to also to verify them and to also know how to buy them we just need to raise a new group of folks that can actually have them skillset to do these things so I you know I would love to hire folks from Berkeley and Yale my alma mater is other folks but they don't always have the right skillsets there's a lack of um knowledge in remote sensing as well as growth in yield modeling allometry other aspects that are really important to this um role another is you know focusing on impact and then improvement we don't have all the answers now we need to identify issues in terms of the data the science or kind of different areas with with challenges and then go from there and have more science directed at it because we can't I think there's a lot of detractors out there that would say that there's issues so let's just grow the whole thing away you know what is the great conclusion of any scientific paper more research more data so I would say let's identify what's needed and focus on that and you know and if need be let's be conservative have um lower um baselines and maybe a higher buffer pool contribution and then for all of this raising the price of carbon will allow more players more people in um wanting to do forestry wanting to do carbon um I know that for me right now the price of carbon the Biden administration raised it to 51 a ton they used to be like four in the last administration but economists think it should be about 150 a ton and Canada's leading the way in 2030 it's going to be 170 so I think raising that price putting a price on carbon and understanding that that's needed to have a real impact is important and then I could also hire really wonderful people that have the technical capabilities to do this work at a great salary so they could you know help climate as well as feed their families in a nice way and not work at NASA which is their other alternative given the tremendous skills needed to do this work so next slide please so just a little quote from Voltaire perfect as the enemy of the good I think there's definitely areas that identified for improvement let's focus on those and you know make offsets of one of the solutions for climate change next slide thank you thanks so much Christy very very interesting presentation and I know we're going to get some some questions coming from the audience but there are a few that came to my mind and one of them was related to this concept of quality of credits and Liz you mentioned that several times and Christy you mentioned it and so I'd like to come back to each of you with a question about that and first with Liz you know an open-ended question you know what when you think of quality what are you thinking of a little little more deeply sir I think there's several criteria that we we use to measure quality in our purchases of carbon removal credits those include durability the amount of time that carbon removal is actually kept carbon is actually removed out of the atmosphere durability is queen as we say at Microsoft it's it's king it's queen it's everything and for us I think the future will have to be the future of carbon removal have to be being able to measure durability consistently across project types so forestry soil and the engineering solutions that's really crucial additionality and leakage are also both simultaneously important and really tricky additionality is essentially whether or not carbon is removed on a net new basis relative to what would have happened without climate finance leakage is whether or not I think you probably all know this many of you know this better than I but leakage is essentially whether or not a project shifts emissions to another region as a result of economic displacement and we've done some we've been excited to do some really interesting inquiry on that with Barbara Haya and Matt Pots and others to really help advance the advance the conversation there and for us it's really about just continuing to shore those criteria up and continuing to be really transparent about what we're looking for because we we know that it's you know this carbon removal market is very nascent and it's not something that's been around for 20 years it's really been around for about one and a half years or or slightly more and so continuing to iterate on those criteria will be really crucial for us thanks listen and to Christy I'm going to ask this in kind of a nice way then maybe a not so nice way the the nice way is you know you've talked about and you showed a slide of many different verification standards and so what are the differences between them now the not so nice way is geez if there are that many different standards it must mean that none of them are read none none of them really stands out as being who's being really good so I'm just curious about your reaction to those comments I think that there it's like a car for ice cream there's a flavor version for everyone and maybe what fits your criteria needs you definitely need to do a feasibility study I mean I think that some people might be attracted to the cap and trade program of the California Air Resources Board the prices are quite higher the tons I think it's about $14 a ton now but I think some people don't like to be beholden to the attorney general of the state of California so that might scare them away the period of monitoring is 100 years some people just don't want to commit their family to that long so then there's the voluntary market where the prices are a little bit lower but the the rules are different so I think it really just depends on the criteria of your fact of your standards and I think in terms of quality I think that's really interesting but it there you really need to have sound methodologies that use the best science use the best approaches but the end of the day it's very complicated and that we need good people to be doing these and to make these methodologies we have established several and they are peer reviewed there's verifiers that look at them in some cases at the same time we're realizing that it might not quite work in the lake states or we might need to make a little tweak in this part of Indonesia so it's one of those things where we're learning and we just need to be flexible and understand where more growth opportunities more learning needs to take place and improve upon that and that's why just today one of the standards had a rata and clarifications about within the approach to one of the equations so we're learning that you know when we're testing them in different areas they might need to be updated okay thank you you know from the audience there have been a number of questions related to fire and you know that really is an important issue because you know as many people know the you know a there were some carb california registry credits in southern oregon that were burned up in one of the big fires and and obviously that's brought this issue to front of mind i i wonder and i'll just ask each of you each of the panelists to comment briefly on how they think about fire with respect to carbon credits related to forest so maybe start with you dick and then then christie then liz yeah well first of all i would say we haven't purchased any land in the west um in california we have land in eastern washington and oregon which has experienced fires none of those are in carbon projects i think the protocols do a good job of setting up a buffer pool that can be used for um for the whole program so if if you know for each project that we we put into the california program for instance there's a buffer pool that's assigned anywhere from 15 to 20 and those credits go into the buffer pool and we never get those credits back and they're to cover projects that have fire risk in our higher risk so i would say we're our company is reticent i think at this point we haven't looked at we've looked at some california property we haven't purchased any and i think fire is one of one of those reasons um but i do think the protocols um handle fire uh well at least the california protocol does so i'll leave it there and let listen to the other answers so christian you want yeah i think it's a student observation and as we know the fire this this year 2021 will be the best fire season that we'll have for the rest of time it's only going to get worse unfortunately due to extreme weather events so i think it is important to look at that one thing to keep in mind is that there was research done across the united states about the buffer pool contribution experts did do a study and they found four percent at the time to be a good number um it might be time to update that research and figure out what really is happening because you know even you know nine ten years ago is a long time with the climate change events that we're noticing um my conservative quality minded approach would be to raise the buffer pool contribution just to be conservative and potentially if things look great um after a certain amount of time it's not needed the buffer pool can be released to the project over time which is a model and some of the other standards and i will say that we have seen that um fire management is actually a part of carbon projects one of the projects we looked at was not harvesting or reducing their harvest and they wanted to use carbon revenue specifically for fuels treatment and fire management primarily to protect their land but also because their neighbors weren't so they needed to have extra revenue to make sure that their fire uh their lands could be intact as in as to the question of how much has been replaced or burnt in this last few years it's uncertain um but there is you know not that many carbon projects um across the west you know it is a small percentage of the land and we do know that it is heavily stocked with fuels so it is a universal problem so Liz i'd be curious of your thoughts on this and particularly how comfortable you are with the buffer stock concept as a way of dealing with uh with fire risk it's a great question i'll be really candid uh some of the carbon one of the carbon offset projects carbon removal projects that we purchased from last year did sustained damage in the bootleg fire so we're very clear right about that risk we had actually prior to the prior to our purchase last year we had actually funded the non-profit carbon plan out of out of the bay area to do an assessment of forest carbon projects against climate risk data sets specifically fire pests and drought and um it's been very sobering to see not only their conclusions which are available online but also simply just the human impact that we've been um experiencing on the west coast of the United States it's clear that um forests are indeed in some regions on paths becoming more of a source than a sink which is incredibly um significant for um for how we move forward in the future but at the same time we at Microsoft are not not scared away from investing in nature-based solutions we know that we need more corporate investment even broadly and independent of carbon offsets we need more corporate investment in nature-based solutions not less they're simply not enough um public money out there today to protect nature-based solutions in the way that we we need to and so with respect to the specific question about buffer pools um we think that it's not only important to have bigger buffer pools like Christy has said I totally totally agree with that but also specifically for buyers like us to require recourse in our contracts when carbon projects do get reversed when carbon gets removed uh reverse back into the atmosphere and so that's something um we work on in all of our we require in all of our contracts whether it's buffer pools or another um another medium um and we we are keeping a really close eye on it because it's clearly a clearly an issue yeah the recourse is kind of like the consumer protection act for carbon credits right right um I'd like to change top directions a little bit and then pose a question directly to Dick he talked about a couple of projects where they sold substantial amounts of of carbon and generated considerable revenue and I'd just be curious uh Dick what kind of impact can carbon projects have on property level returns and I'm not asking for state secrets here but you know just in ranges does this this uh like uh up to 100 basis points of return 100 to 300 uh it's wildly variable everywhere I just be interest curious about your thoughts on that well it's a good question Clark and we don't know yet until we close the fund out what the final increase uh or impact the basis points are and so the way we viewed it is a um uh from the revenue side um what kind of revenue is it going to bring in the short term and then secondly we look at it on a per per acre um per acre revenue side as well so we have I would say in the compliance projects um overall I think we've seen about 150 to 300 dollars per acre that have come out from all of our six compliance projects together if I had to give you a range and for voluntary projects you know we we're looking at probably five or six voluntary projects that are traditional improve force management projects and uh on mainly on on our southern properties and those are going to probably be in the range if we go forward with them on 50 to 100 125 dollars an acre and so I can't comment on the basis points until our funds close uh but that's where we are and the reason I can't is because when you put a carbon project on a property it's similar to a long term conservation easement and there is an impact to the value of the property and it impacts the appraisal property so if you buy a property for 100 million dollars and you you get carbon money out of it you have to weigh that with what the the reduction in appraisal could be at the time if any at the time of disposition or at the time of sale and so we look at these pro projects through many different lenses to determine if there's projects that will go forward or not and we've had two or three big ones on the order of what I've described earlier that we passed on uh for that for that reason thanks a lot dick that's very helpful in in a couple of the places like in minnesota and in the apple agents you know if you have something like 100 or 300 dollars per acre that's a lot because that land didn't cost that much to begin with well my I'm being told it's time for us to wrap up and I will then therefore do so under penalty of whatever they can do to me remotely and I'd like to thank all the panelists for those very excellent comments and responses to questions uh and and apologize to the audience that we didn't get to more of the questions because I see a steady stream of them here I'd like to thank the audience for their questions and attention and the University of California Berkeley and most particularly the Hall family for having the depressions to fund something like this so thanks a lot good