 Before we get started, may I just share a little bit about our podcast. So we, Julia, myself, and our third partner, Kate, Wharton, who unfortunately isn't here today, we host a regular podcast about nature-based solutions and talk to the people and the industry leaders who are shaping its future. You'll learn a bit more about the podcast at SolvingClimateNaturally.com and also listen to our past episodes on Apple podcasts as well as Spotify. We're so excited to be speaking with Valerie Shen today, so let's get started. All right. So we'll do the spiel and standard intro. Welcome to SolvingClimateNaturally, where we speak with experts and leaders of the cutting edge of nature-based solutions to help demystify this growing field. So we're your hosts. I'm Julia Strong. I'm Ida Hemball. And our third co-host, Kate Wharton, is not here today. She couldn't join us, unfortunately, but we're looking forward to the conversation. So we're mixing things up. We're doing this live episode, so everything you see here is live today. We've included the Q&A at the end, looking forward to your questions. We're also going to talk a broader level, zoom out from our typical range of guests to talk more about the buyers, the people who are driving the demand for offsets that are driving impact today. We'll talk about what role offsets play and net zero strategies, as well as the role of nature in particular. So let's kick it off. So Valerie, thank you for being with us. So as some of the audience might know, Valerie and I go way back to undergrad and actually Julia, Valerie and I all met in grad school at Stanford together where we all proceeds of the same environmental and business program. So for our audience, Valerie is a partner and the Chief Operating Officer at G2 Venture Partners, which is a Bay Area-based Climate Tech Fund. She oversees all operational aspects of the firm and most relevantly for this conversation, she also oversees impact reporting and management and offset procurement. Groupsly, Valerie was an analyst at Kleiner Perkins Green Growth Fund and she started her career at McKinsey & Company where she worked on lots of things for management and adjacent to climate, including energy projects in particular. Welcome Valerie to our show. Thank you, excited to be here with both of you. So Val, as before we get into it, please help us orient and understand sort of what G2 Venture Partners does and orient us to where it sits in the sort of climate and financial ecosystem. Of course. So our team at G2 Venture Partners first came together in 2008 managing the Green Growth Fund at Kleiner Perkins. This was a billion dollar fund initially focused just on clean energy and then quickly transitioned to add a number of sectors, transportation, logistics, food and ag, retail, manufacturing, as we realized that the climate question is not just about making energy clean, but rather working at all of the heavy asset sectors of the economy and figuring out how to make them more resource efficient, often by using digital technology. So in 2017, we wanted to keep investing against that thesis and spun out and created G2 as a separate firm, now investing out of our second fund and we're typically investing at the Series B to Series D stage. So companies that already have a product that works, many paying customers who love it, a couple million or even tens of millions of dollars of revenue and where we believe we can help them reach their next inflection point. Awesome. So Valerie, tell us more about you personally, your journey into climate and your interests there. Of course. I was a pretty nerdy high schooler, did a lot of speech and debate competitions and was exposed to a number of policy and politics issues. The ones that were most exciting to me were always around climate and the environment. And so I explored these topics in college pretty early on, met an advisor that was really inspirational, so chose to study environmental science and have always felt that the answers to our climate challenges lie at the intersection of business and politics and science, but you have to develop some sort of expertise first. So I chose the business route, didn't really know what to do, so I went to McKinsey to learn general business skills. And then found my team at Clenor Perkins was with them for the very beginning when we spun out and created G2, went to business school where I met you guys and then have come back for the last three years. Awesome. So our topic for today's podcast is carbon offsets and carbon offset procurement. And we've actually got a couple different angles on this particular topic because I'll let Julia speak about this, but she works at NCX, which is a carbon offset provider. Valerie has perspectives both as investor and as a procure. And I myself work at Galvanize Climate Solutions, which is also an investment platform focused purely on climate solutions as the name implies. And we sort of take a systems approach where in addition to capital, we provide the policy, science and sort of corporate development expertise to accelerate those solutions. Julia, you wanna say a little bit about NCX and what it does? Sure. So I lead business development at NCX that stands for the natural capital exchange. We're a data-driven forest carbon marketplace. So focused on using remote sensing, machine learning, silo imagery to measure every acre of forest across the US and create a platform where any landowner of any size can enroll and be paid to change their forest management behavior to generate high quality carbon offsets that we sell to companies like Microsoft and others. And the role of the silo technology and remote sensing is really to focus on those two challenges in carbon markets that we'll touch on a little bit today, one on scale, how can we democratize access to the millions of small landowners who previously have been excluded from these markets and then two, how can we use remote sensing to improve quality and ensure that we're driving real change on the ground? Awesome. So let's get right into it. We thought we would start with one of the big picture debates of anyone operating in the space. So Valerie, as your team thought about procuring offsets, how did you guys think about do carbon offsets actually enable us to achieve net zero or are they actually a distraction? I like that we're starting with this question. Our team has debated this extensively. Actually on our blog, there's a debate post where I took the side arguing that they're not overall good. But our firm wide view and just my view in general, truly, is that on balance, carbon offsets are more positive than negative in the whole climate puzzle, especially if they're used properly and we can dive more into that. Yeah, so let's say a little bit more about what you mean by used properly. What does good look like? Yeah. Well, there's a lot of different factors to consider. I'll point out four that I think are most relevant, additionality, permanence, leakage and transparency. So first with additionality, we wanna make sure that any carbon offsets that people are paying for are accomplishing something that wouldn't otherwise have already occurred, right? So if you think about forestry, for example, often carbon offsets are paying people to not cut down trees. You wanna make sure that those offsets are paying people who actually would have cut down the trees, otherwise you're not changing any of the situation. A second point is permanence. And what that means is any sort of climate solution, especially if it's a natural climate offset, natural carbon offset, you need to make sure that the change is going to persist at least for 100 years, maybe even longer, depending on the time scale of what you think you're purchasing. And it's not a change that is going to last just a year or two when you thought it was going to be 100 plus years of carbon offset. The third piece is leakage. And that means that what you're doing in one piece of land or one piece of the ocean isn't just going to shift the negative harms to another different piece. So taking forestry for an example, again, if you have a situation where you're paying one farmer to not cut down his trees or not, you know, hurt his land, but what happens instead is that the next patch of forest gets cut down, then you've just shifted the carbon impact and you haven't really made a big difference. And then the fourth piece, which we believe is probably the most important is transparency, which is in order for all of this to work, we have to have a system where any person who's not an expert in the space can go procure a carbon offset, not have to do a ton of research and find things where they can verify the additionality, permanence leakage and a number of other characteristics simply and easily. Yeah, and we'll go get into why that's so hard in today's economy and marketplace today for to find those really high quality carbon credits, but just want to dig in a little bit more into why use offsets and how you're thinking about it. You work with industries that have a lot of emissions. So if we know that to get to net zero, we're gonna have to invest in cutting residual emissions and to invest in action now, how should companies think about balancing their operational emissions and reducing those and then investing in beyond the value chain as mitigation such as offsets? We feel pretty strongly that you shouldn't use carbon offsets to eliminate personal responsibility or corporate responsibility to take real action and changes in your operations that can reduce emissions. But inevitably we won't be able to get to complete net zero just by changing our actions. So offsets are often the best solution for the chunk at the end that you just can't do anything about in your daily operations. And the way we think about balancing this is you basically want to make a good financial decision. So you should do the things in your business where the price per ton of carbon saved is less than the price per ton for buying real carbon offsets that are going to be able to offset those same emissions. But when we think about this math, often we apply a discount to the actual carbon offsets that we're buying. And what I mean by that is, let's say you're paying $10 a ton to buy carbon offsets. You might for whatever reason not believe that these offsets are as permanent or as additional as they may claim. So it could make sense to apply some sort of discount rate and say each ton of offsets that we're buying are really only half a ton. And these are all sort of numbers that we're making up right now because there aren't specific metrics for it. But let's say you believe that then really the embedded price is $20 per ton for that offset that you're purchasing. So $20 is the price you should be using when evaluating your firm operations rather than 10. And if you do that sort of math you might find that it makes more sense than you previously thought to actually clean up your own operations first. So it's sort of an internal carbon price that you're applying to your operations. And other companies do that too. It's a sort of internal carbon tax, right? Like Microsoft, for example, is actually charging, I think $100 per ton for their travel to promote investments in sustainable aviation fuel. But it's super interesting because I think this will be sort of a recurring theme in our conversation is the amount of judgment. Like you talked about, I think one of the big needs in this space is that in addition to transparency, there just needs to be sort of ease of understanding what's going on. And we're only a few minutes in and already, like there's a lot of dark and it's quite complex. And you work at a firm dedicated to these, to understand these solutions and have the bandwidth and yet you still have to sort of incorporate your own judgment into all these different systems and choices. Yeah, it's a great point. And so then when we think about your own journey, like think about procuring offsets, we'd love to talk more about how you went about it given the point that it's really complex. Not many companies have the big teams to evaluate different options. Chief sustainability officer or sustainability team might be thinking about all different kinds of things in their daily day job, not just offsets and the range of solutions that are available to them. So how did you guys think about it? What were the steps that you took and what were the challenges you had along the way? So I think the first part of this is why did we even decide that we wanted to offset our emissions and go net zero? And I think there were two pieces for us. The first was this is just really core to how we operate as a firm. We're investing in climate tech solutions. We want to be a solution to the general climate questions and problems that we have when we think that a lot of people in our ecosystem really care about this. The second piece is that we're hoping that if there's a company we're inspired by in the carbon offset and carbon accounting space, we could invest in them. And we really believe in the customer journey in making our investments. So we thought what better way than to try out being a customer and see what it would be like to make our decision. Then once we decided we wanted to go net zero, the first piece is the accounting. So figuring out just how much carbon are we emitting and what's the magnitude of the offsets that we should be purchasing. We looked at a number of the different players that could help with accounting. And just because of the size of our operations, which are 14 people, one office, really few emissions other than traveling in our office building, we concluded that there was nothing that was at a cheap enough price point and sufficiently easy to use. So we just did it ourselves on Excel, but we decided it was really important to overestimate in all of those moments where there was judgment like Ida mentioned. And so we overestimated whether it was the number of trips we talk or the emissions caused by each trip and ultimately came up with 1,000 tons of carbon that we needed to offset. Then we had to figure out where to buy from. There's a number of different providers such as Patch that are marketplaces aggregating various different sorts of offsets. We decided that we actually wanted to buy directly from the producer for two reasons. One is if you cut out the middlemen, you can potentially save some amount of money. And then more importantly, we had all these questions about additionality and permanence and leakage and we wanted to be able to ask those questions directly. And then we ultimately bought from Blue Source. And the reason that we chose their project was they had a number of different pieces first to choose from our size made sense for them. And then we also wanted to buy a project in the US because that's where most of our emissions are from. And ultimately went with Enhanced Forestry Management Project. It's really interesting because we do see that a lot of our customers and prospective customers are interested in that local impact and investing in communities where they are based. And nature-based solutions are a really beneficial way to do that, right? Because of the range of forests, they're everywhere. And also the ability to invest in co-benefits like local communities who depend on these forests. But as you thought about it, I think one thing that, again, another layer of complexity here is that there are just so many different types of offsets that you can procure. I think we often talk about like engineered removal versus nature-based solutions. And sometimes that's a fuzzy line. That's not always necessarily crystal clear. How did you guys think about nature-based solutions in particular within your portfolio of what you wanted to buy? Our overall philosophy for making the purchase was that we wanted to buy the cheapest credits that we really believed in. We're pretty cost-conscious in a number of decision-making and the idea was we didn't believe that the volume of our offsets was necessarily enough to truly be catalytic and start a new project or push forward the technology in any way. We just wanted to buy something where we felt credibly we were offsetting our emissions and not wasting a ton of money. And it turns out that forestry is generally the cheapest credible offsets that we could find. Another peer firm of ours took actually a pretty different approach where they decided to go with a portfolio of solutions and when they did their math for how many offsets they needed to buy, they're a similar sized firm and they came up with an answer that was about 10% the total tonnage that we came up with. And I think going back to the judgment, everything they did was equally valid. It was just a number of different assumptions but then they ended up buying offsets that cost about 10 times as much per ton as ours. So we came up with the same answer in terms of the amount of dollars that we sort of committed into this space but different approaches and there's so many different ways that people have done it. Yeah, it's so incredibly complicated. I think you touched on something here and earlier about sort of like the differing motivations that buyers have and sometimes like we talk about sort of compensators versus catalysts, I think both you and sounds like this peer firm both are compensators to an extent, right, you're like one for one trying to abate your emissions footprint though I would say you're kind of a conservative compensator or generous compensator in the sense that you're trying to ensure that you truly offset your operational footprints, your main very conservative assumptions around that. We sometimes talk about some buyers being more catalysts so they are willing to just invest in things to sort of seed those new solution areas and without necessarily being entirely confident that that will offset their underlying operational footprint. Yeah, I think about like stripe is a good example of this, right? Where they say we need carbon removal, we need to scale this up. I think I saw the recent studies show that we're gonna need 10 billion tons approximately of carbon removal by 2050 in order to stay on the 1.5 degree C trajectory. And on another podcast, someone from Carbon Direct said that we have about capacity of 100,000 engineered removals today. That is an enormous amount of scale that's going to be needed between now and 2050. And so we need people to start investing in these solutions now and the alternative with nature-based solutions is that they're readily available, scalable today, that they're more cost effective. And so how do you think about investing in solutions now, driving impact now versus the balancing what we need to seed the market for the future? And so a lot of companies are thinking about either going all in on one versus the other or creating a portfolio approach. Yeah, and I don't think there's a right answer to that. I think with what Stripe is building because they have so many tons that are now on their platform, they're really able to move the needle and be catalytic in that way with our thousand tons, we weren't really under the illusion that we were going to create a new engineered solution. We wanted to buy something where we felt we could offset our emissions in the year that they were actually produced and with that nature-based is the best solution right now. Right, like you're confident that that nature-based solution actually happened, occurred, some of these engineered removals, they're still vets, right? Is it actually gonna pan out that they end up leading to that impact? Exactly. Yeah, absolutely. So Val, you talked a little bit about how you thought about quality and selection in your process. Can you just say a little bit more about some of the tools you specifically used and sort of like what role they played in that process? Yep, so one of the tools that we hope will eventually be developed in a stronger way is ratings agencies for carbon credits. There's a few that are being worked on, Silvera, Calyx Global, B-Zero. We've talked to all of them and we're very supportive of what they're doing. They're all still in the startup stage, but we're hopeful that they will continue to grow and get to a point where anyone can log on to the platform and see exactly what the agencies are rating each of the carbon offset projects they're considering. We also look at the various registries and try to understand is this project approved by each registry? But one of the issues there is in some ways it's a pretty low bar. There's a huge variety of quality that each registry approves. And in addition, the registries have pretty strict standards in terms of the process that you need to meet, whether or not that actually leads to good quality. And sometimes that means new or more innovative solutions aren't approved by the registry just yet or take longer to be approved. And so there was no one source of information that we thought was the best source of information. So there was a lot of just verifying across different agencies. Yeah, that's another challenge that we see in the market today is that in order to drive innovation at the scale necessary, we're going to need to be able to have rapid iteration, and rapid review of different potential solutions and make sure that there's more proof of results versus proof of process in doing that. So how do we create these quantitative benchmarks to ensure that there's a standard of quality that people can assess and be able to drive that rapid iteration that's needed? Yeah, completely. I mean, one of the recent challenges I think has been in the news quite a bit has been, for instance, from the challenges around like buffer pool erosion. Juliana, I know that you've sort of done some work in particular. Do you want to sort of elaborate on that? Sure, so buffer pools are essentially an insurance mechanism for nature-based solutions. So the challenge of nature is that it is inherently impermanent, right? Nature is dynamic, but we know it's necessary to solving the climate crisis. There's science that says that nature-based solutions can help meet over a third of the necessary mitigation that's needed on an annual basis. We also know that, and I saw a recent Science-Based Targets initiative blog post, sorry for more jargon, we can answer questions in the Q&A if people aren't sure about that. But Science-Based Targets initiative, which is the initiative that corporations use to keep, have goal-setting to meet them, melt them, reach net zero, that said there's no way that we're gonna get to 1.5 degrees C without investing in stopping deforestation and investing in nature-based solutions. So, but the challenge again is that it's inherently impermanent. These 100-year time frames that we were talking about are really long. We don't know what a force is gonna be doing 10 years from now, 20 years from now, 100 years from now. And the buffer pools, these insurance mechanisms that set aside credits to account for if a fire burns down a forest. They're under-capitalized. I think Valerie, you saw that stat, right? There was a study that was done recently about California specifically because of all of the wildfires that happened last year. And one of the estimates is that in less than a decade, we've already used up 95% of the buffer pool that was accounted for wildfire loss to forest that was supposed to last for 100 years. So if we're going to use up that whole buffer in less than a decade, what it basically means is that each ton of carbon offset that you purchased with that registry or that sort of standard is ultimately going to be worth a little bit less or some amount less, that's to be determined. Yeah, it's essentially that people are buying these forward-facing contracts, right? That they're hoping that that, in fact, will be delivered on an ongoing basis. Some of the innovations that people are driving in the market and including NCX, I'm biased, of course, is how do we use shorter-term contracts to measure and pay for that impact on an ongoing basis and fully account for that and deliver that as opposed to set up these longer-term liabilities that traditional projects have had. And in some ways, that's the argument for the more engineered solutions where you're literally taking carbon out of the atmosphere and bearing it or sequestering it or somehow removing it in a way that feels more permanent than hoping that people are going to fulfill their requirements and not cut down trees or not make sure, make sure it doesn't get burned down. Yeah, so the challenge, right, is the nature-based solutions, we know that they're necessary, so how can we account for that impact in a way that is fully delivered? Yes, yeah. No, it's incredibly challenging. I think that kind of goes back to the global question, right, which is how do we, in general, accelerate global investment and procurement of these solutions? One thing that we didn't touch on earlier, but you alluded to, is the Science-Based Targets Initiative, like one issue with offsets is actually if you look at some of the leading, thinking from groups like the Science-Based Target Initiative or if you're an asset manager, your asset managers initiative, is that they don't actually allow you, in the case of Science-Based Targets, they've issued guidance on what you're allowed to count towards actually achieving your target. And in point of fact, you're only allowed to really count emissions reductions through operational activities, and offsets are encouraged as a way of increasing our likelihood of staying on a two-degree, 1.5-degree pathway, but in point of fact, you're not allowed to count it in that way. And so that's one of these challenges of as we think about stimulating procurement and investment in the space, how do you get these coalitions to drive their guidance for that? But maybe Valerie, over to you, what do you think is most necessary? I think that what's necessary is some sort of push, whether it's regulatory or maybe more of a push from consumers and employees to require that all customers or to require that all companies actually are offsetting their emissions or working towards net zero. My strong belief is that altruism only goes so far. So right now we have a small number of companies that are working on goals because for whatever reason, they've decided that it's important. But once we get to the point where all companies are working on this, whether it's because of regulation or just because of the market pressures, then we're going to have so many more customers that you can truly have a robust marketplace, more reason to create those proper rating agencies and then also more validation for each of the processes. Yeah, it'll be interesting to see with the new SEC rules, right? That companies are being required to disclose for climate that whether or not how offsetting will be included in that and how companies will feel, you know, accountable to those net zero goals and how they use offsetting as part of that. Yeah, and I think, and that's the other thing, we live just in an incredibly dynamic regulatory environment. You have the SEC guidance coming out here in Europe, you have the ISSP guidance that's emerging. So sort of the actual regulatory context for this is like very much a live conversation. One thing I will add though, you had mentioned all of these various different targets and I think a lot of them are geared towards what do we need to do in order to maintain warming at 1.5 degrees Celsius max or two degrees Celsius max or what do we need to do to get to complete net zero goals? I would argue that it's important to set those goals and understand what it takes, but any actions that people may be willing to take that would get part way there should still in some ways be applauded and we shouldn't frame it as you have to go all the way to net zero or all of your efforts are useless, right? Or we shouldn't frame it as, well, you must do all of these operational things otherwise they don't even bother buying carbon offsets. We won't count you as meeting the goals. I think everyone is on their own journey and especially in the next few years as we're trying to figure it out, we should be willing to applaud a lot of different actions. Yeah, well, it's interesting. I've definitely heard of companies who are setting their net zero goals and then not knowing how they're gonna get there, right? And so there's a balance of we want people to be setting these aspirational big goals, but should we be applauding that and or should we say, hold people so accountable to it that no one makes a goal, they're not wanting to be vocal about sustainability and sort of they get into this, I heard this term the other day, green hushing where they're sort of made this goal or they're not wanna make a goal, they don't wanna make it very clear they're doing all that sustainability work or that they're thinking about doing sustainability work because they're afraid of being called out. And that's why I think as we think about the offset space and carbon market space, it's so dynamic, it's changing so fast. How do we create systems that enable evolution and rapid iteration and development? And do it transparently, right? And have a sort of more of a learning and public mentality around, instead of locking ourselves into a hundred year contracts or longer things, right? We're able to, as science and technology gets better, adapt and invest in the measurements to understand that we're making improvements as we go. That's a great point. Now we need to applaud kind of year over year change in a way and not think that someone who is a laggard or someone who is a leader today is forever, forever in that state. So we typically love to finish our podcasts with a bit of a lightning round to get into sort of our guests' minds. So Valerie, we would love to ask you some questions and keep your answers very brief. What is your favorite carbon thing? I think I might be your first guest who doesn't have a horse in this race, but I'm gonna go with forests, just the broadest potential for cheap offsets. That will make Julia happy. And what is your favorite book? Ministry for the Future, I think it's my favorite book relevant to this audience. Yep, definitely a winner among the climate community. And if you had a magic wand, what would you do to change or scale nature-based solutions? Okay, so if I had the magic wand, I would make it so that all people who are currently selling carbon offsets that they know are not real or not credible in whatever way would self-remove them from the market so then we know that all the offsets that are in the marketplace are at least reasonably credible by the perception of the people who are creating them. I think what I love about the answer is we've asked this question of all of our guests and they never, I think you're the first person who actually understands what a magic wand is. And so as we look ahead, what gives you hope? I'm really hopeful about the Inflation Reduction Act and the fact that we're finally at a point where we are as a society willing to pass policy that is going to promote the adoption of more climate tech. Yeah, yeah, yeah, I agree with that. And then with respect to nature-based solutions specifically, what is your prediction of the biggest NCS or NBS headline in 2023? My prediction is that in the next year or two, there will be some sort of big scandal where some sort of carbon offset turns out to be completely fake or people wasted a lot of money. And I think what that's going to do though is really clean up the sector and push for more standards and regulation or just more validation. I don't think it's going to destroy the sector because we just all know that it's so important and a big piece of the puzzle. Yeah, awesome. Well, that was the wrap for our standard part of the show. We're gonna turn it over to you now as a live session for Q&A. So I have my handy dandy iPad here. Please submit your questions and I'll go through it. Okay, so here we go. We have three questions for now. So I'm a lender and a prospective borrower. I'm diligence saying, oh, sorry, I got an alert. Okay, we're not gonna go to that session yet. Prospective borrower, I'm diligence saying includes substantial project, projected revenue from carbon. How do I assess the, like what are some things I should think about in assessing that potential investment? It's a good question. The way I would think about it is take the lens of a person who would be potentially buying those carbon offsets. So thinking about the additionality of the permanence, the leakage, the price that they're selling that carbon offset at compared to others and just map out for the next year or five years, whatever timeframe is your project, do you believe that you would buy and then talk to other buyers and get a sense of would they be buying those offsets? So then you can know, do you believe that this income stream that they're projecting from the carbon offsets will be real and will they continue to persist? All right, another lender question. We have some good financiers, investors and lenders in the audience. How seriously should I consider projected revenue from carbon credit revenue? Okay, this is similar to the other one before. Where do you see the carbon market evolving over the next 15 to 20 years? I wish we could predict it over the next one to two. Do you have thoughts from NCX? Yeah, sure. I mean, we know that the carbon market is going to be needed as a part of the solution, right? And it's really nascent right now. I've heard people call it the wild, wild West. And so there are efforts like ICBCM, the integrity council for voluntary carbon markets that are coming up with standards that would actually sit above the other, the main registries that people think of, the Vera, CAR, ACR, gold standard and additionally a new and evolving certifications and registries to help provide guidance. But these processes take time. There's also guidance from GHG protocol, which companies are thinking about how to think about investments in land use sector and how does that relate to offsets? So I think watch this space. We know that there is going to be a necessary investment in carbon markets over the next 15 to 20 years. I'd say that we'll see voluntary, increase in voluntary interest and then eventually regulatory, hopefully, at point where people are increased in carbon markets and the regulatory side, but maybe not one broad overarching global market, right? We might see more of the sort of smaller regulatory, not small relative to bigger than the voluntary carbon market but like California cap and trade program, emissions, European ETS program as opposed to the sort of global scale that we need. And the only thing I'd add to that is I can't imagine a world where in the next several decades this market goes away. Inevitably it's going to grow and as it grows, some of the growing pains will start to get sorted out and right now you kind of have to know a lot about the space in order to properly participate. Hopefully it will move more towards the normal stock market where if you're just a person who's interested, you can log into a platform, read some data and make a purchase. Yeah, I mean there are a lot of people who are betting on that, right? I think I saw news around the London Stock Exchange now has a funding for, you can publicly list, I think, carbon offset companies to get financing for that. So they're betting that this will be big and that there will be standards to help guide that. For sure. All right, here's another one. How does the Web3 world bring alternative forms of credible offsets? Maybe, Ida, you've looked into this a little bit. I think, this is where we need our co-host, Kate, actually. She's our Web3 crypto climate person. Okay, well because the tech has the ability to measure, report and verify with increasing credibility. I mean, I think with Web3, my thought is it's more of a, you know, making sure that the ledger is transparent and there's avoiding double counting and very clear. I would love to hear what you think about on the supply side. Yeah, I think, you know, I'll just revamp on that a little bit without being a Web3 expert by any means. I think some of the most interesting pieces of Web3 are kind of like Toucan, for instance, like they're playing around increasing like efficiencies and transparencies within these sort of markets that like already exist where things can kind of be like easily digitized. But what I haven't seen so far is how Web3 like solves like the upstream issues of quality supply or monitoring. Like I kind of feel like Web3's limitations, I'm happy to be corrected here, are how do you actually fix like the physical problems in the world, but certainly I think has interesting applications in helping us like measure and manage some of these attributes once they're kind of like already characterized. Right, and driving financing towards those projects as well. I think the way it was articulated to me, also not a Web3 expert is that there's been a lot of conversations talking about how do we track the carbon offset to make sure each offset is only counted once. But then there's a separate question of is that offset real? Like can you somehow digitize it so that what you're moving around and tracking so carefully is a proper offset? Because if you're tracking all of these things nicely, but the offsets are fake to begin with, then kind of what's the point? Right, it speaks to this need for increased transparency and sort of the quantitative benchmarking. And so if Web3 can help with like quantitative benchmarking and making that very clear and sort of the traceability of starting from projects like beginning data inputs to data outputs and being able to really review that all the way down the chain, then I think it could be helpful. But again, hope we need a Web3 person up next time. There are probably some in the audience who asked that question to can speak to that. So this is one that we sort of touched on a little bit, maybe we can dig in a little bit more deeply. Can you speak to carbon offsets delaying real change towards carbon neutral business models? So again, like why should you use carbon offsets and when should you use them? Is it delaying change? If purchasing offsets is cheaper than implementing a change to a new business model. Yeah, well, so let me give the arguments that I wrote in our blog post when I was arguing that carbon offsets are not good, right? So there's a few reasons you might believe and in part I think these reasons are true why this would be a bad mode of moving forward. So the first would be it's possible that the money that people are spending to buy carbon offsets would be better spent on their operational efficiencies. Even if each dollar spent on operational efficiencies gets you less tons of offsets, you might believe that that's like a more real credible change to the business and you should be spending money to like green your building or change your internal operations and it'll improve for so many years in the future that that's just a better long-term solution. Another argument would be that by spending money on these offsets and feeling like you're doing good people are going to emit to degrees that they otherwise wouldn't. So an example of that is a lot of flights now allow you to offset your emissions for a surprisingly low number of dollars, right? It's like a couple of dollars or maybe tons of dollars for your cross-country flight, which I'm not quite sure how that math works or what those offsets are, but it feels like it's too little based on the prices that we've seen for offsets. It's possible that people will believe that their action is now carbon neutral and be more likely to fly or more likely to take an emitting action because they feel guilt-free and if that persists too much and you're buying offsets that aren't real then you're just gonna be exacerbating the problem. So it speaks to the need of increased scrutiny, right? On how companies are actually using these offsets. Like I do think that we're in a critical decade for the climate, we need to make an impact today and we're not gonna stop flying. We're not gonna stop using these sort of shipping emissions to get e-commerce and we should, but we're not gonna be able to change consumer behavior at scale, at the speed that we need. And also we can't snap our fingers and stop living a heavily carbonized life. There would be really big challenges to that. So how can we balance the need to reduce which totally we need to do first and foremost but at the same time addressing unavoidable emissions with investments that can help mitigate those emissions today and drive impact today to address, again, like deforestation in countries where, if we don't do that, we won't be able to meet our net zero 1.5 degrees C and carbon finance is one of the means to do that, to ensure that we stop deforesting. So I totally see the concern but we need to have an all of the above solutions and I think the solution would be having more scrutiny again for how are these offsets actually being used? Are they being used against unavoidable emissions and what else is the company doing to reduce emissions and alongside that? Yeah, yeah.