When it comes to innovation we don’t normally think of nature conservation as being a hot sector for disruption, but my guest in this episode is set to change all that, and show us a range of new business models all geared towards conserving and restoring biodiversity. 

Anjali Nelson is General Manager of Operations at GreenCollar, she’s an environmental markets developer that’s leading not only Australia, but the world, in developing nature-based solutions to combat both climate change and biodiversity loss. 

And of course GreenCollar is the sponsor of this series. I’ve followed the progress of this company since its early days when the team earned the backing of some heavy-weight impact investors. It was a moment that shifted my perspective, showing me that environmental markets are both a vital part of the clean energy transition, but also, a potent business sector, with huge growth potential. They proved me right on both counts, and it’s great to have them on board as a partner.

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On this episode…

This episode was a great opportunity to unpack the structures and benefits of carbon credits, but more importantly, to hear about how this market based mechanism is evolving, to offer benefits beyond just carbon removal, and steer capital towards the conservation and restoration of biodiversity.

GreenCollar has been a pioneer in the space for a long time now, and they’re not slowing down, developing new products and methodologies like Reef Credits, and the new Nature Plus biodiversity credits. 

My key takeaway this week…

“What we’re doing is embedding conservation into a diversified livelihood, into the economy on-the-ground. And that means that people can feed and educate their families, they can stay on farms, in times of climate shock, and keep their forests. This is because the market has recognised their contribution to the environment, and that’s game changing in my experience, game changing for conservation.”

Good Future’s Good Books

The Nutmegs Curse: Parables for a Planet in Crisis 

By Amitav Ghosh

He’s a wonderful novelist who writes great stories about Southeast Asia. And this is one of his nonfiction works. And really what he’s arguing is that the climate crisis is very much a product of Western colonial mechanistic views of the environment. So interesting challenge, I’d love to get into a debate with him and have a good old chinwag with him about his findings, and what that means for the future. So yes, there’s one for the reference.

Please note, all book recommendations are directed to Booktopia, a local, Australian online bookseller, and if you choose to buy through that link you also support the podcast as we may receive an affiliate reward. Thanks in advance!



Nature Plus

Reef Credits

Nakau Project

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Full Transcript

Note: this was an automated production by Otter.ai, so some errors may remain

John Treadgold 

We’ve covered a lot of ground in this series so far, it’s all about natural capital, helping people expand their perspectives on sustainable finance to also recognise impacts on biodiversity. This is certainly in your wheelhouse, you’ve got lots of experience, and I’m keen to explore your experience with the evolution of these market based mechanisms. I spoke to Nigel sharp from Tiverton in a previous episode all about his nature based projects.

That’s a useful intro for people. He’s lived and worked on a farm for most of his life. So that’s a good a good baseline people can go back and listen to that one.

But to get started here, I think it’d be good to have a brief introduction to the idea, the concept, the philosophy of carbon credits, I’m sure people have heard that, they’ve got their views on it to topic that’s always been debated.

So if we go back to fundamentals, maybe I can put you on the spot here. How would you explain the structure, the operation, of carbon credits, and why they’re so important at this stage for the clean energy transition?

Anjali Nelson 

Yeah, absolutely, John. And I think I’ll speak specifically to the idea of carbon offsets in a nature-based solutions way. So we can talk about reducing our emissions through renewable energy, that renewable energy transition being critically important, how we’ve get new technologies in transportation to reduce emissions. But when we think about landscapes, agriculture, deforestation, many of the processes happening in our natural environment, through anthropogenic causes, through human activity, are big contributors to climate change. But they’re also incredible opportunities to reduce the impact of climate change.

So our natural environment is the most amazing technology we have when it comes to absorbing carbon out of the atmosphere. So carbon offsets, when we’re talking about nature based solutions, we’re gonna be talking about mangrove protection or soil carbon or planting trees. They’re a financing tool that help us invest in our natural ecosystems to either reduce the loss of those ecosystems and therefore the emissions that go alongside that loss, or to increase the carbon by planting back the trees and planting back the mangroves, and looking at how we do regenerative agriculture to feed our soil with the greenhouse gas emissions that are sitting in the atmosphere and causing climate change.

It’s a tool to finance conservation in that sense, and it is grown hugely there’s it’s been very successful at sending financial flows into landscapes and into nature-based solutions, mainly coming from the corporate sector, where, a company is looking to reduce its emissions through its energy transition through how it deals with its offices, and its lighting, and its staff’s transport. And transitioning away from fossil fuel technologies.

But there’s always a gap, there’s always a certain degree of our emissions that, just by operating our business, just by living our lives were met. And so carbon offsets play a role there as giving organisations an opportunity to invest in solutions that are reducing greenhouse gas, they are part of the solution. So they are a tool to help us get where we need to go. And from my perspective, having a background in conservation, they’re an incredibly powerful tool. And I can talk more about that.

John Treadgold 

Okay, now, look, that’s a really good introduction. And I think so there’s so many components there. Because there’s an economic component, there’s an ecological component, and certainly a corporate one. And I think just to reiterate there, the aim in this transition is to have all groups individuals, but let’s look at companies have them take action, reduce their emissions through finding new energy efficient models, and as you said, new technology. But when there’s that that last bit, I mean, a maybe a cement factory, for instance, or an aluminium manufacturer, very difficult to reduce the carbon output, it’s having a way to offset that emission, which then revalues the landscape ecosystem services, to then fund this protection to revalue that land to give it a greater value as a store of carbon rather than being cleared for forestry or agriculture. Right.

Anjali Nelson 

Yeah, and a key note, in this transition phase is urgency. We have a very short amount of time to reduce emissions, and to transition into a new economy and a new way of living. And the technology available for certain organisations, certain business types just isn’t there yet for them to completely transition. So in this phase of transition, carbon offsets play a critical role for them to be able to invest. And we know from research, that organisations that engage with carbon offsetting are more likely to also be reducing, because they are actively engaging in their emissions footprint, and they’re seeking what pathways.

It’s a marketplace, it needs to be regulated, it needs to be managed carefully. And we’ve seen the carbon market mature over time. And just like any market, it really needs rules and guardrails and regulation around it to make sure that it is used in the right way.

John Treadgold 

Okay, and we’ve talked about carbon credits with the key metric, the KPI there is reducing carbon emissions. But the market has moved on and it’d be great to hear about this evolution of biodiversity credits. And I guess broadening the perspective on the positive outcomes that the intervention is having.

Anjali Nelson 

Yeah, so maybe I can tell a little bit of a story of the evolution of conservation financing. In the couple of decades, I’ve been part of it. And it’s been a very fascinating period, you know, when I first started, if we wanted to source some financing, to do something on the ground, plant, some trees manage some invasive species, we really only had access to grant funding, which generally it was one to three years, if you’re really lucky, it was five years.

And what that did was allow you to do some work, but it never embedded conservation into the landscape or into the livelihoods of the people that were operating in that landscape. And so generally, once the funding dried up, so did the ongoing action.

With the emergence of carbon markets that we’ve just been talking about. There’s been a systemic change in on ground economics.

So what we’re doing is we’re embedding conservation into a diversified livelihood, or economy on the ground. And that means that people can feed, educate their families. Stay on farms, in times of climate shock, keep their forests; because the market has recognised their contribution to the environment. And that’s game changing in my experience game changing for conservation.

We don’t have to have this dichotomy of you can’t have economic gain without it being at the cost of your environment. And so that’s hugely empowering, and has had what I’ve witnessed great impact on the ground for the economies on the ground. So the farmers who now have that diversified income who didn’t have to sell their farms in the drought, who make money from the trees, as they do the cattle as they do their other produce. And that’s really a critical mind shift for conservation, and for economics, if you ask me.

So we’ve seen these significant flows coming through in carbon markets. And this need to put the environment on the balance sheet and interest from impact investors in this space, which is really exciting. And we’re now entering into the second generation of environmental markets projects, or I’m going to call them the second generation, maybe some others are too. And we’re building on the success of carbon markets and learning from the challenges. And we have things such as water quality markets, we’re now looking more in detail at how do we address sustainability in value chains. And we bring the scientific rigour, the measurement, the verification, to drive outcomes, rather than that, going back to that traditional grant-based thing of ‘investing in maybes’ and possible. It’s de-risking the investment.

Biodiversity markets are the freshest face on the scene. I’m very excited about their potential to, as I’ve said, really address sustainability within value chains. How can we support producers to drive financial flows into biodiversity, as well as carbon? But specifically, what biodiversity can look like in productive landscapes?

How do we let producers and communities balanced their revenue streams in more holistic ways, so that they drive ecosystem restoration on their lands, not at a cost to their productivity, but as a way of building that resilient, productive sector. And also, biodiversity units are looking to champion and reward those communities and resource managers, let’s call them, who have been effectively restoring and conserving their environment. In some cases for 10s of 1000s of years, they have to date generally been excluded from the carbon market. And the biodiversity markets are really looking at how we can reward and champion and provide a space, hold a space for traditional and indigenous knowledge and local expertise and knowledge, to continue conserving some of those really important critical ecosystems on our planet.

And that it’s not just the trees or the soil, it can be specific animal groups, it can be look, we can be looking at coral reefs, we could look at the Arctic tundra, so it opens up really new, exciting opportunities.

John Treadgold 

Alright, we know how to measure carbon emissions. But how do you measure biodiversity?

Anjali Nelson 

Yeah, good question. And that’s taken us many years. And thankfully, GreenCollar has been measuring certain facets of biodiversity on the properties where we’ve been working for many years. So we’ve been diving into the science and trying to crack this nut. And we really hope this Nature Plus offering, I believe.

So maybe, if I can explain it, in the sense of when you’re looking at a Carbon Project, around nature based solutions.

So if you were looking at a degraded piece of land that used to be forest, and you’re wanting to reforest it, what you’re going to be looking at and measuring and monitoring is the woody biomass. So what carbon is sitting in the trees and the shrubs and how that changes over time as those trees grow as that forest restores.

But you’re looking at that with biodiversity, what we’re looking at is a whole different range of indicators or metrics. So we’re looking at is the species diversity of those different kinds of trees? Is that fitting the ecological community that this ecosystem is supposed to have? Is there anything suppressing the new trees that are coming up? Are we looking at Habitat for certain key critical animals.

And so you can look at a range of different metrics, and you get a very different overview of what’s happening in that landscape that you can give to that land manager and say, hey, on this part of the property, you have this ecological community, and it could be strengthened, or, it’s condition could be improved in this way.

Whereas over here, you could be doing this. And so we’re getting a very different view and a very empowering view for land managers and resource managers as to what’s happening in their project area. And the actual, what we’re looking at measuring is a change in condition. So an improvement in condition of what we’d call an environmental asset, but the native vegetation, the koala habitat, the health of the reef, we’re looking at a change in condition of that. And that is the way that we build the equation of. Nature Plus unit.

John Treadgold 

Interesting. Well, look, that’s right, you’ve jumped into Nature Plus, and I do want to talk about green colour as a business because I think it’s it’s done a lot of really interesting, innovative, developed lots of innovative business models. So let’s before we get to that, let’s jump in just little bit more detail for people about Nature Plus. What makes this different Is it is it unique to other biodiversity credits that are emerging? Tell us about it.

Anjali Nelson 

Yeah, well, what we really wanted to address and achieve with this Nature Plus offering was something that could provide ongoing crediting and ongoing finance, something that could take degraded ecosystems through restoration and then get them to a stage where they could be maintained and go into a state of conservation.

And so carry landscapes and ecosystems up through that curve into a sustainable place, and then hold them there and continue that financing. We wanted something that could be applied anywhere, Anywhere internationally, in Australia in different ecosystems. And so it’s a tool that we could give to scientists and practitioners around the world. And they could use it as a real vehicle to drive financing into their areas of expertise.

So in that regard, we’ve used the accounting financial framework, which is really amazing framework developed by the Wentworth Group of Concerned Scientists. And what that does is allow us to apply accredited methods to our project area, and tell us what the condition is of that ecosystem or that environmental asset at that time. And then over time, we can measure again and see what the change is. And Nature Plus has converted that into a unit that you can then sell. So you can be rewarded, where you create a positive change in condition for a specific ecosystem, or a specific environmental asset, and you can have that audited, and third party verified, and it’s certified by Accounting for Nature.

John Treadgold 

Okay, so interesting. And so in the traditional model of carbon credits, you’re rewarded for avoided deforestation, not chopping down a forest, there might be rules there that you have to keep it in place for 100 years, and it has to be kept at a certain condition. But this sounds a lot more involved, not only must be maintained, you’ve also got to get it up to a certain biodiversity standard. So what’s the Delta there and how different are these structures?

Anjali Nelson 

Yeah, sure, I think when you’re referring to the avoided deforestation and carbon, those areas have to be under threat. And so you have to show that in the absence of the project, that forest would not be standing.

And yeah, so it’s a little different here, what we’re looking for is, you know, we know our 30 by 30, goals for nature require us to restore degraded land, and to stop the loss of intact areas. And the exciting opportunity here is connectivity is is restoring what’s been degraded, and connecting it to what’s intact, where we can. And creating a more holistic approach.

But yes, it does require a net improvement in condition for units to be generated. And it has to be maintained there. So the investments will be different across different ecosystems. But yes, it is involved. And that’s, that’s the purpose. That’s the point is we need to work at these things. And we need financial tools to support active conservation. And that’s what Nature Plus is looking to achieve.

John Treadgold 

Well, that’s it and I can only imagine the carbon credit will be worth more, because the outcome is so much more.

Anjali Nelson 

Yes, indeed, well, there is the opportunity for the two different types of projects to interact. And there has been a premium carbon product in the market for a while now, which is acknowledged that there’s biodiversity presence on the property, but hasn’t necessarily measured or monitored change in biodiversity. So that’s something really new. And Nature Plus is very much a standalone product. So it doesn’t need to operate in conjunction with carbon, it can operate in landscapes outside of the carbon projects as well.

John Treadgold 

Okay, very good. Let’s dive into GreenCollar, because I think we can, we can wind back to some of the other innovative products, but in terms of the company have followed it for a long time. And super interesting to see where it’s come from and where it’s gone. Tell us about the mindset of this company in terms of trying to innovate these, I think, still quite nascent markets, how you see the opportunities, and the internal culture that that drives that.

Anjali Nelson 

Yeah, absolutely. GreenCollar’s mission has always been and continues to be to this day conservation, getting the environment on the balance sheet, how do we create systemic change, and really respond to that issue that I talked about before that we shouldn’t have economic gain at the cost of the environment. And that shouldn’t be the only option to move forward. And it’s critical that we change that.

And you know, in the last 10-15 years, we’ve been very central in the Australian carbon market, looking to drive the scientific developments, to build rigour into methods. We played a very important role in the development of the code of conduct for the carbon industry. We do similar things internationally. And carbon markets remain an important opportunity for us, and have been very, very important and successful.

But GreenCollar is about conservation. And so we have been for the last eight years, diversifying into new markets and building new markets. Just as we like to write new methods, we like to build new markets and write new standards.

And that’s an incredibly exciting thing and one of the reasons I joined GreenCollar was its willingness to reinvest and put money into into new opportunities. And a really good example of that is the reef credit market in Queensland, which to date has reduced over 40,000 tonnes of dissolved inorganic nitrogen from going out onto the reef.

And so learning from our experience of applying carbon markets, we can apply those tools and learnings to new markets to look at addressing other critical issues. And this is very much part of the culture of green colour and hence why we have a reef credits market why we’re the first in Australia to trial plastics credits, to help corporates address their plastic reduction targets. So helping them stop plastics from ending up in the environment. And now, Nature Plus.

John Treadgold 

so interesting in the evolution of these markets, they require centralised certification. As he talked about the methodologies, you need comparability, need verification? How does that operate when you create a new methodology. Reef credits are great, but how does that get verified and the same with Nature Plus.

Anjali Nelson 

So what we do is we start building the methods and we work with partners we work with on the ground partners, we work with other organisations, we work with governments to build those methods and those standards, and then we give it away. And we give it to another independent third party to administer and run and we become a project developer, like all the others, who may wish to apply that method on their own on their own projects and develop their own unit.

And that’s what’s happened with reef credits. And that is what will happen, again, with Nature Plus where the testing and validation stage. So at the moment, we’re trialing it on our own projects, so that we can make sure that what we eventually take to the whole market and open up to other project developers is fully proofed and trialed and tested and validated in that sense. So yeah, a lot of it is build it, and then build it in partnership, and then give it away, because that’s a critical element of the Independence and the transparency that’s needed for these markets to exist.

John Treadgold 

Yeah. Okay. We’ll look at that genuine innovation, that that that’s great. I’m trying to help people broaden their perspective. And so what’s your maybe mental model for thinking about carbon impacts, emission reduction impacts, and then biodiversity impacts, and I think the two are so closely interlinked. one affects the other, positive feedback loop backwards and forwards.

But despite the complexity, we still want people to sort of understand it. So what’s your view of the linkages?

Anjali Nelson 

I mean, you’re right about this positive feedback loop. And I think whether you are trying to develop carbon projects in nature-based solutions, what you’re doing is you’re looking at trying to mitigate the impact of climate change to try and reduce the amount of greenhouse gases we have in our atmosphere.

But you’re also trying to look at how we can adapt. And we are in a stage now where we need to adapt. And having lived in the Pacific, I saw that firsthand. And so for me, rather than prioritising carbon over biodiversity, it’s about investing in nature-based solutions. Seeing that what we’re doing is building our adaptive capacity, and also letting the greatest tool we have to address this problem, address this problem, which is investing in nature, nature will end can get us out of this if we give her the space to do what she needs to do.

And so they put it under the broad banner of nature-based solutions, rather than saying it should be carbon or it should be biodiversity. As Rachel from WWF spoke about, you know, deforestation, addressing deforestation is an excellent place to be focusing because deforestation contributes greatly to climate change, and also biodiversity loss. But addressing it also opens up many doors for us as far as how we adapt to climate change, the ecosystem-based services, clean air water habitat that we need if we’re going to survive climate shock.

So I think there’s some really important win wins, and we shouldn’t break it down to one or the other. When it comes to biodiversity though, you know, we do need to listen to the scientists. And we do need to hear about those areas that are at the greatest risk, where threats are the highest, where the need is greatest and target that. So for example, in Nature Plus, we look to label our units based on whether they are working in an area that’s targeting threatened species are endangered species or as listed as threatened and vulnerable.

John Treadgold 

I’ll look at so much. I mean, that’s what that’s what this series is all about is really trying to break it down. The corporate world has spent a decade trying to measure their carbon emissions and now we’re broadening that to nature, which is this amorphous, everything around us. It’s a complex adaptive system. It’s everything we rely on, but that means that we can’t ignore it. So, so important, and I think, yeah, the work you’re doing is really excellent there.

And now I’d love to dive into a little bit about your background, you’ve got this great combination of understanding the conservation and the nature side of it. And the economic imperative of getting there. I know you were part of the Nakau project in Fiji and Vanuatu, tell us about about how you found your way here. Are you an economist first or a conservationist first?

Anjali Nelson 

Neither. Interestingly, I would say nature has always been all pervasive in my life, I was, raised camping, and so fortunate to have seen some of great natural wonders of the world growing up, so I always had awe and an amazement, and actually, biology was my best subject in year 12. But I, like many females, my age thought that stem wasn’t for me. So I went into political science and international development and thought I was going to be very much in that area, and a strong social justice thread, until I found myself up against a brick wall and feeling very depressed and kind of traced back and went, actually everything I’ve ever researched, and, and all the world’s problems that bothered me the most, are social justice problems, but they’re also fundamentally about the exploitation of nature. Turns out I’m actually, I’m an environmentalist as much as I’m a social justice advocate.

And so for me, the fascination has been from then onwards about where those two intersect and how interrelated they are. And the Nakau programme, really was the genesis of that, that interest from for me and the other co-founders, we were in the Pacific, at the coalface of communities who were given such an unreasonable choice of either give away timber rights to your forest, or don’t educate your children.

Give away your cultural spiritual connection to place if you want to develop; and it’s just incredible exploitation of both people and nature, and doesn’t the story doesn’t need to be that way.

And so the Nakau programme was this can we actually achieve self-determined development from the restoration and protection of nature. And we’ve achieved that. And we have achieved that in Vanuatu and Fiji and Solomon Islands, just as GreenCollar has achieved that through Australia and internationally. And that was part of why join GreenCollar was the excitement of that learning, all those tears and all that excitement. And now having this amazing team, huge team of scientists, lawyers, communicators, economists that I can rely on to help me scale that good story. And there is a really good and important story there.

John Treadgold 

Tell us more about Nakau. What were the projects? And what were the systems and what were the learnings there?

Anjali Nelson 

Yeah, well, we came out of living land, which isn’t a Pacific based environmental education NGO, we trialed carbon markets, basically saying what happens if you can verify and measure the level of ownership that the indigenous land holders have over decision making in a Carbon Project? And what kind of decisions do they make? And how do they manage these projects? How do they manage their forest resources going forward?

And so we established the Nakau methodology framework, which is really in many ways, testing all of those things and saying, how do we know how do we know as project managers and developers how much ownership, truly there is on the ground, and how much leadership can come from the ground and it’s been an incredibly rewarding experience.

The project of Vanuatu won the UN equator award in 2019, our Fiji projects won many awards, and they’ve diversified into honey production, and agro forestry and tourism. Lots of kind of Genesis that’s come out of that core understanding that if we can keep this intact, the world is going to reward and respect that our forest is highly valuable, not just to us, but to the world. And needs protecting, and we should have a right to develop in the way that we want to develop, because of that.

John Treadgold  29:10

That’s probably a good place to finish. Because that’s a beautiful picture of the more dry economic description of these carbon markets that we started with to try and help people understand, let’s revalue these important assets and make sure that they’re worth more living and in their biodiverse and natural state, rather than needing to bring in extractive model you said of clearing it and finding a revenue model.

So that’s excellent. And look, thank you for all of this. I think it was really good to have a baseline explanation of these new market-based mechanisms that are proving so effective and so vital for the transition. And of course, help people understand GreenCollar, really innovative Aussie company, going from strength to strength, so thank you.

But before I let you go, I do need a book recommendation.

Anjali Nelson 

Well, here’s one that might be a bit more obscure. We’ll see; The Nutmegs Curse: Parables for a Planet in Crisis by Amitav Ghosh, who’s a wonderful novelist who writes great stories about Southeast Asia. And this is one of his nonfiction works. And really what he’s arguing is that the climate crisis is very much a product of Western, colonial, mechanistic views of the environment. An interesting challenge, I’d love to get into a debate with him and have a good old chinwag with him about his findings, and what that means for the future. So yes, there’s one for the reference.

John Treadgold 

Excellent. No, I haven’t heard of it. But it is interesting. I mean, that’s the broad of a philosophical debate that’s at the heart of I think everything I think about is the technology will save us view that our economy can build new technology and the problems that got us to where we are, you know, will they be the things that save us?

Or, is it the system as a whole, that’s flawed, and depends on extraction. And so if we want to reverse that, do we have to change the system?

Now we’re at the end of the conversation, and we could probably talk for another hour about that with a couple of political scientists here. But did he have any insights at the end?

Anjali Nelson 

There’s this suggestion of leaving space for multiple views. So how do we bring back this vitalist indigenous view? Nature speaks and nature is powerful. And how do we make space at the table for that again, and I think that speaks very much to what my experience is, is that none of this is black and white. And we can’t completely start again on our system. And we can’t completely rely on technology. Just as biodiversity is beautifully complex and dynamic. So must be our solutions. So that’s how I go for it.

John Treadgold 

Well, that’s it. I think it’s yeah, the wise words of a Japanese animated film were without biodiversity you you design in failure, because it’s the complexity that drives resilience. And that’s what we need and you can’t try to understand it. We just got to know that it needs to be more complex. So let’s leave it on that note. Thank you, Angeli.