Pachama is transforming carbon credits with state-of-the-art technology

The Pachama carbon credit platform has just released the second iteration of its Project Evaluation Criteria with the introduction of a dynamic approach to baselines as one of the key points of the update.

The company uses remote sensing and artificial intelligence to monitor the amount of carbon sequestered and stored by forests to help preserve and restore nature while fighting climate change.

The Carbon Herald spoke with Pachama representatives to learn more about how the platform is revolutionizing carbon crediting by providing a more accurate and transparent approach.

Carlos Silva, Pachama Remote Sensing Scientist: Pachama has been around for about three years, we had an earlier iteration as we’ve been developing all the underlying satellite observations and building the computing infrastructure to essentially apply a number of checks to existing projects. But we have two core areas that revolve around a satellite perspective: project baseline and baseline carbon crediting. So that’s where the project presents an estimate of what would have happened in the absence of the project. And the credit issue is relative to that number.

[There are] many shortcomings and problems in the way baselines are currently determined. Therefore, we apply a series of historical checks, as well as our dynamic baseline, depending on the type of project, to assess whether the baselines presented by the projects are reasonable.

How often are updates performed and can you explain the process in more detail?

Charles Silva: Due to the fact that this is all done in Excel spreadsheets and PDF files, typically when these updates are sent to a registry for later credits, they have been on longer timescales (often more than five years). The data we bring is annual at the moment. So we operate on an annual basis, which is much more frequent than the status quo.

Source: Pachamama

So if in the case of, say, a forest fire, a project burns down completely, what happens to the carbon credits that were sold for that particular project?

Charles Silva: At this time, this is managed by the registry, which means that each project is obliged to reserve said insurance fund for credits issued. And so the losses on that fire would have to be balanced by taking them out of that insurance fund. There’s a larger long-term question of whether that insurance group is big enough to handle [such damage]depending on where the parts are located, fire hazards [and so on].

However, most of the problem, at least for Pachamama, is really building some kind of integrity in the market, as often people weren’t looking at these losses, because you had to be on the ground and have someone report that some places have burned.

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Now we can get a much better estimate of how much was burned in terms of its area and an estimate of carbon lost that we can then report to the market registry saying, ‘Look, you should be drawing from your insurance fund to cover what we see to be losses for the Project. [Right now]none of the existing registries have an operational way of looking at this from space on a large scale, to ensure that those insurance withdrawals are taking place.

Source: Pachamama

Cait Harding, director of product marketing for Pachama: When you have a large company that is selecting a large project, it is important that they also understand all of the fire hazards associated with that project. And that’s part of our evaluation criteria, which really serves to educate and inform buyers about all the critical components in deciding whether or not to invest in these projects. Fire hazard is one of those pieces, along with a variety of other controls.

Charles Silva: So, at the end of the day, a carbon credit must represent a net reduction in carbon emissions to the atmosphere or a net removal of carbon from the atmosphere. The cornerstones here are a variety of quality checks to ensure that that fundamental proposition is true. And so the first step around precision is again, for example, with a reference carbon. Are the amounts you are estimating to determine the release well estimated and quantified? Both in terms of carbon losses within a project over time and from the baseline.

Then there’s additionality: there’s no change in the status quo if you’re paying someone to already do something they’ve been doing in the past. So, if someone already started conserving the forest area 10 or 20 years ago, and then gives you a credit, you won’t actually offset the buyer’s emissions. Therefore, the dynamic baseline is really the approach designed to ensure additionality.

Important: Pachama Forest Carbon Monitoring Platform raises $55 million in series B round

Cait Harding: But what is really unique about what Pachama is doing is implementing technology to bring more transparency and integrity to these measurements. By using technology in a variety of these controls, we are able to show that insight to buyers in a way that has never been done before.

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Guy Pinjuv, PhD, Director of Forest Science and Policy at Pachama: Traditionally, you would send people like me out to wrap trees with tape measures and measure tree heights and that sort of thing. But we don’t have to do that now, because we can use remote sensing data, we can use lidar, we can use cloud-penetrating radar, and look at land-use change over time. And that’s where we can say, this is a new tool that I didn’t have, in all these project reviews, and I can’t tell you how much I wish I had it.

What Pachamama has now with this new tool is that we can look at the entire project area the size of a US state and say, this is what we think the carbon stock is, here’s the deforestation that we see that occurs.

Source: Pachamama

Cait Harding: We are evaluating many of the projects that exist in the records today. Right now, after these projects have gone through this long process to finally be able to issue credits, we’re evaluating them after the fact. And what we are discovering is that there are many projects that are providing real benefits to the climate community, but perhaps the exact amount of carbon has not been calculated correctly. So what we’d like to do is use that technology earlier and work with partners early on to determine the appropriate estimates and ultimately accelerate the time during which projects can reach the market. And that will bring a lot more supply to the market.

There is a lot of demand for high-quality carbon credits and a relatively small supply. So what we’re looking to do is use technology, working directly with people who have been starting these projects for the last two or three decades, working directly with communities to make sure that we’re correctly calculating the amount of carbon that’s being sequestered in these Projects.

Guy Pinjuv: So this idea of ​​a dynamic baseline and the ability to quantify it is brand new. We had some of these tools 15 years ago, but we couldn’t do as many iterations as quickly. Right now, we’re filtering projects and seeing which ones we think look reasonable. But we are working directly with Verra and other registries to write new methodologies that include these baselines.

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