Carbon Markets, Natural Capital, Private Money: Kate Wharton

Eduardo: [00:00:00] In today’s episode, we have Kate Wharton head of Natural Capital Advisory at CrossBoundary. Kate is an investment professional unlocking private capital for high impact transactions in emerging and frontier markets who are focus on nature based solutions. Welcome to the show, Kate. 

 

Kate: Thank you. Excited to be here.

 

Eduardo: Excellent. So, well, let’s start from the top. Tell us a little bit about your story and your journey and how do you end up driving capital for nature based solutions. 

 

Kate: My journey begins in Cincinnati, Ohio. I grew up on five acres of land in the middle of the woods and you spent a lot of time outdoors as a kid.

 

And so this has really been sort of an important part of my life personally. And it always felt sort of an obviously important part of my connection with the world. That said I’ve had sort of a detour in, in getting back to, to nature as a, a central part of my career. I went to Georgia Tech for engineering was sort of dead set on that trajectory.

 

And really in, in college had the [00:01:00] chance to actually travel internationally for the first time and sort of step out of textbooks into the real world. And, you know, in this travel spent a semester working in Bangladesh and number other places. And, you know, a big part of that experience was just seeing the real world, seeing the vast injustices and realizing that there is no inevitability to progress.

 

We have to be a part of that. And I remember feeling just very, very angry at what I was seeing at the fact that I was able to sort of live so comfortably in this world, in which so many others had different experiences. And so I sort of pivoted from engineering at that point into economic development.

 

And I really focused on that throughout my professional career over the last decade or so, and really focusing on areas affected by conflict and fragility. Started my career in Deloitte’s public sector practice working on renewable energy, water, sanitation in emerging markets then spent time in Istanbul as chief operating officer of a humanitarian technology startup called Hala Systems that operates an early [00:02:00] warning system for airstrikes against civilians in Syria.

 

Got an MBA as, as one does at Stanford and at that point really pivoted into finance because none of this stuff works if you can’t figure out how to fund it. One of the biggest things I’ve seen, especially in this part of the country is that there’s not a lack of capital that’s not the issue.

 

And so I really wanted to focus on how to channel the funding that is out there and especially the money that’s being raised for climate into really high quality projects in places where that capital can really go a long way. And so after getting my MBA I spent the last few years at CrossBoundary which is an investment firm focused on unlocking private capital in emerging and frontier markets.

 

I spent the first two years here leading our work in Iraq opening our office there in 2020. And now I’m in a global role leading our natural capital advisory practice which focuses specifically on investments in nature. Um, Had sort of a, I think as many of us did during the pandemic a sort of realization of none of this matters if we don’t address climate.

 

And so finding my way in that space really came to the conclusion that natural climate solutions was an area [00:03:00] that’s extremely underinvested in, and has outsize importance in, in what we need to accomplish. And so it’s been a fun time, which I’m sure we’ll talk more about.

 

Eduardo: Wow. It’s an amazing trajectory. This realization that something’s wrong and that you had to do something about is fundamental. 

 

In today’s economic system, you have a system that really rewards destruction of nature, and there’s really nothing to counter it.

 

I mean, the only thing that we have right now that somewhat works is carbon credits. But tell, tell us a little bit about like, what’s your perspective on why this carbon sinks are so important and what is the state of natural capital today? 

 

Kate: It’s a very big question. And so if you’ll indulge me, I might zoom out a little bit before diving into to the climate side of things.

 

And just, just talk a bit about, about natural capital more broadly. Cause I think that’s yeah, obviously a, an even bigger topic. Natural capital is essentially an asset that we have whose value is derived from a wide range of ecosystem services of which carbon sequestration is one of those.

 

Beyond the climate aspect of things, we also [00:04:00] have food production and water cycle regulation and biodiversity and cooling from all these other things. The fundamental source of this market failure is that these positive externalities, that nature is creating are not accounted for.

 

They have zero value, no one’s paying for them. And so if we’re only looking at the value of a tree from its value is timber. Then obviously our economic system is going to reward cutting it down. One implication of this that is kind of interesting, maybe too nerdy, but I I’ll mention is, you know, natural capital is largely missing from a lot of our economic accounting as well.

 

So you look at GDP, there’s no natural capital in that. It’s a flow, whereas natural capital is a stock. And so you can actually increase your GDP by degrading and destroying nature. Now there’s obviously something wrong with this. I think the sort of bigger story here is that it’s not an exaggeration to say that climate change is a massive market failure.

 

Maybe the biggest market failure that we’ve had. So that’s sort of natural capital more broadly. If we zoom into those sort of narrower topic of carbon sequestration and climate sinks. Maybe just a few sort of [00:05:00] stats to frame the situation.

 

So when we look at global emissions about a quarter of them are from the food agriculture and land use sector. A lot of that is from cutting down forests in agriculture, other uses. at the same time I think something that’s often underappreciated in the climate conversations is that about 40% of emissions, don’t actually go into the atmosphere.

 

They are absorbed by land sinks and by ocean sinks. And so really you have nature playing two distinct roles in climate. And this is sort of the bathtub analogy you might might have heard of. So the first role is avoiding emissions.

 

So like turning off the tap, no more water into the tub. This is done by things like avoiding deforestation. And so preventing the emissions that come from trees decomposing for example the other role is in removals or sequestration. So scooping the water back out of the tub after it’s already been added.

 

And so this is, comes from activities like replanting trees or planting trees where maybe there weren’t any before. And a carbon sink specifically just means that it’s an area [00:06:00] where the carbon removal, the sequestration is higher than what it releases.

 

So it’s sort of net absorbing emissions and, you know, good examples of this are tropical forests, tropical peat lands. The best estimates are that about 40% of the solutions that we need to meet the Paris agreement targets come from nature. And yet they’re solutions that only receives about 2% of climate finance today. A final, final, final point is this is obviously only the, the mitigation side.

 

So there’s also climate adaptation. Nature not only has sort of checks the box on mitigation, but also provides important services like protecting coasts from extreme weather events that are accelerated by climate change helping support local cooling. So you plant trees in a city, it not only can contribute to sequestering carbon, but also helps maintain cooler temperatures, which as we know from all the heat waves is a major health impact of climate.

 

And also supporting things like climate smart agriculture. So how do we produce food in a world with less water and more extreme weather events?

 

Eduardo: The current instrument is carbon current financing.

 

Can you give us a high level [00:07:00] overview of how you see carbon markets today? Why are they so important? And and then how do you use them to unlock capital? 

 

Kate: I think of carbon markets at the highest level as a tool for transition, right?

 

It’s, it’s not the ultimate solution. It’s not a panacea. We need to do all the other things as well. But it is an important mechanism because as I mentioned before, it’s actually putting a value on an important service carbon sequestration that previously had no value, especially for nature based solutions.

 

As great as it would be to say, we’re gonna stop all emissions today. That’s simply not practical. We are in a transition. And so as we do that, carbon markets can allow for the trading of those emission reduction outcomes. Carbon markets encompasses, a, a variety of different sort of fragmented markets within that.

 

So there are regulated markets such as in California and in Europe where the government has decided to put a cap on emissions, and there are certain rules for trading within that. There are also voluntary markets which is sort of my focus in this work

 

and so voluntary markets are corporation or [00:08:00] another group deciding voluntarily to purchase carbon offsets as part of their broader decarbonization plan. And then finally there’s the article six marketplace, which is sort of in the voluntary space, sort of in regulated space.

 

And that essentially governs emissions trading between countries. There’s obviously a lot of promise in carbon markets, there are also very fair criticism. So I think maybe just important to say that quality is of utmost importance and is not a perfect system. It is a system that is being improved.

 

The two aspects of quality that are discussed and important are demand side and supply side. So on the demand side, what is it that allows a company to make it a credible claim of offsetting? So obviously the offset needs to be the last thing you’re doing after avoiding emissions or reducing emissions in the first place, obviously.

 

I don’t think anyone, anyone disagrees with that, the question is how do you actually enforce that in practice? Ensuring that offsetting is part of a broader science based decarbonization strategy that is changing business as usual [00:09:00] is absolutely important. On the supply side likewise there are a number of really fundamental concepts.

 

 Additionality, is this an activity that would not have otherwise occurred? Otherwise it may be worth paying for, but it doesn’t make sense as an offset. And so this both involves the financial additionality of a project, is this funding for an offset actually changing the business’s usual outcome. And then also what’s the baseline, right? If you’re talking about avoided emissions is this forest actually at risk of being cut down in the first place? Obviously the challenge there is there’s no perfect counterfactual.

 

It is a counterfactual we don’t know what would happen. Continuing to improve that is obviously quite important. The other important concepts for supply side integrity include leakage. So making sure that you’re not just shifting an activity from one location to down the road. Save a forest here, the activity just moves next door that’s obviously doesn’t have the intended outcome.

 

And finally permanence is important, so that you’re creating a solution, not only for the short term, but ensuring that this is a long term solution.

 

 I think in terms of the importance what I think is very exciting is this is a, a new source [00:10:00] of private capital for nature based solutions. Typically these activities have largely been funded by philanthropic or public capital, which while great is constrained.

 

There’s very limited amounts of that available. And so using that to actually crowd in private capital can obviously increase funding for the sector. And then additionally, the other great thing is that it’s longer term funding. So many conservation projects for example, are constrained by the year by year or, or short term funding that has to be pieced together and obviously makes it difficult to cross something that lasts for 30 years when planning in small increments.

 

And so I think that’s the other big opportunity of this particular source of funding. It’s obviously not the only important thing. It’s one of many ways to fund these projects.

 

Eduardo: There’s a huge imbalance right now, between supply and demand. And can you give us an idea of what is the extent of that imbalance right now, between supply and demand of carbon offsets? Why is price not like, absolutely spiking up for carbon? What’s your perspective on that?

 

Kate: I think one thing that’s important to recognize is not all carbon [00:11:00] credits are the same in terms of quality in terms of type in terms of the type of activity that’s generating them.

 

And on the demand side buyers are also looking for different things. Now where there is a lack of supply is high quality credits. We are seeing, for example some lower quality credits sort of coming onto the market that previously we’re not necessarily profitable to validate and verify.

 

But there’s pushback on that, and where there is a gap is high quality credits. I think the other thing to mention is demand is growing much faster than supply. There’s a supply crunch now, but there will be even bigger supply crunch in the future just based on rising demand.

 

And the fact that a lot of the supply has a much longer lead time. So if you want renewable credits from nature based solutions it’s gonna take you 10 years to plant and grow a tree. That’s the reality of it. And so we are seeing prices start to rise, and we’re also seeing buyers looking to lock in future prices in anticipation, both of that increased price.

 

And also that continued supply crunch into the future. 

 

Eduardo: Tell [00:12:00] a little bit about the infrastructure needed to make sure this kind money is flowing to conservation product projects and nature based solutions. And then what are the gaps on infrastructure that you see?

 

Kate: In terms of what’s needed you can look at different stages in the project development cycle. So there’s definitely a need for more support in the early stages of projects. In part, this is because there are costs to actually doing the feasibility studies, doing the necessary measurements and baseline, even just understanding, is there a carbon opportunity here?

 

And one thing that we’re seeing is a lot of groups who know that carbon is out there as a potential financing mechanism source of capital, but don’t necessarily have that internal expertise to assess if this is something they should be spending time on, if this is a real opportunity.

 

And so there’s a lot of support needed at the early stage, both on the financial and technical assistance side in sort of building that pipeline of projects and doing those sort of rapid assessment activities. So that’s one [00:13:00] thing I think is really important.

 

The other thing we’re seeing is the way that projects are being financed is quite interesting. So we have the grants to get up off the ground. But then when you really need 10, 20, 50 million dollars to fund a restoration or a conservation project that can’t really be grant funded.

 

There’s just not enough capital to do that at scale. At the same time it’s still such a novel project type and there’s still enough uncertainty in carbon markets that commercial banks and financial investors are not yet comfortable getting involved. And so mostly what we’re seeing is that the projects are being funded by either the direct buyers of credit.

 

So the corporations that are providing upfront financing in return for long term offtake agreement or carbon stream, or full ownership of the project or brokers or other intermediaries who are sort of taking that same supply of capital to fund projects upfront. One of the challenges obviously is there’s a bit of misalignment there.

 

You’re looking to both fund the project, but also secure credits at hopefully a low price. To make it worth your [00:14:00] time. And often, because these are really long term projects 30 years it’s hard to assess the risks and you are taking a lot of upfront risk.

 

And so the deals that are being struck might be what’s needed to get capital in the door now, but, in 10, 5, 10 years I think the situation will change dramatically. And so it’s not necessarily the best deal over the long term. So one thing that’s really missing in terms of gaps and, and this is one thing that we’re working on is debt, for example if you have a long term offtake agreement, you can provide lending to a project which allows them to retain more of the credits upfront and hopefully capture more of the upside as carbon prices continue to rise over time.

 

Other gaps, regulation is really, really important. We’re all sort of following how article six is being implemented at the country level. But really what’s important there is creating certainty and really creating a clear view of what the risks are to an investor.

 

I mentions sort of the early stage support is another really big one. The other thing that, we’re working on specifically is there are also a lot of transaction level barriers that come into play. And this is not specific to carbon projects, but I think is particularly salient here.

 

You [00:15:00] have information asymmetry, for a lot of investors. This is their first time looking at some of these markets for carbon projects. These are largely activities that in the past would’ve been funded from grants or public sources, as I mentioned, and are now looking at creating investible commercial projects for the first time.

 

And so there’s a lot of just information asymmetries and often lack of trust there that we’re also looking to overcome and actually pulling deals together.

 

And I think what’s really exciting is that we’re doing a lot of sort of new deals, new places for the first time.

 

And so it’s really important that those deals are really setting the right standards and showing what’s possible. The worst thing that we do is bad deals that reduce the appeal of the sector overall. We’re quite keen to really think through how should this be done in a way that aligns incentives in a way that appropriately compensates different stakeholders for the risk that they’re taking and allows us to create the impact that we need to in places that are often hard to new business.

 

Eduardo: Do you think that the carbon markets will evolve and will prove to be sufficient [00:16:00] to cover the gap, or do we need other models and other kinds of financing in addition to carbon? 

 

Kate: So carbon markets are one piece of the solution. Absolutely not sufficient both in terms of volume and sort of the mechanism. One important thing to note is that carbon markets help address the revenue side so that the big problem in the space has been who pays?

 

Who pays for the services that trees provide, who pays for biodiversity preservation. And so carbon markets provide a buyer and a means to actually make those transactions happen. How we finance projects is obviously a different question. I think we also obviously need markets beyond carbon for other ecosystem services and we need nature based solutions to be funded based on other revenue streams as well, whether that’s agriculture or eco-tourism or any number of other other businesses that can be built around this asset.

 

Eduardo: Nature based solutions is a big umbrella.

 

 Can you give some examples and the types of initiatives and projects that fall under that concept of nature based solutions?[00:17:00] 

 

Kate: There’s a number of buckets that I would maybe offer. One, you have your food systems, agriculture where your primary output is sale of food products.

 

You have what we might call like sustainable landscapes or restoration projects, which is sort of where this conversation is focused, where the sale of carbon credits is probably gonna be the main revenue stream. You have other nature based enterprises. So whether that’s ecotourism or other businesses that are built around nature separate from agriculture. There’s also a whole category of green infrastructure. So, I think some really exciting things around for example mangroves can play an important role in protecting coastal ecosystems from flooding, from storm surges.

 

So looking at green or green gray infrastructure solutions. And then finally there’s a set of enabling technologies and services. So all of the monitoring and verification systems, geospatial work, agritech so like solar drip irrigation systems. So there’s a technology focused [00:18:00] bucket as well.

 

And each of those have very different types of funding that would be appropriate.

 

Eduardo: A lot of the work you do is in frontier markets and a lot of these markets that are actually rich in resources, rich in nature and forests are also affected by lots of conflict and crisis, and there’s a lot of other really high stakes difficult environments. So how do you do deals there?

 

How do you actually navigate those landscapes? 

 

Kate: Good question. Important question. Obviously a lot of this is very deal specific. What the risks are and what actually would need to be done to mitigate those. I think one thing that I often point out is there’s often a big gap in perceived risks.

 

 I love talking about my work in Irak because often people envision what we are doing and what the context look like is, is quite different from what you see on the news to what’s happening on the ground. And that’s not to say that many of the risks are not very real.

 

They absolutely are, but there’s also a big perceived risk element to many of these markets. Especially for investors who don’t necessarily have a footprint [00:19:00] there yet, or don’t have teams on the ground. That gap I think is really important to bridge. There’s often an important role of concessional financing and blended finance which can be used to improve the risk return profile of a deal. So blended finance is essentially utilizing public or philanthropic capital either in the deal structure or alongside it. Usually it’s used for risk reduction, but it can also be used to boost the returns for investors.

 

And so this could be for example a guarantee for a portion of the deal. It could be the political risk insurance. It could be a technical assistance sidecar for a fund. So really this is about improving the deal in order to make it work for private investors.

 

There are products such as political risk insurance that are available if you wanna ensure against war and civil disturbance, if you wanna ensure against expropriation of the government is a direct counterpart in the deal.

 

So there are tools like that as well. Often what we’re doing is simply helping investors to understand the context better, to understand the market, to understand the commercial aspects of the deal and the specifics in a new geography, cuz there is a [00:20:00] cost to that.

 

There’s a cost to any sort of pioneering transaction. And so that’s also one of the reasons why you often need to sort of subsidize that first move or whether it’s from the investor perspective or from the company perspective, 

 

Eduardo: What’s the profile of the investor that seeks this kinda investment?

 

Kate: This is very different geography to geography as well. The landscape of investors in Kenya looks very different from the investors in Iraq or DRC. We work with a really wide range. So development finance institutions are obviously important players. So groups like US Development Finance Corporation, there are private equity funds, impact investors, venture capital firms, family offices.

 

 Most of the groups we work with are looking for commercial returns. These aren’t people providing grants. There are real good deals to be done.

 

Eduardo: What are the characteristics that you look for in a deal that make it fundable in these frontier markets? 

 

Kate: We’ve done some research with the IFC around some of the characteristics investors are looking for are for example, revenues and hard currency. It’s often a really big issue. One of the big [00:21:00] challenges often in these markets if the currency is not pegged to the dollar and has some volatility, is that if you are generating your revenues in the local currency, but you have the investment being made in US dollars, that’s a lot of exposure to foreign currency exchange rate risk. Often foreign investor in that case, if they are putting dollars into the deal, they also want to see that you have revenues in dollars.

 

That’s gonna be really, really helpful. An interesting thing about carbon credits is that that actually helps check that box. Because you’re selling to international wires. And so you’re able to sort of match the currency of the investment with the currency of revenues.

 

Other things that investors are often looking for are insulation from international competition. So is this something that’s defensible. Limited domestic competition, it could be having a monopoly over an industry, for example, is an obvious way to limit domestic competition, but it could also be being a first mover or having some other specific advantage.

 

And then also the opportunistic competitive advantage of the local market. What is it that this country or this region has that’s just not [00:22:00] available elsewhere. For an investor who’s looking for good deals even in a potentially challenging macroeconomic context,

 

these are often things that make a deal more attractive. 

 

Eduardo: I ask you if you often see multi revenue type projects. You have this particular project where there’s some revenue from carbon here to protect the piece of land. Some revenue from a forestry products and some revenue from eco-tourism. This blended formula,

 

do you see that emerging in those markets as well? 

 

Kate: I typically put the carbon transactions in two buckets, one where carbon really is the make or break of the project. So if it’s a conservation or reforestation. That is very different from what you’re describing, which is an enterprise that has multiple revenue streams, where carbon is a smaller portion.

 

And it it’s super important for how these projects are funded. So often what we see is from existing sources of capital impact funds private equity funds lenders. The carbon piece [00:23:00] is the less known piece, the less certain piece. And so if you have these other revenue streams, it makes it much easier to actually invest.

 

And so there might be sort of a cap. 50% of your company that doesn’t work for us as opposed to, if it’s 10%, 20%, then that’s actually lendable. It’s hard to be an expert in carbon. If you’re more of a generalist fund or you’re an ag fund it’s very different to invest in ag than it is to invest in ag plus carbon. And so that is a very reasonable approach. Whereas if you see for the projects that are really, really carbon focused, it has to be either someone who’s interested in that deal because they’re purchasing the carbon credits or because they really have an expertise in carbon, have a perspective on where the market is going and are looking to make an informed vet in that space.

 

So yes, absolutely. For more traditional pools of capital, that those multiple revenue streams are absolutely critical. And then there’s sort of a separate category of carbon projects.

 

Eduardo: There’s a recent development in Congo where some lands are being open for oil drilling exploration. This is potentially devastating. So from your perspective what can be [00:24:00] done to revert that? Is there something actually that can be done at this point?

 

Kate: The broadest picture here is this is inevitable. This is what happens. And it is the rational outcome. If we won’t put money behind protecting nature many promises have been made. We know that the Congo basin is the only significant carbon sink left in the world from some recent research from WR the Amazon is sort of neutral.

 

Indonesia is actually a net carbon source at this point. This is an area we know we have to protect, but we haven’t put enough money around it. And haven’t followed through on those commitments. From the perspective of a country that is looking to balance its own right to development and has a number of other needs that it’s accountable to beyond climate, that this is a reasonable approach. In general, there are also political considerations in this particular situation. There is a real opportunity cost. We also need to reflect that in our conversations around pricing.

 

And if you’re only willing to pay $5 a ton, that might not be enough to overcome the opportunity cost. If you’re talking about protecting land that has oil. I think it also illustrates another important [00:25:00] point. A lot of the conversations around carbon offsets have really focused on removals as significantly prioritized over avoidance in part, because of the challenge of understanding what is the actual counterfactual?

 

Is this a credible offset, which is again, very fair. But this would be a conservation project. There is a question of whether carbon markets and offsets specifically are the best way to do that.

 

You can have other forms of payment. You can have obviously regulation and other approaches. So not to say carbon finances is the solution here. And in this particular case, it definitely needs to be sort of a broader solution, not a piecemeal solution.

 

 The last thought I have here is it is obviously important not to ignore the politics. These solutions are not just around money. It’s also around people and around institutions and aligning incentives. 

 

Eduardo: Well, there’s definitely a revenue potential for the government, that is very clear. What other than carbon offsets or biodiversity credits, we use. Regulation will play a role, but where’s the revenue for the [00:26:00] government. 

 

Kate: We know what the potential value is from oil resources. The value from protecting carbon sink is harder to understand until there’s actual offers on the table.

 

You can do it through offsets, or you can do it simply through paying for those outcomes. The us could pay for these mitigation outcomes without accounting, as an offset for anybody.

 

Eduardo: You mentioned and have written about the time value of carbon. Can you explain that concept a little bit? 

 

Kate: The idea of the time value of carbon and the same as the concept of the time value of money, is that avoiding a ton of emissions today has greater value than avoiding a ton of emissions in 10 years. In the same way that a dollar in my hand today is worth more than a dollar in 10 years. And we should assign an appropriate discount rate to that. Now this is important for a couple of reasons in the climate context. One is this has been called the decade of action.

 

And one of the reasons for that is that there are very real planetary tipping points at [00:27:00] play where if we reach a certain threshold, we cannot go back. This is a case for biodiversity. It’s a case for melting up the ice caps. 

 

The point being, if we don’t actually achieve certain outcomes today, we may not be able to reverse that action in the future. The other interesting nuance for nature based solutions in particular is that they actually on the whole become less effective as climate changes. So the ocean will absorb less CO2 as it becomes warmer.

 

That is a scientific fact. And so these tools that we have are more effective today than they will be in the future, if we continue on this trajectory. One of the reasons why I’m personally focused on nature based solutions is that while yes, we need all the different removal technologies and approaches and such this is a thing that we can actually do here and now.

 

And if we don’t, it will be even harder to solve the problem in the future. And so we should definitely be valuing actions today, greater than actions in the future. And nature based solutions are an important part of that in large part, because of that time value of carbon.

 

Eduardo: [00:28:00] Do you think that current prices should reflect this and if so, how? 

 

Kate: One of the ways in which this often comes into play practically is in questions around permanence. And I may have a few hot takes on this topic, but I think a lot of the conversation, especially in Silicon valley has been around the shortcomings of nature based solutions in the category of permanence.

 

So if I promise not to cut down a tree and I cut it down in a hundred years, is that solution worth paying for? Now, this is often put in contrast to technology based removal or solutions that have you know, thousand year permanence is often a sort of standard that that is aspired to. Now while it makes perfect sense and is obviously important to not just be short term solutions,

 

I feel quite strongly that even keeping a forest for 20 years is like absolutely critical. Obviously that shouldn’t be what we aspire to, but. If you’re unwilling to invest [00:29:00] in avoid a deforestation or in replanting, because you can’t promise it’ll be here and for the rest of eternity, I think you’re sort of missing the point.

 

One of the reasons being this concept at the time value of carbon. I would rather have a forest standing for the next 10 years than to have a promise of that same amount of carbon sequestered in a hundred years in a more permanent way.

 

Eduardo: There’s a lot of activity and people who want to get funded for their businesses. What’s your call to action or message to them? 

 

Kate: I have a call to action, both for entrepreneurs and for investors as well. And a big part of that is just, is learning to speak each other’s language and communicate in a way that will make sense to the other parties.

 

So for entrepreneurs in this space, there is very deep technical expertise in what you’re doing. Translating that into the financial plans, the business plans, the risk assessment and mitigation that investors will need to see for it to be investible is really, really important.

 

Likewise for investors, my main message is to visit. Get on the ground and actually talk to people in person is really really important really, really fun. And there’s, there’s so much inspiration that can be picked up in the process as well.

 

And then [00:30:00] make your first investment and learn. Especially if we need to deploy a massive amount of capital over the next couple of decades. Well, that’s only gonna happen if you’re making those first investments today.

 

There are a lot of groups that are really committed to bringing capital into this space. Governments, donors, development partners ,us. We wanna help and really put together deals that work for everyone. 

 

Eduardo: Where can people learn more about CrossBoundary and the work you’re doing? 

 

Kate: We’re trying to put out some papers and different things, but I think, just website or just get in touch. Love to chat.

 

Eduardo: Are you ready for the rapid five? Number one. Top author or book. 

 

Kate: This is really hard to make rapid. I’m a huge sci-fi fan and I’m also a huge fan of this emerging genre of cli-fi, like climate sci-fi.

 

Just cuz it lets you like explore ideas that if you were to place them in the present time, there’s so many objections that couldn’t happen. This is wrong, this is wrong. So set it in the future and you can really have interesting intellectual debate. My favorite cli-fi books recently had been Neal Stevenson’s Termination Shock, Kim Stanley Robinson’s Ministry For The Future, [00:31:00] and I think Dune will always be the original cli-fi series. 

 

Eduardo: Number two, what climate leader do you look up to or inspires you? 

 

Kate: I’m gonna answer the non-answer, which is I think the most inspiring people and who I look up to are the ones who are not in the headlines who are working behind the scenes and have been doing this for decades.

 

And think a lot of us are coming into this space more recently and pivoting our careers into climate, which is absolutely fantastic, but doing that with humility and in collaboration with people who have really worked on this on multi-generational time scales.

 

Eduardo: Number three. If you had a magic wand, what will be the one thing you will change or problem you’ll solve today? 

 

Kate: If I had a magic wand, I think the world would be a much better place if everyone spent 30 minutes a day in nature, I think it would change our mindsets and bring the needed connection to help us solve this problem. 

 

Eduardo: Number four, is who do you think we need to have the podcast? 

 

Kate: I think having like the people on the ground doing the hard work is would be really awesome. 

 

Eduardo: Number five. Do you think we’ll make it?

 

Kate: I will steal Madeline Albright’s line that [00:32:00] I’m an optimist who worries a lot. So, yes. Because I’m an optimist, but I, I really think the how of it matters and there’s a lot of potential futures and ways that we could make it, some of which are more attractive, some of which are quite dystopian.

 

So yes, and I hope to make it a way that includes nature in our future as well. 

 

Eduardo: Thank you for being with us, Kate. 

 

Kate: Yeah. Thank you. This was fun.