A conversation with Cameron Frayling, co-founder of Pivotal, about why and how biodiversity can be measured cheaply and what that might enable.
LISTEN TO THE CONVERSATION ON:
Getting sick of the carbon hype? Get ready for the biodiversity one, but first, we have to figure out how to measure it and what a biodiversity gain actually means. The current status quo is sending a team of ecologists to survey, that is listening, looking etc., at the plants, insects, birds, and make a report. That is extremely expensive, and only mining companies can afford that. Also because they are forced to do so. So what role can technology play here? How do we bring down the costs by 100x??
WHY ARE CURRENT BIODIVERSITY SURVEYS SO EXPENSIVE
Even though biodiversity offsetting regulation is law in 42 countries, compliance is only at 20%, as the costs are incredibly high. The extractive mining industry, which makes enough money, is the only one that can afford it and it has it in its budgeting plans. Instead of having 15 people walking in a landscape, Pivotal aims to have one person deploying lots of sensors, technology, flying drones, etc.
‘The cost of that team that she led was half a million dollars, but there were three teams and they went back twice, one for the wet season and one for the dry season. Who on Earth could possibly afford that level of survey? Only companies that are required to do it, and only for the most profitable projects’. – Cameron Frayling
‘When it comes to data collection, the first part is, we can’t have 15 people walking through a forest or walking through a landscape. That’s just way too expensive. It doesn’t scale. I mean, are there enough ecologists out there to handle the demand for all the sights that are in the world? I would say almost certainly no, it’s not a model that scales. And certainly, it’s very expensive.’ – Cameron Frayling
HOW CURRENT BIODIVERSITY SURVEYS WORK
The way the offsets have been constructed historically is deeply flawed. We need to be looking at creating significant gains, regenerating the land, and regenerating nature. Offsetting destruction is nowhere near enough. Cameron gives us an example of an offset that is public. They put 25 years of funding into a trust, which is what they’re required to show to comply with a regulation, and then they go and dig their mine.
‘We’re trying to enable people to invest in actual measured outcomes, not in hopes or aspirations or simply putting money into a trust.’ – Cameron Frayling
‘They put $70 million into a trust in Mongolia. There is no guarantee they’re actually going to increase biodiversity in this area. And yet, the mine has started to be dug. And this is one example of how there’s a huge disconnection between the destruction that takes place and actual increases that are created. So there’s no guarantee, there’s no real link to gains that are made.’ – Cameron Frayling
THE COSTS NEED TO COME DOWN
It becomes highly difficult to invest in an outcome that helps offset your impact, there is very little you can do, and that’s because the cost has been far too high. So, by bringing down the cost, it’s possible to create a wave of investing in outcomes for nature.
‘You have to be able to reduce the cost of the monitoring, otherwise there’s no way that you can measure the outcome. It has to cost less than any revenue that you might gain or financial gains that you might get from providing an outcome for nature.’ – Cameron Frayling
‘I think there are many people out there who want to create outcomes for nature, who want to restore nature and biodiversity. But that means nothing for most people if they can’t afford to do it, or the incentives are stacked against them.’ – Cameron Frayling
HOW BIODIVERSITY GAIN CREDITS CAN ENABLE MASSIVE TRANSITIONS ON THE LAND
The math has to make sense. It has to make sense for people on the ground, from a biodiversity and an ecologist point of view. You need a mathematician and an ecologist to help construct this. It also needs to work for the people who are going to be trading any kind of value. So it is necessary to speak with traders, with people who would purchase, sell, trade a credit, and that’s what Pivotal has been doing. They need to understand their needs and the companies’ needs. They need to speak to the farmers and foresters, and people doing rewilding.
‘Having a biodiversity credit is a message that clearly resonates with people far better than carbon. And so I would say, for any developers out there, you should bear that in mind.’ – Cameron Frayling
‘One thing I’ve been very reluctant to do is to pass any judgment on what is actually going to achieve these gains. I think it’s different in every single ecosystem, and every single habitat, you have to listen to ecologists, you have to work with the farmers on the ground, and how do they become financially better off where every time they receive a payment, it’s because they did something that was real, that actually resulted in an outcome. And I would say that can have a very rapid transformation of how we use land.’ – Cameron Frayling
OTHER POINTS DISCUSSED
Koen and Cameron also talked about:
- How they survey their first pilot;
- How you construct biodiversity credits;
- What Cameron would do if he had a magicwand;
- Marine protected areas;
- How to restore a landscape.
To know more about Cameron Frayling and Pivotal, download and listen to this episode.
- Financing Nature: Closing the Global Biodiversity Financing Gap – Paulson Institute Report
- Belltown Farms
- Clear Frontier Farmland Investment
- UN WCMC
- UN Biodiversity Lab
- Paper Ecological Diversity: Measuring the Unmeasurable
- Isabella Tree – Rewilding a 3,500 acre British farm that was never profitable before
- John Kempf, what would he do with a 1 billion dollar investment fund?
- John Kempf – Forget about soil, Focus on plant health instead
- Paul McMahon on building a 250M climate positive portfolio of tree crops in Europe
- Richard Focken on how German pension funds are investing significantly in sustainable agroforestry
- Oliver Hanke invested over 150M in sustainable agroforestry
- Cath Tayleur on why measuring biodiversity is one of the key levers for regenerative agriculture
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The above references an opinion and is for information and educational purposes only. It is not intended to be investment advice. Seek a duly licensed professional for investment advice.