Nature for Justice was created in 2020 to address what we perceived to be the asymmetry in power between on-the-ground groups most affected by climate change and the investors, carbon developers, and companies that were taking advantage of unregulated carbon markets to develop inequitable benefit-sharing agreements.
Our first thought was “Wait a second, without the natural capital assets that the local proponent is bringing to the agreement, there would be no project!” We started to describe our business model as one that promoted a blended assets approach to defining “what is fair” in carbon trades — the primary asset being the proponent’s natural capital.
We seek climate justice through a recognition of the contributions of all parties to projects that generate carbon benefits. We also widen the lens on what constitutes meaningful benefits to local communities from these projects – including the fundamental need for carbon offsets to catalyze positive shifts in ecosystem service delivery that improve the resilience of communities to climate change.
Since our launch, rapid growth and team diversity has allowed us to benefit from various perspectives, life experiences, and cultural backgrounds. As CEO, this experience is the most rewarding of my career, as we genuinely embrace and practice diversity daily.
This diversity enables us to differentiate ourselves in the following 5 ways:
We design and execute projects together with our local partners to guarantee that the requirements of local partners and communities are addressed. The Barriers to Entry that we wrote about recently are very real and it’s only through co-creation that they can be addressed.
We are committed to making sure that communities receive a fair share of the benefits derived from projects in their localities. The term ‘carbon cowboys’ has been used pejoratively to describe one-sided deals, but the issue is more extensive than that.
There is currently no standard approach for ensuring fairness in benefit-sharing agreements, and the power imbalance between those well-versed in carbon markets and local proponents new to the subject exacerbates the problem. In response to this, we are actively seeking standardization and consistent models for fair benefit-sharing agreements to help level the playing field and promote equitable outcomes for all parties involved.
N4J employs an adaptive management approach to monitor and measure project outcomes, demonstrate value ,and inform decision-making processes. Recent articles in The Guardian have rightly scrutinized the carbon additionality and permanence of carbon projects. Although these articles primarily discussed avoidance projects, their arguments could also be applied to carbon removal projects.
However, these articles overlooked the concept of a project’s “climate justice additionality.” We are currently working on defining methods to measure this factor over time and are exploring the development of a Climate Resiliency Index. The project will fail if you are not continually monitoring and adapting the social contract between the outside investors and the local community.
We emphasize to the groups we collaborate with that it is crucial to prioritize technical and managerial capacity building for local partners as a key risk management strategy.
Most projects have a duration of 25 years or longer, and it is vital to acknowledge that local situations are dynamic (not solely due to our changing climate). Failing to recognize and address this dynamism significantly increases the risk of project failure over time.
Equitable Financial Modeling
One of the most persistent and challenging issues we have encountered is the reluctance to adopt a financial modeling approach that acknowledges the impacts on future generations. What does this mean?
Financial modelers use a discount rate to decide whether to invest in a project or not. The discount rate is an interest rate applied in a discounted cash flow analysis to determine the present value of future cash flows. This evaluation helps to ascertain if the future cash flows from a project or investment will outweigh the capital outlay required to fund the project or investment in the present.
Our stance, which is gradually gaining traction among others, is that high discount rates are detrimental and fail to recognize the benefits of investing now for the sake of future generations. By adopting a more forward-thinking approach, we can better account for the long-term value of projects and investments that prioritize the well-being of generations to come.
N4J excels in addressing the above-mentioned concerns through our extensive expertise and diversity. We capitalize on the vast knowledge and relationships our team and advisors have cultivated from decades of experience working in over 70 countries. We greatly appreciate any feedback on our approach and encourage suggestions about anything that may be missing from our mission.
Our primary goal is to bring climate justice to those most affected by climate change, and we are committed to continuous improvement in pursuit of this objective.