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Welcome to the Carbon Stations podcast where we speak to some of the leading figures in
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the emerging carbon industry.
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Our guest today is the founder and CEO of Allied Offsets, Lars Kroyer.
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Lars, thanks so much for joining us on this show.
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It's a pleasure to have you.
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Now you work with Allied Offsets is without question very fascinating and we'll certainly
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get into that in just a bit.
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But before we do, I'd like to ask you to share a little bit about what you used to do before
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that.
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I know you have a very rich background in finance as a hedge fund manager and have written
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several books, one of which has the very intriguing title Money Mavericks Confessions of a Hedge
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Fund Manager.
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So please do share.
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Okay.
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Well, first of all, thanks for having me on.
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I'm very glad to be here.
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Yeah, I'm going to talk a little bit about who I am.
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I'm originally Danish, but did all my university and so forth in the US and ended up on Wall
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Street because I love it dead after and ended up in the hedge fund world.
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And so and this is like forever ago now.
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And in 2002, I started a hedge fund in London and did that for a while before incredibly
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luckily, frankly, returned capital to investors in early 08, in fact, January 08.
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So that was very good timing.
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And since then, I have invested in other hedge funds and sit on the board of a number of
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them and written a couple of books about finance.
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One as you said, I was actually kind of I didn't pick the title.
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I don't particularly like the title of confessions of a hedge fund manager, but it's the publisher
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who did that.
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But the whole concept there was like hedge funds was one of these things where everyone
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always seemed to think that anyone in the hedge fund drives the red Ferrari and drink
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$30,000 bottles of wine.
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And my reality had been extremely different from that, but also not uninteresting.
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And I thought it was kind of a cool idea to have a how does someone from like a disdain
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is kid end up running a large hedge fund in London?
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How did that happen?
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And I was able to tell that story as in the first person.
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So I signed up writing the book.
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And yeah, that was that.
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Then I wrote a second book because the first one I have done quite well, and there's sort
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of a separate thing I was always been very interested in.
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This is where people typically fall asleep.
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But I've always been very interested in optimal portfolio theory and how that relates to kind
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of like how should my mom or I should nonfinance professionals investor their money?
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How does that jive with like what does the theory say and how does that interact with
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the real world?
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I wrote a book about that.
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Yeah, so that's sort of and then a third one after that was very related to the second
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one.
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So yeah, so that was that.
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So then just an initial truth, which I still sit on board of a number of investment companies.
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But Allied Offsets then was this complete case of kind of serendipity really.
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I wanted to get involved in sounds so grandiose, I don't particularly like the term, but I
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wanted to get involved in poverty eradication.
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And we started this company called Allied Crowds.
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And originally we were trying to aggregate all the charitable and also non-charitable,
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but main charitable crowdfunding sites in the developing world.
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So they're saying, well, there should really be a meta side of sorts.
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But that business evolved into really doing technology solutions and sort of big data
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solutions for the likes of the World Bank, the UN.
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Actually our largest client for a while was the Islamic Development Bank, so it was in
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pretty interesting places.
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But then about three, four years ago, we completely randomly started looking at the voluntary
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carbon credit market.
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And we were doing a project for UNCDF, which is a part of the United Nations in West Africa.
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And I remember there was a coup in Burkina Faso, which is a particularly unhappy country
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in West Africa.
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And I remember reading that there were these carbon credits that were still being sold
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into Western Europe and North America and thinking, there's just no way.
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This is not a place that exports a lot of stuff, much less a valuable intangible asset
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during the midst of a coup and civil war.
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So I started looking into what on earth are carbon credits.
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And then like everyone else, we started with asking the first question that everyone asked,
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how do you get a ton of carbon in some place that costs $1 and in other places it costs
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$500?
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And what's a registry?
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What's a verifier?
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How do these things get sold?
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How do you prove that you only sell the number that you say you sell?
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How do you know that it's a ton?
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All that good stuff.
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But what we sort of overlaid that with was to say, look, where's all the information?
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Like where's the phone book?
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And because of the kind of work we had already done with the database work we had done with
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the parts of the UN, we were really well positioned to structure and make sense of very confusing
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assets that format and then look and make sense of spaghetti update.
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And so that's how Allied Offsets got started.
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And we basically said, how can we, within the voluntary carbon markets, how can we get
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as much information together as we can?
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We now have a chance all the time, but I think we have 25,000, 26,000 projects from 21 registries.
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And I think 500, 600, 700 projects that are not on registries versus mainly the CDR ones.
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And then because we have all that data and sort of structured it so it at least makes
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sense in our little heads, but we're now able to put a lot of data and analysis on top of
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that data, which some people find useful.
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Sort of like across projects, across geographies, methodologies, you can say, well, who's doing
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what, what, what prices are they paying?
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What have they therefore spend?
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How does that compare to their scope and missions?
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You can really go to town on a lot of analysis.
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But most, most importantly, we then have made all of that data more easily accessible to
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others.
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So if you think of us as trying to be on a good day with colossal, some Bloomberg on
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a bad day, you'd say we're sort of the phone book, phone book plus, I guess.
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But that's how we, how frankly, my background and, and, and how Allied offsets came, came
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to be.
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And yeah, we, we obviously have, but they're gonna last 18 months, seeing the space go
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absolutely through the shitter because of primarily all these issues around credibility,
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which has been extra fun for us.
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Fun is because we've seen a lot of our clients get hurt by it.
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But yeah, to give you an idea, a lot of the project managers are clients, but so are the
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some of the oil majors, but so is Greenpeace and the Guardian are clients.
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And so we've had multiple cases where the Guardian shits all over someone that's bought
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some credits and whoever's bought the credits might be our clients and the Guardians are
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clients.
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So I think, well, at least they agree on what the data is.
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They then disagree on the conclusions.
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And sometimes we certainly don't agree with all, all our clients say, but, but at least
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there is now like a common set of what are we looking at and then we can disagree on
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a lot of other stuff.
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But that gives you an idea of the kind of kind of things we do.
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We're very focused on price.
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You know, what are these, what are these kind of credits actually trade at?
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We're very focused on aggregating.
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We get ratings from five different ratings agencies and lots of other stuff.
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So that gives kind of an overview of who I am, who we are and what we do.
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And for what it's worth, we're, I keep saying three weeks, so let's call it four weeks today.
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So we're about a month away from publishing some work we have done on the supply of credits
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in the market, which I think is a very misunderstood thing.
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And I know you guys are very focused on the CDR space.
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I'll come to why it's very relevant for that.
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But the whole concept of, you know, what would at various prices, expected future prices
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for carbon credits, what can actually be supplied into the market?
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Now it depends on what type of credit it is, where it is, et cetera, et cetera.
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But we're building this very elaborate model where you say, well, at different prices,
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what is actually the gross supply of additional credits you can come up with?
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And can you prove that those are of the kind of quality you need to be able to prove that
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they are in order to sell them?
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And most importantly, how does that stack up against a future SPTI commitments or, you
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know, basically, well, think of it as a future demand and how sensitive is that demand to
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change in price and how sensitive it is to perceive quality?
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And what we're finding, and this is one of the key reasons why we're pretty bullish when
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the market is in such a horrible state, but what we're finding is there's definitely at
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low price carbon, I'm going to say low price, called below 25 bucks a ton, there is definitely
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a finite supply, which is a simple way to think of it is, you know, there are only so
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many cook stoves in the world, only so many potential forest projects in the world, you
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know, methane capture, et cetera, et cetera.
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And if you can believe that they will come, but that's a provable quality, it is still
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a basically rounding error.
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Instead of carbon credits coming to the market as a fraction of the sort of latent demand
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from corporates and others.
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And I think that's incredibly interesting because that suggests that there is some possibility
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that the prices will absolutely rip because there is the ability to keep supplying credits
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at below $25 is eventually very limited, and that's where you get into the CDR space, which
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depending on how you define by some of the others are, you know, maybe 4X that price.
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So we're working hard on that, but it's just one of the things we just kind of love working
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on.
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Sorry, that was very long winded, I'll shut up now.
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No, no, no, it's very welcome.
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I'm glad you shared so much of what you do and I'm really glad you mentioned the Guardian
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actually, especially with regard to carbon prices and carbon projects, because I don't
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know if you know this, but last year, like at the very end of December, I believe there
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was a new paper published which kind of completely debunked the Guardian's investigation and
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you know, which really cast a shadow on the VCM throughout all of 2023 basically.
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So there's this new paper with like, yeah, from like scientists from NASA and MIT and
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God knows what else.
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So yeah, that was kind of a positive end.
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Yeah, I agree.
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I mean, look, I think I think the main problem with the Guardian stuff is that the megaphone
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of the Guardian is 100 times larger than the megaphone of the voluntary carbon market.
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Yeah, there are lots of people that have I think some very convincingly debunked the
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work of the Guardian journalists, but you know, that then goes on LinkedIn to your 2000
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followers.
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When the Guardian writes something, it's the first thing the CEO of a would-be buyer knows
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to read.
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And you don't want to be called out by the Guardian and you can't point to your LinkedIn
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post by some scientists or by someone in the carbon market as you know, it's not been certified
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debunked.
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So I think that's why the Guardian and the likes of the Guardian, there's also the people
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that you know, basically ran all over South Pole, right?
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Yeah, that was in New York, the New Yorker magazine, you know, that's been the Wall Street
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Journal.
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So these very, very large global publications matters a lot more what they say than what
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the carbon, voluntary carbon markets say.
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So that's why I think we still have a problem.
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Of course, it's great news that this is debunkable.
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Now, the question really is it debunkable to the point where the Guardian at risk of
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a lawsuit withdraws the articles and those correction pieces saying, well, actually we
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were wrong.
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And that hasn't happened.
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So if you think of a, it sounds like an absurd example, but let's say that the Guardian published
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an article tomorrow saying, you know, did you realize that your Apple computer is made
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by child labor in China?
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Well, you know, that article would be pulled down within 30 minutes because it was provably
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wrong and it will be liable.
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And you better believe the Guardian that they didn't, Apple would come after them in a hell
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of a hurry unless the Guardian had really solid proof that that was in fact the case.
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Well, they based their investigation on science that was available at the time as well.
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Just it's now it's new science that, you know, but I think this is where it's interesting,
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right?
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Because you're absolutely right.
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There should be a shared facts.
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There should be some data, some science that can prove that these credits are real.
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And then there should be a way to disprove convincingly what the Guardian says.
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And if there is, it's great news for the space.
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It's the best news ever, right?
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Because that goes effectively to say, we can prove that a ton is a ton.
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And if a ton is a ton and you can pay $5 for it, are you kidding me?
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Let's just say we can all agree that to a standard of proof that say meets the same
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standards as audited financial accounts, right?
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So let's say we agree that that credit that I can sell to you for $5 or a project developer
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can sell you for $5 meets that standard.
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Everyone can agree that we should rather do 20 of that than one compliance credit that
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currently costs about $100.
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So when British always goes into the compliance market and buys a ton because they didn't
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meet their emissions target and they pay $100 for that ton, you know, eventually if it was
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as provable that that $5 ton was as good or was as certain to be one ton of actual carbon,
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00:15:45,120
then yeah, of course we should rather do that.
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00:15:48,040
And that would go a long way towards solving climate change.
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00:15:49,880
That's not what's happened in the last 18 months.
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00:15:56,000
I agree with you that A, it would be the best thing ever for the industry, but it's also
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00:16:05,160
beginning to be that kind of, you know, famous last words, but I wouldn't be surprised at
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00:16:06,160
the bottom.
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00:16:10,960
We've seen the bottom of the voluntary carbon market and things are beginning to come back.
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00:16:12,200
It'd be great news for the space.
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00:16:14,240
I personally also believe it.
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00:16:19,200
But I think what in any case is very helpful is that anyone who starts a carbon project
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00:16:27,080
now, whether it's a CDR or traditional VCM project, if you don't think you have to be
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00:16:32,200
able to prove that a ton is a ton to the standard of the Guardian calling you up and asking
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00:16:35,240
you to prove it, then you're just crazy.
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00:16:38,240
Because of course you should expect that level of proof.
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00:16:40,520
Traditionally, I don't think that's happened.
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00:16:45,920
Some of the old CDM credits are probably not to that standard if we're all being honest
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00:16:47,860
and some of the old stuff just isn't.
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00:16:51,040
Some of the newer stuff, yeah, they all know you can't prove it to that standard.
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00:16:51,040 -->
00:16:52,960
You're not going to get a lot of money for your credits.
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00:16:55,080
You don't do it.
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00:16:56,880
But I think that's very, very possible.
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00:16:59,320
So yeah, I'm a huge optimist.
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00:17:00,560
And I also think what else are we going to do?
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00:17:00,560 -->
00:17:01,560
Are we going to stop flying planes?
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00:17:01,560 -->
00:17:05,200
Are we going to tell Putin to throw fewer bombs?
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00:17:13,040
Wasn't last year like the largest emissions in history or something?
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00:17:13,040 -->
00:17:14,040
Close to it anyhow, right?
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00:17:18,440
Because as much as we go to cop and we say, oh, everyone's got a green solution to everything,
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00:17:21,440
like yeah, it's just not getting there.
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00:17:26,200
So the offset market, it's a tiny part, but in that it can contribute, it can become a
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00:17:28,000
very, very substantial part.
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00:17:31,880
And I think as much as, but of course we need to be able to prove that a ton is a ton.
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00:17:31,880 -->
00:17:37,200
Like what else have you had a successful industry where you can't actually prove that the product
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00:17:39,080
you're selling is what you're saying it is?
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00:17:39,080 -->
00:17:43,680
If you go to the supermarket and buy a pint of milk, you can prove that it's a pint and
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00:17:45,560
you can prove that it's milk.
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00:17:48,760
So you don't really have to check it every time because you know it's very approvable.
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00:17:53,920
And if we can get to the standard that when we say something is a ton of carbon, it's
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00:17:59,960
actually a ton of carbon, this space will explode and it'll do the world a ton of good.
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00:18:05,600
There'll be a lot of other communities that's on a good also, sort of almost on the side.
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00:18:05,600 -->
00:18:09,760
And if we can't do that, then we should get to the point where we can do it.
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00:18:09,760 -->
00:18:10,760
That's how I feel.
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00:18:10,760 -->
00:18:11,760
So I'm an optimist.
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00:18:11,760 -->
00:18:12,760
Yeah, absolutely.
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00:18:12,760 -->
00:18:13,760
I mean, the problem's been reached.
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00:18:19,640
And I'd say, you know, my old world of PE or investors, I started selling them.
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00:18:23,680
You should look at investing in some of these projects.
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00:18:23,680 -->
00:18:30,200
Like if you can create projects that can like generate a return for their investors at a
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00:18:36,120
price of say $5 to $7 a ton, absolutely you should do that.
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00:18:40,480
Because let's just for a minute think what happens to that return on capital.
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00:18:42,080
The price is $20 a ton.
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00:18:43,080
It's staggering.
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00:18:44,440
What if it's $50 a ton?
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00:18:47,360
You're going to make out like a bandit.
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00:18:47,360 -->
00:18:52,120
And right now, that hasn't happened in the last four or five years.
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00:18:58,040
A lot of people are sitting with massive, sometimes unrealized losses.
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00:19:02,320
But if you believe that this bottom has been reached, yeah, it can fly.
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00:19:02,320 -->
00:19:03,560
And I hope so.
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00:19:03,560 -->
00:19:06,680
But I also think there's good reason to think that it won't.
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00:19:06,680 -->
00:19:07,680
So yeah.
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00:19:07,680 -->
00:19:11,080
But of course, we've got to be able to prove that a ton is a ton.
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00:19:11,080 -->
00:19:12,080
Yeah.
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00:19:12,080 -->
00:19:16,040
How quickly do you see prices starting to rise and rise rapidly?
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00:19:16,040 -->
00:19:17,040
I don't know.
280
00:19:17,040 -->
00:19:18,040
It's hard to say.
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00:19:18,040 -->
00:19:22,360
You know, we've done one thing that's never shared with all of your listeners.
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00:19:26,760
We've done this what we call sentiment analysis.
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00:19:26,760 -->
00:19:29,960
And so what sentiment is, we've done it two ways.
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00:19:36,760
Actually, one is where we know we have a database of eight or 9,000 corporates.
285
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00:19:37,760
What are they retired?
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00:19:37,760 -->
00:19:38,760
Which credits?
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00:19:41,000
What do we think they paid?
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00:19:41,000 -->
00:19:44,680
How does that stack up against their emissions and so forth?
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00:19:44,680 -->
00:19:49,840
But what's kind of interesting is you keep track in the trailing 12 months, how many
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00:19:52,000
people have retired credits.
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00:19:52,000 -->
00:19:57,080
The reason that's interesting is it gives you a sense of how many corporates are net
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00:19:57,080 -->
00:19:59,840
coming into the market or exiting the market.
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00:19:59,840 -->
00:20:00,840
Right?
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00:20:00,840 -->
00:20:07,760
So if I told you in the last 12 months to today, you know, what, 3,000 companies have
295
00:20:07,760 -->
00:20:16,320
retired credits, but in the last 12 months till September 1, it was 3,600.
296
00:20:16,320 -->
00:20:21,880
Well, that suggests that 600 companies net have exited the market.
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00:20:21,880 -->
00:20:22,880
That's not great.
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00:20:22,880 -->
00:20:25,640
But what we're finding is that stopped happening.
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00:20:28,840
So people are coming into the market more than exiting the market.
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00:20:28,840 -->
00:20:33,760
And the average size of the emissions of those that have come into the market is high.
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00:20:33,760 -->
00:20:38,200
That's a good thing for sentiment, suggesting more and bigger companies are coming back
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00:20:38,200 -->
00:20:39,200
into the market.
303
00:20:39,200 -->
00:20:41,440
You know, is that a predictor?
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00:20:41,440 -->
00:20:48,000
It turns out it is a pretty decent predictor of sort of the one month later price.
305
00:20:48,000 -->
00:20:49,240
That's one way we're tracking.
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00:20:49,240 -->
00:20:50,840
We have sort of a bunch of parameters.
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00:20:50,840 -->
00:20:53,800
We're looking at what kind of credits are they buying.
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00:20:53,800 -->
00:20:59,000
The other thing is we did this and if anyone wants to be a part of it, I'd welcome it.
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00:20:59,000 -->
00:21:08,240
But we do this thing where we have a number of professionals from the space where we send
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00:21:08,240 -->
00:21:14,040
them an email every week and they, you know, how do you feel about the market between one
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00:21:14,040 -->
00:21:15,040
and 10?
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00:21:15,040 -->
00:21:17,360
You know, a little bit like when you go through the airport and you have to like, how happy
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00:21:17,360 -->
00:21:18,360
are you with the service?
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00:21:18,360 -->
00:21:20,360
Kind of you bang, you know, one of those smiley faces.
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00:21:20,360 -->
00:21:23,880
So think of it like one of those, but just there's 10 smiley faces all the way down
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00:21:25,720
to a really angry one.
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00:21:25,720 -->
00:21:30,480
And they just send the number and they say three or five or six or whatever they say.
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00:21:30,480 -->
00:21:34,320
And then we aggregate that and average it out and eliminate the highest and the lowest
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00:21:34,320 -->
00:21:35,600
and so on and so forth.
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00:21:35,600 -->
00:21:40,200
And that's a professional sentiment score.
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00:21:40,200 -->
00:21:45,200
And then we, because they do that to us, we send them the result immediately.
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00:21:45,200 -->
00:21:47,400
And that's pretty cool, right?
323
00:21:47,400 -->
00:21:52,480
Because that's a very good indicator of how is the space, how does the space feel about
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00:21:52,480 -->
00:21:54,280
the space.
325
00:21:54,280 -->
00:21:58,280
And that's also starting to, we've seen last couple of months started to pop in that.
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00:21:58,280 -->
00:22:02,880
I actually think that those two indicators together are pretty good predictor of, you
327
00:22:02,880 -->
00:22:04,480
know, are things going to get worse?
328
00:22:04,480 -->
00:22:11,360
And I feel somewhat comfortable that they're going to get better.
329
00:22:11,360 -->
00:22:13,480
I know how qualified that sounds.
330
00:22:13,480 -->
00:22:20,380
Well, I think you're probably the most qualified person to talk about that given the amount
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00:22:20,380 -->
00:22:22,240
of data you have access to.
332
00:22:22,240 -->
00:22:27,120
I think, look, isn't it just on the face of it, there are credits out there now.
333
00:22:27,120 -->
00:22:30,000
Ignoring quality for a second, which I know we can't.
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00:22:30,000 -->
00:22:34,040
But if you're not qualified for a second, I told you you can buy credits that someone
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00:22:34,040 -->
00:22:37,160
is going to look you straight in the eye and say, this is a ton of carbon and I'm selling
336
00:22:37,160 -->
00:22:39,200
it to you for $2.
337
00:22:39,200 -->
00:22:43,600
And you're like, that sure sounds cheap.
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00:22:43,600 -->
00:22:48,200
And then you realize that producers are spending $100 and there are lots of places in the world
339
00:22:48,200 -->
00:22:52,080
where the tax regimes are way above $2.
340
00:22:52,080 -->
00:22:56,640
And TDR credits are trading at whatever, hundreds of dollars, right?
341
00:22:56,640 -->
00:22:58,760
Sometimes very high number.
342
00:22:58,760 -->
00:23:02,320
Now it's almost like, well, what gives?
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00:23:02,320 -->
00:23:05,680
Is everyone else just stupid and the $2 is like the biggest steal ever?
344
00:23:05,680 -->
00:23:09,640
Or is there some sort of a discount because of perceived quality?
345
00:23:09,640 -->
00:23:11,840
Or is it because, you know, what's wrong?
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00:23:11,840 -->
00:23:12,840
Right.
347
00:23:12,840 -->
00:23:15,600
And are you missing an obvious trick?
348
00:23:15,600 -->
00:23:24,240
And I think if that $2 credit is convincingly provable that it isn't that $2, then yes,
349
00:23:24,240 -->
00:23:27,880
it could go very high very quick, right?
350
00:23:27,880 -->
00:23:30,080
Because the alternatives are way, way, way more expensive.
351
00:23:30,080 -->
00:23:31,080
They're more credible.
352
00:23:31,080 -->
00:23:36,480
So the CDR is considered way more credible in terms of their provability and obviously
353
00:23:36,480 -->
00:23:39,160
the compliance market is too.
354
00:23:39,160 -->
00:23:40,160
But that's what I'm saying.
355
00:23:40,160 -->
00:23:43,520
If we could get these credits up the curve of being believed, then there's a lot of upside.
356
00:23:43,520 -->
00:23:49,080
There's also, by the way, a couple of things I just want to mention.
357
00:23:49,080 -->
00:23:50,080
You look at all the ratings.
358
00:23:50,080 -->
00:23:56,560
So we have access to all the ratings, the K, the X, the Silvera, the B0s, et cetera.
359
00:23:56,560 -->
00:24:01,480
So the Stainer Craft and the Brunostra, I think, are the five.
360
00:24:01,480 -->
00:24:04,680
And also Beta will do a lot of really good work on this.
361
00:24:04,680 -->
00:24:10,160
But they, yeah, one of the issues in this space is they don't agree among themselves,
362
00:24:10,160 -->
00:24:11,160
right?
363
00:24:11,160 -->
00:24:15,600
So if you look at the ratings, rating the projects they rate, there's a fair amount
364
00:24:15,600 -->
00:24:18,520
of overlap because they all try to rate the biggest projects.
365
00:24:18,520 -->
00:24:19,520
They don't agree among themselves.
366
00:24:19,520 -->
00:24:25,400
It would be a little bit like S&P and Moody's rating a general electric bond and one says
367
00:24:25,400 -->
00:24:31,520
F and one says A. And you're like, what am I going to, what do I do now?
368
00:24:31,520 -->
00:24:34,080
Do I rate the raters?
369
00:24:34,080 -->
00:24:35,080
That's one issue.
370
00:24:35,080 -->
00:24:37,560
The second issue is there is, this is something we've done a lot of work on.
371
00:24:37,560 -->
00:24:44,240
We aggregate all the various tax regimes around the world.
372
00:24:44,240 -->
00:24:47,680
So I want to say it was 18 in our database.
373
00:24:47,680 -->
00:24:50,080
I wish Pundi was here.
374
00:24:50,080 -->
00:24:51,080
He's the one.
375
00:24:51,080 -->
00:24:52,080
Is it 18?
376
00:24:52,080 -->
00:24:54,280
15 to 18 tax regimes, right?
377
00:24:54,280 -->
00:25:00,920
And basically, you know, so as an example, you know, South Korea has a regime where certain
378
00:25:00,920 -->
00:25:05,880
types of credit is eligible for a certain amount of your compliance credits.
379
00:25:05,880 -->
00:25:11,800
Now, so even just tagging projects where that applies is very, very valuable.
380
00:25:11,800 -->
00:25:13,000
That's something we do, right?
381
00:25:13,000 -->
00:25:17,160
So if I tell you certain types of vintages for certain projects are eligible for the
382
00:25:17,160 -->
00:25:23,960
tax regimes, then it's almost, I think it flies a little bit in the face of the raters
383
00:25:23,960 -->
00:25:27,600
sometimes because it's almost like saying, well, I don't care what the raters say.
384
00:25:27,600 -->
00:25:30,160
The South Korean government says it's good enough.
385
00:25:30,160 -->
00:25:35,920
So that's its own set of issues there.
386
00:25:35,920 -->
00:25:40,280
But yeah, and that's again, there's one of those like who should gather that data.
387
00:25:40,280 -->
00:25:41,840
And I think it's people like us.
388
00:25:41,840 -->
00:25:43,760
Some of our peers do too, I'm sure.
389
00:25:43,760 -->
00:25:49,520
But like now, where else do you find the place where you can see which credits are eligible
390
00:25:49,520 -->
00:25:52,200
for which tax regime and which vintages?
391
00:25:52,200 -->
00:25:55,720
And that, by the way, changes all the time.
392
00:25:55,720 -->
00:26:04,360
So you can't, you probably shouldn't be active in the market unless you know that, right?
393
00:26:04,360 -->
00:26:07,520
Because imagine you're trading credits with someone who does know that and you don't,
394
00:26:07,520 -->
00:26:10,800
there's a very good chance you're going to get taken for a ride.
395
00:26:10,800 -->
00:26:11,800
That make sense?
396
00:26:11,800 -->
00:26:12,800
Yeah, it does.
397
00:26:12,800 -->
00:26:17,640
Speaking of like standardizations and rating agencies and such, I also wanted to pick your
398
00:26:17,640 -->
00:26:22,960
brain on Article 6 because a lot of people tend to have very differing opinions on that,
399
00:26:22,960 -->
00:26:27,880
at least in my experience, you know that there was no agreement reached at COP 28 on Article
400
00:26:27,880 -->
00:26:30,960
6.2 and Article 6.4 of the Paris Agreement.
401
00:26:30,960 -->
00:26:36,400
So do you believe this will hinder the development of the carbon markets or effect it in any
402
00:26:36,400 -->
00:26:38,720
way at all?
403
00:26:38,720 -->
00:26:47,160
Struggle how to think about Article 6 because I think there are so many questions that are
404
00:26:47,160 -->
00:26:50,080
very, very important that sort of should be determined.
405
00:26:50,080 -->
00:26:57,060
But the success of the scheme will depend on how those things get determined.
406
00:26:57,060 -->
00:27:03,040
One of the things is if you look at voluntary carbon projects, the whole idea is if you're
407
00:27:03,040 -->
00:27:04,960
the government, is it Gabon?
408
00:27:04,960 -->
00:27:09,360
They always mention as someone that's actually gone all in into the Article 6.
409
00:27:09,360 -->
00:27:15,680
So let's just say that Gabon has a net sequestration of say 100 credits to pick one.
410
00:27:15,680 -->
00:27:23,880
And now you and I create a carbon project in Gabon that whatever we say, it's five credits.
411
00:27:23,880 -->
00:27:25,440
Now does that go into Gabon?
412
00:27:25,440 -->
00:27:29,840
Does it get owned by the government or can we actually sell those five credits?
413
00:27:29,840 -->
00:27:34,360
In other words, is it part now of Gabon's score and how many of those fives do we get
414
00:27:34,360 -->
00:27:36,940
to keep?
415
00:27:36,940 -->
00:27:40,960
In some cases, that's a little bit unclear exactly who decides that in the process for
416
00:27:40,960 -->
00:27:45,600
deciding and I know in some cases the registries start tagging the project.
417
00:27:45,600 -->
00:27:51,640
So if I'm an investor into a carbon project in Gabon, I'd want to be really, really sure
418
00:27:51,640 -->
00:27:54,800
that I actually get to keep those credits or I'm never going to invest in the first
419
00:27:54,800 -->
00:27:55,800
place.
420
00:27:55,800 -->
00:27:57,880
That just seems insane.
421
00:27:57,880 -->
00:28:01,640
The second thing is like who did Gabon get to say these hundred dollars and where did
422
00:28:01,640 -->
00:28:02,640
that money go?
423
00:28:02,640 -->
00:28:09,440
So these hundred credits, like was that the government of Gabon, which no offense to Gabon,
424
00:28:09,440 -->
00:28:17,360
certain governments don't have a long history of reliable and good data management and this
425
00:28:17,360 -->
00:28:20,720
is an incredibly complex thing to get right and centralized.
426
00:28:20,720 -->
00:28:33,600
Then I'd also say it seems to me that the issue is we're a long way from these kind
427
00:28:33,600 -->
00:28:43,380
of Switzerland buying Gabon credits to be of any kind of size where it hurts the taxpayers
428
00:28:43,380 -->
00:28:45,120
or corporates in Switzerland.
429
00:28:45,120 -->
00:28:50,680
We're miles from that and for this system to work, we eventually have to get to a point
430
00:28:50,680 -->
00:28:56,960
where there's a tremendous transfer of wealth from the emitters to the Gabons of this world
431
00:28:56,960 -->
00:29:02,320
and I think that's going to be a very, very tough nut to crack, an important one to crack,
432
00:29:02,320 -->
00:29:05,920
but there's a lot of outstanding issues that don't have easy answers.
433
00:29:05,920 -->
00:29:11,640
The men that go into people that like driving big SUVs in Texas and telling them, well guess
434
00:29:11,640 -->
00:29:15,960
what you're all driving electric cars from now on and you're sending a lot of money to
435
00:29:15,960 -->
00:29:17,760
Gabon.
436
00:29:17,760 -->
00:29:22,440
That's one surefire way to make sure you're not going to be elected next time around.
437
00:29:22,440 -->
00:29:26,400
But eventually, maybe I'm oversimplifying, but there are some issues there that obviously
438
00:29:26,400 -->
00:29:33,360
are critical and they're going to like how that gets resolved.
439
00:29:33,360 -->
00:29:37,320
It's going to impact the VCM and some of them we study very, very closely and I think we're
440
00:29:37,320 -->
00:29:44,040
going to start tagging countries to say, well, how do they feel about all this stuff?
441
00:29:44,040 -->
00:29:50,480
But I think the issue with a lot of the global carbon market in general is very easy to shoot
442
00:29:50,480 -->
00:29:55,160
down solutions for being unrealistic or imprecise or hard to prove.
443
00:29:55,160 -->
00:29:59,280
But yeah, I don't think you should get to shoot down something until you come up with
444
00:29:59,280 -->
00:30:05,440
a better alternative or a solution because what are we going to do is just keep doing
445
00:30:05,440 -->
00:30:06,440
what we've been doing.
446
00:30:06,440 -->
00:30:10,000
That would be insane.
447
00:30:10,000 -->
00:30:12,160
So I think there's a lot of confusion.
448
00:30:12,160 -->
00:30:17,520
I think a lot of people had, well obviously I had big hopes for a cop that didn't quite
449
00:30:17,520 -->
00:30:18,520
come through.
450
00:30:18,520 -->
00:30:22,400
I know some of the people that I'm going to talk to, a bunch of the Article 6 folks,
451
00:30:22,400 -->
00:30:26,200
I know some of them are struggling because the big transactions aren't really happening
452
00:30:26,200 -->
00:30:29,440
and who exactly gets to take credit for what.
453
00:30:29,440 -->
00:30:36,000
It also hasn't really transpired in the way I think people hoped.
454
00:30:36,000 -->
00:30:39,680
And I also know, at least in my mind, maybe I'm being unfair, but some of the Article
455
00:30:39,680 -->
00:30:44,480
6, I call them that by the way instead of calling them out, but some of the Article
456
00:30:44,480 -->
00:30:50,200
6 had been I think unnecessarily denigrating of the voluntary carbon market, saying it's
457
00:30:50,200 -->
00:30:55,880
small, irrelevant and all shit and I think that's probably one great way to make sure
458
00:30:55,880 -->
00:30:59,840
that no one wants to work with you.
459
00:30:59,840 -->
00:31:00,840
And I also don't think that's true.
460
00:31:00,840 -->
00:31:05,920
There are very good reasons that it's small and historically it's been not as good as
461
00:31:05,920 -->
00:31:10,040
it can be, but I think the market is trying to remedy that.
462
00:31:10,040 -->
00:31:13,200
It'll probably need some regulatory help in some way.
463
00:31:13,200 -->
00:31:18,600
So I know I didn't answer your question, but I don't think there is a great answer.
464
00:31:18,600 -->
00:31:23,960
Well, while we're still on the subject of COP28, maybe you can share with us your impression
465
00:31:23,960 -->
00:31:29,320
of how much attention carbon markets in general are getting there, like carbon removal even.
466
00:31:29,320 -->
00:31:36,080
Yeah, look, so I'm very excited about CDR.
467
00:31:36,080 -->
00:31:41,960
And actually originally the reason we started spending a lot of...
468
00:31:41,960 -->
00:31:46,160
I'm just going to make a statement that I'm sure some of your friends will say, he's just
469
00:31:46,160 -->
00:31:47,320
crazy.
470
00:31:47,320 -->
00:31:52,880
We have the best and most complete database in the CDR space.
471
00:31:52,880 -->
00:31:54,720
That's the standard I want you to hold me to.
472
00:31:54,720 -->
00:31:57,480
If that's not true, tell me that it's not true and we can get there.
473
00:31:57,480 -->
00:31:59,520
So that's the standard you're going to hold me to.
474
00:31:59,520 -->
00:32:02,960
We have the best data in the world in the CDR space.
475
00:32:02,960 -->
00:32:06,120
Now why is CDR so important?
476
00:32:06,120 -->
00:32:12,920
So very rough numbers, this is very, very, very rough, so you can't hold me to it rough.
477
00:32:12,920 -->
00:32:18,400
The VCM market is about 0.2, whatever, 0.3% of global emissions.
478
00:32:18,400 -->
00:32:20,200
So it's rounding it.
479
00:32:20,200 -->
00:32:23,800
The CDR space is 0.1% of that.
480
00:32:23,800 -->
00:32:27,200
So it's like the rounding error of a rounding error, right?
481
00:32:27,200 -->
00:32:28,280
It's nowhere.
482
00:32:28,280 -->
00:32:29,640
So why is this so interesting?
483
00:32:29,640 -->
00:32:34,840
It's interesting because so far at least a lot of the CDR probably haven't suffered from
484
00:32:34,840 -->
00:32:37,960
the credibility issues that the traditional VCM market has.
485
00:32:37,960 -->
00:32:42,560
It's not like the Guardian is writing articles about the AC technologies that are just capturing
486
00:32:42,560 -->
00:32:43,560
nothing.
487
00:32:43,560 -->
00:32:47,600
But they're obviously ridiculously expensive, but it's obviously the big hope is in the
488
00:32:47,600 -->
00:32:49,600
scalability of this technology.
489
00:32:49,600 -->
00:32:52,800
I'm on the board of the Institute of Carbon Management.
490
00:32:52,800 -->
00:32:55,440
I have a project called Equatic.
491
00:32:55,440 -->
00:32:58,200
I'd encourage anyone to look at it.
492
00:32:58,200 -->
00:33:04,040
Very simplistically, they generate carbon from a mix of, there's some byproducts, but
493
00:33:04,040 -->
00:33:07,000
there's a mix of saltwater and sun, right?
494
00:33:07,000 -->
00:33:10,720
So I think we can all agree that that's two things that the world has enough of.
495
00:33:10,720 -->
00:33:16,520
And let's just say that a miracle cure happens and these guys come up with a way to do this
496
00:33:16,520 -->
00:33:21,400
at $100 a ton, which is not the case right now.
497
00:33:21,400 -->
00:33:23,440
But let's say they did.
498
00:33:23,440 -->
00:33:26,520
And that's how we cost them energy and basic physics and so forth.
499
00:33:26,520 -->
00:33:28,080
But let's just say they did.
500
00:33:28,080 -->
00:33:34,240
Or someone else smarter than the guys I know, which is pretty high bar by the way, but found
501
00:33:34,240 -->
00:33:36,160
a way to do that.
502
00:33:36,160 -->
00:33:44,840
So now you have a solution that in principle is unlimited scale, i.e. it's saltwater and
503
00:33:44,840 -->
00:33:47,360
solar power.
504
00:33:47,360 -->
00:33:51,360
And let's just say you could also catch and store the carbon or make it somehow miraculous
505
00:33:51,360 -->
00:33:52,440
as we go.
506
00:33:52,440 -->
00:33:56,640
Now for $100 a ton, you've sold climate change.
507
00:33:56,640 -->
00:33:59,520
That's like a miracle, right?
508
00:33:59,520 -->
00:34:03,840
Whoever came up with that should be richer than Warren Buffett or Elon Musk or whoever
509
00:34:03,840 -->
00:34:10,520
is the richest one around today because they have now priced climate change as insane as
510
00:34:10,520 -->
00:34:12,200
that sounds.
511
00:34:12,200 -->
00:34:14,400
That's just never going to happen in the VCM.
512
00:34:14,400 -->
00:34:17,640
A, because is it actually provable that it's $100 a ton?
513
00:34:17,640 -->
00:34:21,760
And B, because there are only so many cook stoves.
514
00:34:21,760 -->
00:34:28,680
That's not going to get us anywhere remotely near the kind of emissions reduction or capture
515
00:34:28,680 -->
00:34:31,640
that the world needs, not in a million years.
516
00:34:31,640 -->
00:34:36,720
But these CDR technologies, some of them have this scalability that the traditional VCM does
517
00:34:36,720 -->
00:34:40,000
not and it doesn't yet suffer from the credibility issues.
518
00:34:40,000 -->
00:34:42,000
I think that might change down the road.
519
00:34:42,000 -->
00:34:47,640
But of course anything you pay a lot of money for, you should meet the standard of you actually
520
00:34:47,640 -->
00:34:49,880
able to prove that it's $100 a ton.
521
00:34:49,880 -->
00:34:51,560
Again think of the pint of milk.
522
00:34:51,560 -->
00:34:54,480
You should be able to prove that it is what you say it is.
523
00:34:54,480 -->
00:34:57,040
Now that's why CDR is so interesting.
524
00:34:57,040 -->
00:35:00,160
A lot of these projects happen at research universities around the world.
525
00:35:00,160 -->
00:35:03,520
So by the way we created a database also of who owns all the patents.
526
00:35:03,520 -->
00:35:04,520
It's obvious, right?
527
00:35:04,520 -->
00:35:07,080
But how can you not know that?
528
00:35:07,080 -->
00:35:11,600
All these technologies that I think we have eight subsectors of CDR.
529
00:35:11,600 -->
00:35:18,600
This is stuff we're working together, we're publishing together a report on what are all
530
00:35:18,600 -->
00:35:22,880
these things and where do they sit and who owns the patents and who's actually buying
531
00:35:22,880 -->
00:35:23,880
the credits.
532
00:35:23,880 -->
00:35:27,000
So in other words, one of the things that happens to us a lot, we get these projects
533
00:35:27,000 -->
00:35:29,320
getting in touch and like, do you know who buys these things?
534
00:35:29,320 -->
00:35:30,800
We're like, yeah, here's a list.
535
00:35:30,800 -->
00:35:34,560
There's a list of 30 corporates that have bought CDR credits and paid a lot of money
536
00:35:34,560 -->
00:35:35,560
for it.
537
00:35:35,560 -->
00:35:39,240
You know, that's an ever expanding list.
538
00:35:39,240 -->
00:35:40,240
Let's put it that way.
539
00:35:40,240 -->
00:35:42,720
And here's another list of who invests in this stuff.
540
00:35:42,720 -->
00:35:45,400
And if you're interested in licensing the technology, here's another list.
541
00:35:45,400 -->
00:35:49,840
If you're a cement company, shouldn't you know what are all the latest and greatest
542
00:35:49,840 -->
00:35:52,720
things that happen in like cement storage?
543
00:35:52,720 -->
00:35:55,440
I mean, how can you not know that?
544
00:35:55,440 -->
00:35:56,440
There's a list.
545
00:35:56,440 -->
00:36:02,000
And yeah, that's the kind of stuff I think is really, really cool and see down issues.
546
00:36:02,000 -->
00:36:04,200
Of course, price is expensive.
547
00:36:04,200 -->
00:36:05,200
Absolutely.
548
00:36:05,200 -->
00:36:06,200
Yes.
549
00:36:06,200 -->
00:36:08,720
And I'm glad you did mention the report.
550
00:36:08,720 -->
00:36:13,640
And that is why I do believe that Allied Offsets has exceptional data because we are working
551
00:36:13,640 -->
00:36:19,240
carbon herald and Allied Offsets is working on publishing a report on the CDR market in
552
00:36:19,240 -->
00:36:21,320
general, which it's not quite ready yet.
553
00:36:21,320 -->
00:36:25,800
By the time the episode airs, it will certainly be available and there will be a link for
554
00:36:25,800 -->
00:36:27,280
it in the description.
555
00:36:27,280 -->
00:36:34,520
Basically, the main things there are pricing of CDR and the analysis of demand in the market,
556
00:36:34,520 -->
00:36:38,560
as well as something which is very interesting, which you touched on this like CDR within
557
00:36:38,560 -->
00:36:44,380
the broader VCM, its position there, policy, risks, competition, all that.
558
00:36:44,380 -->
00:36:50,400
So who would you say would benefit from it the most from a report like that?
559
00:36:50,400 -->
00:36:53,560
The CDR?
560
00:36:53,560 -->
00:36:57,120
I think it's like, well, all right.
561
00:36:57,120 -->
00:37:06,200
So I think hopefully the world, if the price has come down to a point where it's as provable
562
00:37:06,200 -->
00:37:12,200
as some of the compliance stuff, but also as comparable in price and scalable.
563
00:37:12,200 -->
00:37:13,880
Yes.
564
00:37:13,880 -->
00:37:20,480
I think these projects, some of the ones that do come up with good solutions will make just
565
00:37:20,480 -->
00:37:22,680
an absolute staggering amount of money.
566
00:37:22,680 -->
00:37:25,920
A lot of them, it'll probably be like a venture capital model where a lot of them are going
567
00:37:25,920 -->
00:37:28,720
to fail, but the few that succeed, succeed massively.
568
00:37:28,720 -->
00:37:33,040
So I think some of the corporates that are getting in early will have a head start.
569
00:37:33,040 -->
00:37:34,520
They will know this market.
570
00:37:34,520 -->
00:37:35,520
They will know the players.
571
00:37:35,520 -->
00:37:40,840
They'll have sometimes a very long off-tick agreements, but also knowing the technologies
572
00:37:40,840 -->
00:37:42,840
and have an intimate understanding of them.
573
00:37:42,840 -->
00:37:47,000
Don't know if it's public, so I won't say who, but like a very, very large, well-known
574
00:37:47,000 -->
00:37:49,560
brand bought a bunch of credits for these.
575
00:37:49,560 -->
00:37:57,560
These are quarter guys and they were extremely robust and exactly how the technology works
576
00:37:57,560 -->
00:38:01,120
and how they can apply it elsewhere in their business.
577
00:38:01,120 -->
00:38:08,160
So I think let's not forget, one of the huge benefits of the ZDR market is that they're
578
00:38:08,160 -->
00:38:11,600
trying to address an incredibly important problem.
579
00:38:11,600 -->
00:38:18,360
How do you catch and store CO2?
580
00:38:18,360 -->
00:38:21,280
Most people would agree that that's something the world needs.
581
00:38:21,280 -->
00:38:28,480
So I hope that the huge amount of investments going into the ZDR space will continue.
582
00:38:28,480 -->
00:38:34,160
And I have every faith that the functioning of the markets and a bunch of well-incentivized,
583
00:38:34,160 -->
00:38:40,240
brilliant scientists will come up with the best answers that are potentially available.
584
00:38:40,240 -->
00:38:43,920
So one of the reasons I worry about too much government intervention, I don't think that's
585
00:38:43,920 -->
00:38:48,280
a good, you know, I think this should be an incredibly, incredibly important.
586
00:38:48,280 -->
00:38:58,520
Agile space and I believe that's how the best innovations will be brought up, not by someone
587
00:38:58,520 -->
00:39:00,960
that they knew I'm making allocations.
588
00:39:00,960 -->
00:39:07,040
I worry like a little bit what that could mean in terms of some of the Article 6 stuff,
589
00:39:07,040 -->
00:39:09,320
but I don't know.
590
00:39:09,320 -->
00:39:10,400
It's hard to tell, right?
591
00:39:10,400 -->
00:39:13,960
It's also much in flux, but I do think it's a very good thing that people are putting
592
00:39:13,960 -->
00:39:15,480
money into these technologies.
593
00:39:15,480 -->
00:39:19,880
I hope like, you know, we're doing this thing for cement companies.
594
00:39:19,880 -->
00:39:20,880
That's what I keep hearing.
595
00:39:20,880 -->
00:39:26,000
But even think of any building company, like candy stores, carbon, they're all under pressure
596
00:39:26,000 -->
00:39:29,400
to doing more green infrastructure projects.
597
00:39:29,400 -->
00:39:33,800
And you know, they at least know what costs, right?
598
00:39:33,800 -->
00:39:38,360
What does it cost not to buy the credits, but to apply the technologies in your production?
599
00:39:38,360 -->
00:39:46,760
And even the fact that that's something that they should be looking at as a positive for
600
00:39:46,760 -->
00:39:50,720
the space, because that's like very, very real money.
601
00:39:50,720 -->
00:39:54,080
And yeah, there's a lot of that out there.
602
00:39:54,080 -->
00:39:57,920
So I'm positive, but we need to get on with it because it's still time and it's still
603
00:39:57,920 -->
00:39:58,920
very expensive.
604
00:39:58,920 -->
00:39:59,920
Yeah.
605
00:39:59,920 -->
00:40:01,600
Well, hopefully fast enough.
606
00:40:01,600 -->
00:40:02,600
Yeah.
607
00:40:02,600 -->
00:40:07,640
Another thing that I'd like to ask you before we wrap up this episode is what's in the pipeline
608
00:40:07,640 -->
00:40:09,400
for allied offsets?
609
00:40:09,400 -->
00:40:13,440
Are there any future plans or upcoming events that you can disclose?
610
00:40:13,440 -->
00:40:17,080
No, I mean, we're a funny business.
611
00:40:17,080 -->
00:40:21,000
We often get asked why are you the way you are?
612
00:40:21,000 -->
00:40:27,800
But we've never raised money from anyone.
613
00:40:27,800 -->
00:40:31,040
One of our peers, Trove, got bought by MSCI last year.
614
00:40:31,040 -->
00:40:33,560
So I'm not sure if people ask us what are your thoughts.
615
00:40:33,560 -->
00:40:39,160
I'd say one of the things we really love is we sit around and we talk about what we find
616
00:40:39,160 -->
00:40:44,200
fascinating and we run towards what we find most interesting.
617
00:40:44,200 -->
00:40:48,600
And that creates like a really cool work atmosphere.
618
00:40:48,600 -->
00:40:51,360
And I think that ultimately benefits our clients.
619
00:40:51,360 -->
00:40:56,920
We don't have like a, you know, what does the market really need in the next three years?
620
00:40:56,920 -->
00:40:58,040
And let's do only that.
621
00:40:58,040 -->
00:41:03,040
We have obviously some of that, but also an overlay of what do we think is most interesting
622
00:41:03,040 -->
00:41:06,920
given all this data we have access to, all this knowledge we have access to.
623
00:41:06,920 -->
00:41:12,880
So we're working on, in the next little while, I mentioned the supply model.
624
00:41:12,880 -->
00:41:17,960
I mentioned this regulatory thing is going to make a big difference, just an overview
625
00:41:17,960 -->
00:41:20,600
of what's where.
626
00:41:20,600 -->
00:41:22,400
We're about to publish a tradeable index.
627
00:41:22,400 -->
00:41:28,360
I can bore you to tears with why that's actually potentially very, very important.
628
00:41:28,360 -->
00:41:36,760
But they all have in common that we're trying to, through our work, lower the, as you say,
629
00:41:36,760 -->
00:41:45,120
lower the cost, information cost of the space and making it easier to operate in the voluntary
630
00:41:45,120 -->
00:41:46,120
carbon market space.
631
00:41:46,120 -->
00:41:52,260
And I sort of see the R in there by finding, understanding, exploring, analyzing everything.
632
00:41:52,260 -->
00:41:55,840
And that will be very helpful towards mitigating climate change.
633
00:41:55,840 -->
00:41:58,600
And that's our role in it.
634
00:41:58,600 -->
00:42:01,960
What that means for us as a corporate is not something that dominates our life.
635
00:42:01,960 -->
00:42:06,080
Because again, we don't have investors that say, oh, can I see a quarterly update?
636
00:42:06,080 -->
00:42:10,440
And I know some of my friends in this space, those like half their day or all of their
637
00:42:10,440 -->
00:42:13,080
days talking to past investors and future investors.
638
00:42:13,080 -->
00:42:15,400
We don't have any of that.
639
00:42:15,400 -->
00:42:18,920
I think it's net positive.
640
00:42:18,920 -->
00:42:23,240
And of course, sometimes it means we don't get the feedback loop we otherwise would get.
641
00:42:23,240 -->
00:42:28,920
But I enjoy that when you and I hang out now, I'm going to be working on a big Python model
642
00:42:28,920 -->
00:42:33,480
and not talking to giving a quarterly update to a bunch of investors.
643
00:42:33,480 -->
00:42:35,440
That's how we like to spend our days.
644
00:42:35,440 -->
00:42:38,280
I know it's privileged, but it's also pretty cool.
645
00:42:38,280 -->
00:42:39,720
And we love what we do.
646
00:42:39,720 -->
00:42:40,880
This is such a great space.
647
00:42:40,880 -->
00:42:47,040
I encourage anyone that's peripherally interested in the space, this can be the next, next thing
648
00:42:47,040 -->
00:42:49,440
if you're looking at your career.
649
00:42:49,440 -->
00:42:54,080
It's a great mix of sustainability, technology.
650
00:42:54,080 -->
00:42:58,000
There's even the development angle and there's certainly a finance and technology angle.
651
00:42:58,000 -->
00:43:04,040
If you look at young people leaving the likes of McKinsey and Goldman today, this is not
652
00:43:04,040 -->
00:43:06,040
a bad place to work.
653
00:43:06,040 -->
00:43:10,200
And so what's going to be a driver of growth in your career the next five, 10 years, but
654
00:43:10,200 -->
00:43:14,040
also what's going to provide a lot of meaning in your daily life?
655
00:43:14,040 -->
00:43:15,040
That's pretty cool.
656
00:43:15,040 -->
00:43:16,800
It's not a bad mix.
657
00:43:16,800 -->
00:43:21,640
There's certainly a tendency in the past couple of years for young people moving out of big
658
00:43:21,640 -->
00:43:26,560
tech companies, for example, and directing their efforts, their expertise towards climate.
659
00:43:26,560 -->
00:43:27,560
I agree.
660
00:43:27,560 -->
00:43:32,240
I mean, you could do a lot worse.
661
00:43:32,240 -->
00:43:37,040
I think it's obviously, don't forget, prices in the VCM went down like what, 80% in the
662
00:43:37,040 -->
00:43:38,040
last two years.
663
00:43:38,040 -->
00:43:42,480
So a lot of people didn't immediately take off in the way they have, but I'd say keep
664
00:43:42,480 -->
00:43:45,880
the faith because we haven't come up with a better alternative for now.
665
00:43:45,880 -->
00:43:48,040
And there's a lot of movement in this space.
666
00:43:48,040 -->
00:43:49,720
There's also a lot of hype.
667
00:43:49,720 -->
00:43:54,280
A lot of companies are probably going to run out of money at some point, but that's almost
668
00:43:54,280 -->
00:43:55,280
like the internet, right?
669
00:43:55,280 -->
00:43:56,280
The early days.
670
00:43:56,280 -->
00:43:59,400
It's like the first nuclear winter.
671
00:43:59,400 -->
00:44:02,920
Maybe that's sort of a rite of passage we also have to go through.
672
00:44:02,920 -->
00:44:03,920
Perhaps.
673
00:44:03,920 -->
00:44:06,680
But we'll be back.
674
00:44:06,680 -->
00:44:07,680
Let's hope so.
675
00:44:07,680 -->
00:44:12,120
Lars, I really appreciate you taking the time to have this wonderful conversation today
676
00:44:12,120 -->
00:44:16,600
and share so much of what you know about the state of the carbon market.
677
00:44:16,600 -->
00:44:17,600
Thank you so much for joining us.
678
00:44:17,600 -->
00:44:18,600
No, my pleasure.
679
00:44:18,600 -->
00:44:19,600
My pleasure.
680
00:44:19,600 -->
00:44:20,600
Yes.
681
00:44:20,600 -->
00:44:24,680
It was great to talk to you and I wish you a very exciting and successful 2024.
682
00:44:24,680 -->
00:44:25,680
Thank you.
683
00:44:25,680 -->
00:44:26,680
Thank you.
684
00:44:26,680 -->
00:44:27,680
Likewise.
685
00:44:27,680 -->
00:44:28,680
Thanks for having me.
686
00:44:28,680 -->
00:44:31,880
If you enjoyed this episode of the Carbon Stations podcast and would like to hear more
687
00:44:31,880 -->
00:44:34,680
conversations like this, please be sure to subscribe.
688
00:44:34,680 -->
00:44:42,480
We really appreciate the support.
