C (5:01)

Okay, so my name is Robin Burgess, and I'm going to be chairing the event tonight. And the key thing is that we leave time at the end for you to all ask questions. So just to sort of kick things off this, as Larry said, this is part of LSC Environment Week, which is, I think, in its fourth iteration. It's the core organizers of International Growth center, the Economics of Energy and Environment Program, and the Program on Innovation Diffusion. So all big research centered, but that involves all the parts of the LSC which work on sustainability. And it's exciting now to be grouped under this global school of Sustainability. But what's interesting about the week is it sort of came out of a reading group, I guess, five, six years ago during COVID where PhD students were interested in this topic. We organized it, then more PhD students got interested, and we had a seminar. And then we had a. And then we eventually had a conference, which has gotten bigger and bigger. But it's that energy of the students wanting this, which has then led to us teaching environmental economics in the department, which was really behind the week. And almost all the organization is done by PhD students, from selecting papers to organizing all this stuff. So I think that's the kind of key thing. This is something that was kind of demanded by the students, and it's quite big. It's like 27 academic talks, four sets of master lectures, three evening events. So it's a big, sort of become a big thing, and it's kind of bridging that world of research and policy. So that was just to kind of introduce the week for this evening. We're going into this thing of rethinking natural capital. And I just wanted to start with a personal anecdote of kind of interesting anecdote. So in 1996, I got involved in a project in the Scottish Highlands, which was a friend of mine has 22,000 acres of land in the Highlands, and he wanted to convert 5,000 acres to Caledonian Forest, which is the original forest that would have covered the Highlands. So we got some money from the Scottish government. We did that. We planted soil samples, planted trees. But the only real thing he gained was trees. So some amenity value, having trees on the land rather than just heather. And you had to protect them from deer and so forth. But it wasn't kind of a net benefit, apart from whatever value have from having the trees rather than not having the trees. So that's 96. And then you roll forward. The value of the property with the 22,000 acres was about £6 million. You roll forward to last year. Suddenly, out of the blue, he gets an offer from Oxford University for £30 million. They're willing to pay £30 million for this estate. He tries to figure out why the price has gone up so much. It turns out it was a Couple of things. One is you've got a lot of peat and the government will pay for peatland restoration and protection. The second thing is because it has all these sort of mountains, it goes into mountains, you can put wind farms there. So there's now measurement companies call things like natural capital, who will go around and measure your bit of land and work out what the value of that natural capital is. In this case, it was wind farms. And he also had a very fast river going through the estate which he's now generating electricity to sell to Scottish Electricity. So obviously the receptive government which wanted to integrate renewables into the Scottish grid. And so he spoke to his financial advisors and they said, don't sell, the price is going to go further up. So this is going from what was a shooting estate, loss making, shooting estate to this profit making thing. Nothing much has changed still, Heather, 6,000 acres of trees. The reason I bring that up is the second thing I want to say, which is measurement. The measurement of natural capital has just gone from leaps and bounds. Juliana was on our panelists. One of the leading people in the world, has worked on tropical deforestation restoration. That was only possible because we could measure this stuff using satellites and in ever finer detail. So many of the people in this room on the academic front are kind of involved in all sorts of very finely grained measurement, velification, you know, any form of environmental degradation. But in effect, we can measure across the whole world at a very, very fine level, emissions, sequestration and storage of carbon. And when you go into biodiversity, things get so carbon is getting easier and easier and easier. Biodiversity is much, much tougher. So about 20 years ago, when I was starting out as an assistant professor, I thought I'd get into that. So I went to the Zoological Society of London and asked, how do you measure biodiversity? So we go through the journal articles and look at what animals have been studied where. Now you can imagine the selection problems with that approach. Now things are improving quite quickly, but I would say that it is more difficult, but it's clearly something of value having more biodiversity and something which presumably the measurement will get better and better. And then the final thing I wanted to say is simply that this Environment Week is special because a group of advisors, two of whom are on the panel, have been called by the COP30 president to kind of bring in new ideas on the economic side. And one big part of that, interestingly, is on natural capital, and particularly the inclusion of natural capital into markets. So how can you bring in if you want to reduce carbon Emissions, for example, carbon into carbon markets. How do you make that more international and how do you make those markets work? So you kind of, if you think about this Scottish estate, it's moving from a situation where you just have, as Bart Harstadt said yesterday, the kind of economics of doing nothing. But it's moving from a negative value, somebody has to be rich enough to pay for the maintenance of that land to something that's attractive enough that it's profit making. And it's simply gone through the fact that there are now markets, in the case of this estate, both peat and electricity, which are allowing you to make a profit. And many countries across the world which have, for example, big tropical forests would like to be involved in those markets. And so that's one thing we're going to be kind of broaching. Okay, so let us now introduce the panel. First, Giuliana, I've already said he's one of the leading figures in the world working on tropical deforestation. He's head of the Climate Policy Initiative in Rio and also an associate professor of economics in Pukka and somebody I've always respected for their kind of very innovative methods of using cloud cover nut stuff to identify drivers of deforestation. So he's going to be doing the forest bit. And then Jim Leap, who is the head of the Ocean Solution Project in Stanford, we used to be the head of the World Wildlife Fund, is going to be talking about oceans. Oceans are super fascinating because they cover even a bigger area of the world than land and the conservation of oceans and how you include them into carbon markets and how that can drive greater protection of the oceans. It's really kind of a very new and exciting area. And then finally to kind of round things up, we're going to have Rohini Pandey, who's a professor of economics at Yale and head of the Economic Growth center there. And she'll be kind of talking about some of the principles of designing a unified, incredible carbon market. Okay, Giuliano.

D (13:03)

Thank you, Robin. Hi everyone. It's been a real pleasure to spend these days here. I've been learning quite a bit during these two very intense days what I'm going to present here. And I think I have a few slides. Is it coming? Is it here? So what I'm going to present here is a, is a new approach that allows us to. Oh yeah, that's the one. Let me just put in. Yeah, that's this new approach to measure something that the scientists have figure out a few years ago, which is the so called Flying rivers. Just to give an idea, I'm going to start with a picture by the great Sebastian Salgado. And this picture I know shows the Amazon forest. And the Amazon forest was named after the Amazon River. And it turns out that the Amazon forest contributes again to the water cycle through this intense moisture that flies over the forest and gets recharged once.

C (14:23)

The.

D (14:24)

Plants have the evapotranspiration. So the nature of this process is pretty much about one specific service that the forest provide, which is associated with the evapotranspiration itself. So we can think forest as a kind of a system that provides different layers of services. And today I'm going to talk not about the rivers that we are used to, but the so called flying rivers that are up there. That's Sebastian capturing this beautiful picture. And just to give an idea about how can you describe the phenomena? You can think about two different scenarios. On the scenario on the top, what you'll find is that you have the humidity that comes out of the ocean when it goes through the forest. This humidity through the winds gets recharged by the evapotranspiration, a way that the humidity goes farther away downwind. When you have a different scenario with the forested area, the humidity that comes from the ocean, it falls, you know, much closer to the ocean because it doesn't get recharged by the forest. Right. And this is how the forest plays the role of recycling water. And this combination of the evapotranspiration with atmospheric circulation, this determines the rainfall regime sometimes much far away from the forest itself. Right. So today I'm going to talk about, you know, a new approach that allows us to really measure this phenomenon. Right. The first attempt of measuring this using an econometric approach we implemented in this paper that I wrote with Rafael Araujo, Marine Rota Marine is a climate scientist, Angela Schenkman, who was here yesterday. In which, in order to measure and quantify the so called flying rivers, we rely on high frequency wind patterns, mostly from the Copernicus satellite system. And this information is available on an hourly basis for the whole world. And it's what they call the 3D kind of data set. You can have the wind trajectories for a different altitudes.

E (16:56)

Right.

D (16:56)

So we can really understand what's going on. And from that we can create a kind of a, we can write down a kind of a spatial model that will determine how one specific site will affect other places. Right. But just to give you an idea about what's really happening here, you can Think in a much simpler way in the following sense. And actually we are running some models that follow this idea that, you know, suppose that you are interested in rainfall in a given site. So what we do, we go up to 3,000 meters where you have the clouds that are relevant for precipitation in that site. And then we follow the wind trajectory that arrived in that particular site in that particular moment up to the Atlantic. So from that we can analyze to what extent the rainfall variation we observe in that site is associated with the number of, of pixels of forest, that wind pattern, that wind trajectory surpasses from the Atlantic up to that site. So from that you can really understand this connection between forest and rainfall region. So in this first paper we study what the literature has been calling the tipping point in the Amazon, which is the fact that sometimes when you degradate or you have deforestation in parts of the Amazon, this has an implication about through this mechanism. This might have an implication in terms of the rainfall patterns down the wind into the forest and that degradation can propagate to other parts of the forest. So we use this, in this first paper, we apply this method in order to understand this propagation of land degradation, land deforestation in the Amazon. And from that what we find is that on average there's a kind of a multiplier here that usually when you have a degradation, you have an impact of the same order of magnitude down the road. So the multiplier on average is 2. But there is a distribution of impact. And this map is showing two things. Once you have that matrix Omega, you can determine which areas are more exposed to the phenomena. So which is the map on B? There, these are the yellow areas are the areas that more exposed to degradation up river, up flying river. And the areas in yellow on panel A, they depict the areas that are more relevant in terms of their influence down the river. Right? So we can understand, you know, really the association between those two things. So that's, this is pretty much the approach that was published in this first paper. And now we are running in a series of applications of this approach for different areas. The first one has been in energy. In one of our co authors, Rafael, he wrote a paper studying a specific case in energy. Here I'm depicting the impact of those flying rivers on hydropower plants in Brazil. The dot points there, the black points, they are the hydrogen power plants that we have in Brazil. The orange ones are the 20 that are the largest ones. And you can see that 17 out of the 20 most important large hydro dams in Brazil, they are on the path of these flying rivers. We run a simulation that are finishing up a paper on the Bellomonte and the Taipu, which are the two largest one. And we found a significant impact, which is about if we put deforest. If you haven't deforested the Amazon. Right. If you put. Given this approach, you can simulate what would happen if deforestation hasn't happened in the region. And what we find is that 3,700 gigawatts hour has been lost per year due to this historical deforestation. This is equivalent of a lighting almost 2 million households in a given year. It's a significant impact. It's not something that will be a big disaster for the country, but it's something that is meaningful and significant. This is one way of looking at it. For this we have this quantification already. Well set. What's interesting as well is that the fact you can invert this analysis for each hydrodam, you can identify, given the distribution of winds, you can identify which parts of the forest are more relevant for each particular plant. Right. So can do that kind of quantification. And now you know the agenda, the research agenda is to apply this measurement in other areas. So for instance, in agriculture here in Brazil. A significant portion of agricultural productivity in Brazil is associated with the fact that in some places we can do second crop in a given year. And some place can do even a third crop in a given year. And if you look at these maps, you find that a significant portion of the areas of Brazil in which you can do soybean and a second crop is on the path of these flying rivers. So this creates a connection through this process between forest conservation, forest restoration and agriculture in Brazil. This is something that we are developing approaches in order to really measure that there are some tricky parts in terms of measurement, because the link between the forest and the rainfall is pretty straightforward. And it's developing in this approach. But to go from rainfall to the final output, this will depend on the application. So in energy generation is much simpler than in agriculture and others. And just to finishing up water supply in big urban centers will be also an impact. So you have Sao Paulo, which is a big bubble. There might be on this route as well. So it might be important. And also fires that we exploit and that you observe in some parts, especially in Pantanal, might be associated to it. Right. So I think what I'd like to start saying here is that now there is a way of measuring not only the carbon that we been learning so much, the evolution of this measurement, but Also the importance of forests to the rainfall regime that sometimes impacts areas that touch much far away from the forest, which creates some political. From the point of view of policymaking, or even the political constituency of those who are interested in. In conservation, it can change quite substantially. Thank you.

C (24:22)

These ones, ah, there are little.

E (24:27)

So I'm going to talk about the ocean. Famously, we are the blue planet. And that's for good reason. As I think all of you probably know, 70% of the surface of the Earth is ocean, which you probably haven't heard, but is perhaps more important as we talk about biodiversity, is that of course, we live in three dimensions. And if you look in three dimensions at the living space on Earth, 99% of that is in the ocean, because the oceans are very deep and the oceans are full of all sorts of creatures we have yet to discover, never mind to identify and name. And so that is the heart of this resource, right, is that here is 99% of living space. Here are depths that we have yet to explore. Here are resources and assets and values for our society that we have yet to fully understand. We know some things. We know that this natural capital is the source of food for 3 billion people around the world. It's the source of livelihoods for hundreds of millions of people around the world. We know it provides what one might call the mother of all ecosystem services. It has buffered us from the worst effects of climate change, absorbing 90% of the excess heat generated in a warming planet, absorbing 25 or 30% of the CO2 that we have generated over the last 180 years. It is literally true that if it were not for the ocean, we would already be toast. And so that's actually a vitally important part of what the ocean does for us. We think of that in this context. We think of it as bleaching coral reefs, that this CO2, that this warming is destroying coral reefs all over the world. And that is true. We are in the middle of the worst coral bleaching event in history. It started in 2023. It has affected 84% of all the reefs around the world. But it's not just a problem of coral reefs. In 2013, this huge mass of hot water parked off the Pacific coast of North America and it sat there for nearly three years, water that was 3 or 4 degrees Celsius above its normal temperatures. It decimated fisheries and displaced many others. It killed about 4 million seabirds. And it is an indication of what is to come, that as the climate continues to change, we will see and the ocean continues to warm. We will see more and more of those kinds of extremes. It's not just CO2. Our waste shows up in every corner of the sea. Plastic gets the most attention. But of course, other pollutants that flow from the land into the ocean are a serious problem, especially in many localities around the world. When you think of the ocean, come on, admit it, mostly you think of this, or at least most people do. We think of going to the sea and we think about the beach, and beaches are great, super important to all of us. But it's, of course, the very margin of the ocean and we have very little idea what's happening over that horizon. So on the vast proportion of the surface of the sea, it's very hard to know very much about what's going on. Satellites are telling us more than we used to know, but still not a lot. And of course, once you get below the surface, if you go very far below the surface, you need very fancy equipment to get the occasional glimpse of what's happening down there and what lives down there. And that means that chronically, for all of us as members of the public, as consumers, as voters, but also for governments and others, the ocean is over and over again, out of sight and out of mind and neglected in policy making of all kinds. And so, as we think about valuing natural capital when it comes to the ocean, it is okay. How do we begin to capture the value of these ecosystems for the things we care about for us and for the future of the planet? And how do we begin to inspire the action it takes to sustain these ecosystems in as healthy a form as is possible in a time of upheaval? So that's partly about blue carbon. And I am very, very happy that the next speaker knows a lot about carbon markets and she can tell you a lot about what's coming together. No pressure, Rohini, she can tell you a lot about what's coming together to actually get resources into carbon ecosystems in the ocean. Mangroves and seagrass beds, salt marshes, are very rich in carbon sequestration, much richer than rainforests. Four to 15 times as much carbon sequestered because they put so much into the soil. So very rich, just not very numerous. So Giuliano has 13 million square kilometers of tropical forest around the world.

D (29:20)

1 billion, sorry, 1.2 billion hectares. Hectares.

E (29:24)

Hectarects. Yeah, yeah, yeah. So we'll stick in hectares. And there is. Now, I have to do the math. There is only 50 million hectares of blue carbon ecosystems. So it's a tiny, tiny fraction, very Powerful and very important in those places, but limited in its total contribution. I think in this area, as in other areas of natural capital, I mean, the real power, the natural capital lens, is to help us recognize that there are multiple benefits from these ecosystems and we shouldn't hook our future to any single one of them. We should recognize that the power is in that combination. And as you look at blue carbon ecosystems, you take mangrove, seagrass beds, salt marshes, you add in coral reefs, and these are the engines of biodiversity in the sea. And they are the cornerstone of much of the value in ocean resources. So that's, of course, food. 95% of commercial fisheries depend on these coastal ecosystems. It's also, of course, tourism and the other things we love about coral reefs among the most diverse ecosystems on Earth, it's also increasingly coastal protection by coral reefs, by mangroves, as in a time of increasingly violent storms, these ecosystems actually protect the people who live near the shore. But there is a more fundamental problem in oceans, and you may have guessed this from what I said at the beginning, which is we're still not paying attention. So that I think the core challenge here is how do we elevate oceans on the agendas of decision makers who matter? And one challenge here is that in almost every country, except for a few small island states, fisheries ministers or ocean ministers are at the very margins of power, right? None of them is at the grownups table in governments, the table where the big decisions are made. And that means our challenge is how do you elevate these issues beyond the scope of the oceans or fisheries minister and into issues that are relevant to the priorities of health ministers and development ministers, finance ministers and prime ministers. And so one avenue for doing that is, and just as an example, is work done over the last several years on blue foods. And this is to help people recognize that fisheries and aquaculture, which sound like the business of the fisheries minister, are in fact vitally important to core national priorities, to nutrition challenges, to livelihoods in some of the poorest forest communities in many countries, to actually dealing with climate change with products that absorb carbon and don't produce it. With gender issues, there are big, big issues of gender across the blue food sector and even with forests, because to the extent that we can help people move away from beef, for example, and to more into fish, there is a chance to actually reduce pressure on some of the forest. So let me just say quickly a little bit about how this agenda is taking shape. So this work started with something called the Blue Food Assessment. This was the work of 100 researchers from 25 institutions around the world. It was eight papers published by Nature in the lead into the UN Food System Summit. And the whole purpose of this research was to begin to look at fisheries and aquaculture in terms that would resonate with food policymakers, that would help them understand relevance to their discussions. And this is just one example. This is from the paper in Nature about nutrition from blue foods. Don't worry about the specifics. All you need to know is that there are a whole stack of blue categories of blue food that are richer in all these nutrients than any terrestrial animal source protein, right? That are richer than beef or pork or chicken, and that's small pelagic fish, sardines and anchovies. It's large pelagic fish like tuna, its clams, mussels and so forth. To take a couple of examples, research a few years ago found that many coastal nations around the world could solve the nutrient deficiencies that affect their children by making better use of the fish in their coastal waters. Doesn't mean they have to stop exporting fish. In some cases it was a question of just reallocating 20% of the catch for domestic consumption. But there are real solutions in the waters of those countries. This is one example of this. It's actually a farmed fish used in aquaculture. But in Bangladesh, this little indigenous fish is accountable for a third of the zinc, half the iron and 98% of the vitamin A in the national diet. So These are opportunities, 2,500 different species we're talking about here. These are opportunities to solve really fundamental challenges in many countries and then just quickly to show how that hits the ground. Following on that global blue food assessment, Indonesia announced that it was going to bring blue foods into the heart of its national development plan. This is the fourth largest country in the world and into their strategy for transforming their food system. From a biodiversity perspective, this is a bull's eye, right? Indonesia is absolutely at the epicenter of marine biodiversity around the world, whether you're looking at fish or plants or coral reefs. And so Indonesia then set out to do a blue food assessment of its country that gives you possibilities that you don't have at a global level. And this is just one example. My only graph, which is it just shows you for in gold are the terrestrial sources of protein, including tempeh and tofu and eggs, as well as chicken, beef and. And then the blue are wild capture fisheries. But you can see across a whole bunch of nutrients, the fish are just wildly more nutritious than those terrestrial sources. Of protein. That's the opportunity that they see in Indonesia. Take one example, this fish, you can see a single serving is a home run in terms of nutrition for a whole bunch of categories and it is cheaper than chicken. Where this is taking Indonesia is that blue foods are now integrated into their national development strategy. They're now integrated into the food system transformation strategy. The government has announced a nationwide program for free school meals and free meals for pregnant women, mothers and infants to combat stunting. A lot to do to turn that ambition into reality, but they're putting blue foods into the midst of that program because they realize this nutrition can really make a difference for the challenges they face. 21% stunting and 60% percent malnutrition across the country. And that's part of elevating blue foods and therefore ocean ecosystems on the agenda of a government to help them realize that this is natural capital. That's really valuable. Thank you.

A (36:21)

Thanks. This is a hard act to follow. So what I want to do today was really talk about some of the ongoing discussions and some of the active markets that try to think about how do you bring in nature based carbon into markets. And so I should start by apologizing, especially given the Jim's description of out of sight, out of mind. This is in a lot of ways a very narrow way of identifying what matters. So we're focusing just on carbon, not on the many ways in which biodiversity impacts outcomes. But I think this is a place that has been active, but it's also a place that is still in a lot of need of how to make it function at the potential that it needs to. Robin gave us a very hopeful example from the Scottish Highlands. But you know, I suspect some reaction could be that even as the price rises may well still be undervalued by what it should be given the services it's providing. So what I'm going to talk about is based on many of you yesterday heard Professor Sheinkman talk about the set of submissions that are being made to COP30. So I, together with Robin Mariam Farbudi at MIT and Lucy Pager UPIT have been putting together one such proposal which is really to think about how do you try to bring nature based projects into global carbon markets. That's not good. Jim's pretty pictures eat up all the computer. So I think, as you heard, and again, I think this is an under explanation given all the benefits, for instance that come from tropical forests that Giuliano talked about. But just to give you a sense of the scale in 2023, global tropical primary forest loss produced 2.4 gigatons of CO2 emissions. This is roughly half of the United States annual fossil fuel emissions. And if you think about it from a perspective of development, there's now, I think, a very mainstream discussion about the energy transition, about the fact that as you get richer, you're going to use more energy. And that's a big concern in thinking about how do we move these countries on renewables. But there is also another form of transition that happens when you develop, which has to do with land use. You're more likely to cut down trees, develop roads, develop infrastructure. And what we are arguing is that part of trying to address how you reduce emissions in the air has to come by thinking about how do we give sustainable parts of development that don't rely on this amount of deforestation in large part because today it's one of the cheapest forms we know of how to reduce emissions going into the atmosphere. There's been, on a small scale, I'd say, lots of work on thinking about how do you provide incentives to individual owners of forests or trees to not cut them down. And we know that you can have payments for ecosystems that achieve some of this. But I think we've also learned over the last few years that you know the quality of the forest you may have, you may not want to give it at a very cheap price if you were going to cut it to build a large dam. So the people who are going to enter the market, the forest first, when you say, I'm going to pay you for not cutting down trees, are going to be those who are not going to cut down the trees anyway. They just get some free money. And this is the problem, what we call is this non additionality. Moreover, in order for us, especially when we think about, say, reforestation projects, which are an important part, for instance, the Amazon, you need to think about how long it's going to take for those trees to grow and become potentially carbon sinks. And that means trying to think about people's incentives over time. So what we've seen over the last two decades is an emergence of a voluntary carbon market that seeks to provide climate financing of this form to prevent landowners from cutting down trees to encourage reforestation. But it's challenging precisely because you don't know the incentives of those who enter the market. And so what you see is over the last few years, we've seen a huge crash in voluntary carbon market prices. And that's what led me to tell Robin that perhaps the trees that he started growing with his friend in 1996 are undervalued, but maybe they should also not be in the market at all if they're not going to get cut in any case. Right. And what we've also seen that this is a very decentralized market with many registries with non standard measurement and verification systems. And then the final concern is when you look in the voluntary carbon market, the way you should think about it is maybe you're taking a flight, you're feeling bad about taking a flight and you pay for emissions to go to zero. That may help you as an individual become net zero, but it doesn't provide us a pathway towards any global target. So what's the alternative and where do we want to head towards? So the alternative is what we would call compliance markets for emissions. And we've seen these now come up across the world. The way they work is you would have a set of industries and you would say all together, this is the total amount of emissions you're allowed to emit. You may start by giving companies a certain number of permits. They can exchange those permits where each permit is one ton of carbon you're allowed to emit. And then depending on what alternative uses one has for production capacity, you may choose to sell permits and just say reduce production or change move to renewable gas or you might buy permits. And that gives you a single price in the market which tells you what the marginal abatement cost for carbon is. This is the prices that you see in the EU emissions trading market from 2016 to 2025. And what you see, this is a market that works unlike the previous slide. Let me just go back to that for a second, where you saw a decline in prices over time. So the dark blue line is nature based credits. That's something like forests. Just to look at it right now, in 2023 it was trading at something like $3. It's now trading more at something like $7. Not very high. If you contrast it with the European Union EU ETS carbon market, a ton of CO2 emission avoided trades for €77 right now. So this is a market that has, it's not at the social cost of carbon yet, but it's relatively high and it is sending a durable signal about what carbon should be priced at. And so I think there's a general agreement that compliance markets design as emissions trading systems can both sustain high prices and are trusted by the demand side. Buyers are willing to trust that what they're getting in this market when they buy a permit is a single permit. And so what our work has been about is to ask how can we, how can we move the voluntary carbon market towards being integrated into a carbon market of the kind that we see for industrial emissions? And one important feature of why you would want to do that is if you can do it and have a single price for carbon that buyers can believe, then they don't have to go about trying to figure out what the quality of different products is. Is this a tree that would have been cut if they hadn't paid for it? They can just go to the market and buy a single unit of carbon. Just as, you know, we go to the market and buy many things that, you know, we think an apple is an apple when we see it may differ in quality, but we know it. The other promising feature that we're seeing is that emissions trading markets are expanding very Fast. So in 2025 there were 37 emissions trading markets. They're typically domestic markets. So EU ETS is arguably the largest market in terms of scale. But you'll have regional markets, for instance in California, or you also have now a set of middle income countries heading towards markets. So in addition to these 37 emissions trading markets that cover 23% of global emissions, you have 12 more under development, another 12 under serious consideration. I've talked about how these emissions markets work, but a key feature that I think is central to what we argue needs to happen if you're going to bring nature based projects into a market where industrial emissions are being considered, is that you need to have a standardization and you need to have identically priced emissions being traded. So just to give you a sense of if you could achieve this, and that's always the big if, what would be the value of it? So this is a calculation that we've done based on existing data and based on estimates from the paper described below. If we took today forest based projects in lower income countries and we said we could pay for them and that those were credible payments that actually prevented deforestation, these estimates allow for some amount of non additionality, but you know, it can't be 100% then half of the entire EU ETS budget for 2026, which is 0.6 billion tons, could be eliminated for $39 per ton. And that's roughly half the price of the current ETS permit. So you can see, as economists would say, there are huge gains from trade if we can figure a way to bring these forest based projects into a compliance market. So what's it going to take to have a compliance market? The Advantage if you can do this is not that you're going to have rich countries buying up all the cheapest projects in low income countries, leaving them with no way to deal with emissions in the future. The aim would be to have an emissions market in which once you enter, you recognize that over time as say an industrial producer in a rich country, you may have to move from being able to buy forests in Zambia to have to cut your own emissions in 10 years time. But that time horizon is valuable. It's the amount of time it can take for innovation, for happen, for R and D, to make it cheaper, for as Jose said yesterday, for, you know, Bill Gates magic machine to become functional. But for this market to work, we are going to need to manage the risks. And this is a place where at least we argue that market design economists can play an important role in thinking about how do you manage these risks that come with projects. So in a typical market you think about measurement reporting and verification, we think you want to think of a different R, which is risk mitigation. So I don't know if anyone recognizes the picture on the side. Anyone seen Hitchhiker's Guide to the Galaxy? So this was the paranoid robot in that Marvin. And so we've proposed that if you want this market to work, what you're going to need is a centralized institution that's going to be responsible for measurement, accounting, risk mitigation and verification. Their job would be to standardize the measurement that right now happens by lots of different institutions in different places and in a very non transparent way. So that's one thing they're going to do. And I think as Robin mentioned and Juliana highlighted, there's been huge developments in measurement. Satellite imagery now makes it possible to really standardize measurement, but it's going to be important to have a centralized protocol that is fully transparent. The second thing that Marvin will do is have to identify, and this is where the economists can play a role, is what are the kind of contracts that can help us mitigate risk? How do we have dynamic contracts that can ensure that a forest carbon project developer is going to maintain their projects over time? Should it be that we give out payments for these projects as forgivable loans where if at some point in time our measurement tells us that there's no more carbon being stored, you just stop, you ask for the payments to be returned and then there's also going to be risk in these projects that's going to not be the sort of private risk where I choose to behave badly, but rather they're just the fire and the forest burns down, who's going to bear that risk? And for that we're going to need to think about how insurance mechanisms exist right now because we don't have and ability to deal with this risk. What is happening is that attempts to improve this market are largely functioning by removing risky projects from it. So for instance, right now many of the protocols, core carbon principles that are being implemented in the voluntary carbon market say that for instance, introducing renewable projects or introducing deforestation projects is too risky, but the cost for us of keeping them out of the market is too high. And so our proposal is to say that we need to think about how we can harness the best from many disciplines, from the sciences when it comes to how we measure carbon emissions and carbon storage, from economics, when we think about risk management. And then, and I haven't talked about it, you know, think about learnings from political science and governance and how do we manage payments to communicate communities. And we're going to need all of this in order to have a way of getting nature based projects into regular compliance emission markets, both so that we can pay for the cheapest emissions first, which is critical when we have limited climate financing, but also something that hopefully over time we can build on to start pricing other aspects of natural capital like biodiversity and the many other aspects that Jim and Julian have talked about. So I'll stop there now. Thank you very much.

C (51:03)

Okay, so I think I'm just going to ask the panel one question and then we'll go to you guys asking questions. I guess the question I kept going through my mind is political economy and scale, the role of political jurisdiction. So we come, if you think about the environment movement, a lot of that was NGOs, activists. They found it difficult to achieve scale. Right. I guess if we just start, maybe in reverse order, how important is it that you convince like a head of the state to take on ocean conservation? How important is that? If we don't do that, if it's all going through NGOs and civil society, are we going to get to where we're going to go?

A (51:52)

Maybe.

C (51:52)

Rohini, a few stories.

A (51:57)

So I recently was at a talk which I was very struck by. It was someone who was trying to describe the distinction between where they thought climate change policy was going and where environmental justice was going. So the description they gave is the solar industry. They were like, you know, things like solar industry now are quite profitable. There are people who are buying up land, placing all these solar panels on it. They're getting these large solar Farms, they have a lot of subsidies from the government, but you know, they're taking the land that's going to be not usable in 10 years time and the citizens get no benefits. And so I think a critical part of having nature based solutions through markets that work is to ensure that both the communities have a say in what's done, but also clear mechanisms of payment at high enough prices. The concern right now is the prices can be very low. And in the end I think it has to be something that states negotiate on behalf of their citizens. It's very hard for a single community to ever negotiate. What should be the price? That is the floor price for a nature based project. What's the minimum price you should have if you're telling someone in the Amazon to not cattle ranch and instead let their forest stand? And in the end I think those negotiations are going to end up being global in nature because that's the nature of how a lot of this climate financing is going ahead and I think has to be done by countries.

E (53:33)

Okay, so this is a really important question, I would say on most of these issues. So ocean conservation, forest conservation, carbon markets, climate action. Ultimately we need governments to step up to do their jobs.

C (53:46)

Right.

E (53:47)

And so I think the hard question for us for 30 years now has been how do we actually get that? How do we get to the point that governments are stepping up to do what we need them to do? And there have been repeatedly been some governments willing to move and never the sort of majority that actually unanimity we need to actually to get there. So I think the way I think about private sector, civil society, creative coalitions is that they can be part of both showing the way and creating the momentum and maybe creating the political space for governments to do what we need them to do. And that can be demonstrating approaches that begin to show credibility and show power and then can be embraced, embraced by a growing number of governments. It can be approaches that create a sort of market demand for government action in a new way. But I think we have to be looking at how we get to a healthy dynamic between those two streams of action and not cast our lot with one or the other.

C (54:45)

Right.

D (54:49)

Yeah. I think I'm going to exploit the example from Brazil and from my own experience on the cpi. Because the Climate Policy Initiative is not a research institute. It's an organization that is dedicated to improving climate policy. And when you look at these, we decided to embrace this agenda of the flying rivers. Exactly. Because it provided a different way of approaching forest conservation. Just to give a Very specific example based on those estimates that I showed here, we started a series of conversations with the energy planning part of the government and also with the big companies on the energy sector. And they got surprised because they were primarily focused on their own on the river banks that are directly associated with their hydro dams. And what we showed is that there are all the parts, other pieces of forest that are also relevant to your, to your operation that is, you know, thousands of kilometers away from the project itself. Right. So, and in the end of this process, I think we are about to bring to cop, using COP and kind of a momentum for that, a kind of op ed and a piece that will be written by the energy sector asking the government to increase protection and to deal better with deforestation. Right. So I think that being able to show these links that connects, you know, nature with people's lives. I think it's crucially important, especially when you take into account this important question about the political economy of how these decisions are making. And I think, you know, measurement provides a very tangible way of implementing that.

C (56:46)

It would be a first if the soybean farmers and the cattle farmers write to the. Okay, so I think we've got exactly half an hour and there's a lot of people. So I think if we could take questions in threes or something like that, lots of hands, so maybe start to the next nearest one and then we'll move across and make sure you raise your hand up in the. Keep an eye on you there. And it's also online. Okay, let's do it. I think we're going to have enough questions. Okay, go ahead. And if you can say who you are, maybe just very briefly.

A (57:23)

Sure. Can you hear me? Yeah, Zamira from the World Business Council for Sustainable Development. My question is to all the panelists and thank you for your presentations. In the run up to question COP30, we're hearing a lot about the concept of bioeconomy, including from the presidency. So I would welcome your views on how it links to the concept of natural capital and its usefulness, but also its limitations for engaging people on these topics. Thank you.

C (57:48)

Okay, so there's a gentleman where this gentleman.

D (57:57)

Hello, my name is Abhishek, I'm a spokesman postgraduate student here at lse and thank you so much for your presentation. When with the concept of the, the flying rivers, I wonder if there is a connection to untimely rains as well. And especially when we think about coming from India, when we think about things.

A (58:18)

Like.

D (58:20)

These barren lands or these lands which did not get rains in specific seasons, but are now getting rains in specific seasons if they are connected to this concept as well. And if there is some kind of financing mechanism when it comes to insurance there, because the government provides crop insurance to farmers in India and that's. That load, especially on soybean.

A (58:43)

Soybean farmers has been increasing a lot recently.

D (58:46)

So if that connection exists and if that can be exploited.

C (58:51)

So just you move the mic there and then.

D (58:53)

Thank you and thank you very much for the presentations. I'm Joaquin Salzberg. I'm mostly related to biodiversity negotiations actually.

A (59:03)

And my question is, it was very.

D (59:05)

Interesting seeing a different experiences of how to work around the idea of valuing natural capital. And I was remembering that during the negotiations of the Global Biodiversity Framework, there.

A (59:18)

Was a lot of talk about trying.

D (59:20)

To have for biodiversity an apex target.

A (59:23)

As you have for climate.

D (59:24)

Right.

A (59:25)

2 degrees, 1.5.

D (59:26)

Biodiversity mainly relies on area and it's not very useful because, for example, 5,000 acres in the Highlands, it's very different from 5,000 acres in the Amazon. So and now we have 23 targets. I mean, it's. It's very complicated. My question is, with all these developments and your work, do you think that we could see in a future nature capital and valuing nature capital playing a role in trying to say world where the world wants to be in terms of biodiversity? It's around that.

C (60:00)

Thank you. Great. Okay, so let's maybe. Yeah, I think that's enough. Whoever wants to go with.

E (60:11)

Which one.

D (60:11)

Do you want to pick? I'm going to pick the flying rivers on the India. I think your intuition is right in terms of. There is one possible application of this kind of exercises through an insurance mechanism because you're changing the distribution of rainfall down the river. Said that the mechanism, the existence of this mechanism is very specific to the context. Right. In the case of the Amazon, we have these. The trajectory, the way of the winds and the Andes in the ocean in a way that connects the Amazon forest with the rest of the country. For the case of India, I think it would be important to understand where are the forests and how the specifics of it. But the impact of forests on rainfall through this mechanism, definitely, especially depending on how significant deforestation definitely have the implication in terms of the insurance products because we are going to affect the rainfall distribution.

C (61:13)

Fantastic. So anybody want to pick up.

E (61:16)

Well, I can respond to parts of these two questions. I hate to let down wbcsd, but let me. So I think this is a theme for me. Don't pick one thing. So I think if you take biodiversity, right, the cbd, I think it's actually very powerful that we have a natural capital avenue of action and a 30 by 30, let's just protect big chunks of it line of action, because the limitation of natural capital as an approach, first of all, super powerful and really revolutionary. So that's important, right, that we're finding such powerful ways to bring nature into decision making. It's inescapably partial. There are things we care about in nature that aren't captured by those calculations. And so finding a way to do both is actually really important. And that's, that will continue to be true even as the data continue to get better. I mean, we are knowing more and more about things that we value. But still, and I think so being able to speak qualitatively, in principle, in fact, about what's needed and at a macro scale as well, well as in a granular decision making scale, I think is a real strength of the biodiversity convention, despite the fact that we sort of envy climate for being so simple.

A (62:30)

So I have to confess that I don't know very much about the bioeconomy, so I can't speak much to how they interact. But let me say one thing which is the link between biodiversity and carbon markets. So there's been a lot of discussion of whether, when we think about nature based projects in carbon markets, whether you should be pricing in biodiversity benefits. And I suspect no one in this room is going to disagree with the fact that biodiversity is very valuable. However, bringing it into a carbon market is problematic because as I said, in the end, what you want the price to sit signal is a single price for one ton of CO2 emission, that's avoided. If you now start having some projects that are the same in carbon but are differentially priced because of biodiversity, in some ways that doesn't belong in a market where you're trying to trade this, you're trying to trade or offset carbon from, let's say industrial emissions or taking flights. So I think there's a huge and important discussion, discussion to be had about where and how should biodiversity be priced and traded. But I think if one wants to have kind of a global carbon market that reliably reduces carbon emissions, that's probably not the right place for it.

C (63:54)

Juliana is saying he can say something about bioeconomics.

D (63:57)

No, I can talk a little bit about bioeconomy. You know, I think that's a framing and to start a conversation on how to better integrate nature into the economic discussions I think is quite useful. But in some sense it's the opposite of the improvements in measurement, because you are putting under this umbrella what they call the biotechnology agenda, which is more about molecules, what they call the bioresources, which is about sugarcane or using biomass in order to, to fill, and the social biodiversity, which is this interaction between, like you can say agroforest or the connection between forests. So I think that it's, you know, my view is this is a bit ambiguous in the sense that, you know, I think it's a helpful language because we have created a huge umbrella to better integrate nature into the discussions in terms of the economy. But each one of these sections of the what you can frame as bioeconomy has its own challenge in terms of measurements and policy tools and so on and so forth.

C (65:01)

Right, okay, so can we have anybody up on the top, right at the back there? And then there's a lady here who's been very patient. And then the gentleman. One, two, three. You got the mic. Great.

A (65:14)

Yes. Hi, my name is Brianna Dickey. I'm the executive director of Stratum Institute for Global Action and a new student at lse. Starting this week, my question is how you advise risk mitigation in the speculative and anticipatory expectation of the value captured by these large investments in natural resources. So I come from the commodities sector and particularly, let's say copper, for example, really important for the renewable energy transition and really intentionally intensive, capital intensive to be able to extract and have these large excavation pits. Oftentimes they also take about five years to actually get that return on investment. In the meantime, these are in markets where there's institutional instability or low intensity conflicts with local communities that grow into high intensity conflicts or even regulation uncertainty or changes. So within that context, knowing that this requires partnerships with really large investors, how do you see that in kind of these uncertain markets and the nature of commodities? Hi, I'm interrupting this event to tell you about another awesome LSE podcast that we think you'd enjoy. Lseiq asks social scientists and other experts to answer one intelligent question like why do people believe in conspiracy theories? Or can we afford the super rich? Come check us out. Just search for lseiq wherever you get your podcasts. Now back to the event.

C (66:54)

Excellent. Okay, and then the gentleman here.

D (66:57)

Thank you so much. My name is Sam Ogume from Uganda. I'm on the carbon market.

A (67:02)

The pricing really, because we look at carbon markets, something that can help us protect nature.

D (67:08)

But the pricing, the ETS is $77 per ton. Absorbed when you look at the voluntary carbon markets, which we mostly in Sub Saharan Africa and my country in particular, where agreements writing is $7.

A (67:27)

Don't you think this is discouraging?

D (67:29)

What can we do? 2 is about the methodology of pricing.

A (67:35)

Depending on the demand, and this is.

D (67:39)

Differential demands and putting different prices on the same product, same absorption capacity. Do you think this is fair?

A (67:46)

What can we do to correct that? Thank you.

C (67:49)

Fantastic. So there seems to be a few on carbon markets.

A (67:54)

So let me try to club together a bit of the last two questions, which really are about thinking about risk. So to start with what he was saying, I think one way to think about why is the price of, of carbon so low in the voluntary carbon market? And that's because there's a lot of uncertainty about how much additional carbon is there in a project that you're actually buying. So one way of thinking about it is in the EU3 emissions trading market, one tonne of carbon trades at $77. Because if I, if I have a permit, I'm actually going to show that I have industrial emissions equivalent to 1 ton. That, face it, in the, in the voluntary carbon market, it's saying that the average project that is in that market, investors believe probably has one tenth of that much carbon being prevented. And the rest of that may well be just a lot of people coming in who are not going to cut down their trees with or without the money, for instance. So, and I think this links a little bit to the other question saying how do we reduce the uncertainty and how does that enter the price? One of the issues right now is that the actual price of a project should include not just the price the carbon, but all the cost of measurement, risk management and verification. And that in some ways, when you have something priced at only $7 a tonne, you can't actually afford to do very good measurement or verification as a project developer. And that leads to an even more classic problem that, you know, only the worst projects will survive in the market. So what we're proposing with this sort of centralized body is that they will set up these protocols, but also identify the roughly category by category, how much that should cost. So that should then tell you that, for instance, if you have a forest project that costs less than $20, they probably have not actually had the resources they needed to do proper measurement and verification. So those things will help put a bound below it. And then I think coming to what was said once someone asked earlier, also, I think for that to work, these protocols must be fully transparent. So right now, when you have a Project developer telling you they have measured carbon. We don't know what protocol they've used and it's not transparent. So you need, I mean, so you can decentralize who implements the protocol, but it should be a fully transparent protocol. And then you need to have some amount of centralized auditing to take account of that. So in some ways, I think one of the problems of voluntary carbon market is that everything has gotten decentralized and that's created a lot of these issues. Let me leave it to others.

C (70:36)

I guess the question of the first question on renewables, one view is, you know, China is going to produce very cheap renewables and that's, that's the way to go. It's a bit like the sucking machine.

D (70:49)

But I can pick that. Yeah. You know, I think that, you know, as Rohinim has mentioned, there are, you know, gains of trade somehow. Right. And if you look, for instance in, let's come back to this, to this need of integrating nature into this discussion, right. You can have relatively cheap carbon capture through forest restoration. They're cheap in some place, let's say, like Brazil, which is my own, where my own research is. And although it's cheap there, it doesn't imply that you need to sell it to the, the cost of extraction. Right. You're going to, you're going to sell it by the, the market price and the market price. We're going to follow what's going, what's the marginal cost at that time. Right. So I think that, you know, given that the situation that you have now, I think this is not as important as some that can, you know, become important in the future in the sense that, you know, we need to, to increase our ambitions in terms of implementing a transition to net zero in getting access to cheaper alternatives will be a way of increasing ambition. But these two things need to go together. Otherwise you have this supply of solutions that will avoid action in terms of reducing emissions at scale. So I think that that's the balance and that is that you need to calibrate, which I think it's tricky.

C (72:23)

Fantastic. Okay, so let's do one more round. So. Oh yeah, we have to have our online participants. So, Agnes, you group a few online questions. Start with the online thing.

A (72:38)

Okay. We've got a question from Mohammed Saleem Shaikh, who's from the Climate Change Ministry in Pakistan. He's posing a question to all speakers. Many developing countries are eager to integrate natural capital into their planning, but face challenges from lack of data to limited institutional capacity. So how can international climate Finance and technical support help build long term sovereign capacity for natural capital accounting in vulnerable countries while avoiding dependency and respecting local priorities. Right, we've got another question from an anonymous user. How do you think the EU's carbon border adjustment mechanism will impact the carbon market and how we view natural capital? Yep. And finally from Somnath Paramanik from the University of Southampton, a postdoc researcher. Given recent findings that tropical forest capacity as a carbon sink is already rapidly weakening. It highlights a potential conflict between the long term effectiveness of natural climate solutions and a market mechanism designed to incentivize them. How can carbon markets be reformed to account for the declining health and resilience of these ecosystems? Ensuring credits reflect a real and permanent carbon benefit.

C (73:56)

Okay, that's great. So let's deal with this and then we'll have one more round from the in person people. So maybe. Yeah, that's what I thought if you took the first.

E (74:10)

So the first one from the ministry in Pakistan. So first of all centrally important. Right. And so I think we, the development community needs to respond to that challenge, which is how do we help countries actually act on these insights that we know now can be powerfully helpful to what they're trying to do. There are two good trends here that I think are starting points. One is data. There is more and more data available and more and more data cheaply available that's relevant to addressing these problems, at least because of the proliferation of satellite data, data data from a wide variety of satellites that can be brought to bear and some of it quite cheaply. So I think, and there are many actors in that space that would help a government with those things. I think the second is you see now big actors in the development system space, especially the multilateral banks who have embraced natural capital as a line of engagement with their client countries. And so the World bank, the Inter American Development bank, the Asian Development bank, all have made big commitments. I don't know why I'm talking to you. I know it's not your question.

D (75:20)

You.

E (75:20)

Weren'T nodding or anything.

D (75:23)

Anyway.

E (75:24)

But the big multilateral banks are all now developing significant natural capital programs to work to bring this kind of technical assistance to their client countries. So that's also part.

C (75:35)

Okay, then I guess probably the forest.

D (75:38)

Gradation, you know, I think that's an important question sense that climate change is affecting already what you can call the productivity of forests in terms of carbon capture. And there are some signals that in parts of these forests, especially those who are closer to areas that were already deforested they are in a process of becoming a different kind of forest. And in this change in the dynamics of the species, there's a lot of substantial carbon that is emitted and loss of biodiversity and so on and so forth. I think there are two implications. On the one hand it really reduces the prospect of carbon capture through forest restoration, but on the other hand it threatens even more the integrity of the forest. So in a sense it pushes towards more value to the forest restoration because, you know, the level of deforestation that you're going to afford to avoid, the tipping point with climate change will be probably much less than the level of deforestation that we have now. I think that even the case that deforest restoration will probably, in a climate change scenario, produce less carbon capture, I think it's going to be even more important to avoid steeping these tipping points that are threatened, threatening this forest. So I think that's how I see.

C (77:07)

The problem, I guess.

A (77:09)

Raheem CBAM so I think one of, let me talk about one specific proposal going from the coalition which has received support from the Brazilian Ministry of Finance, which is to really say that if CBAM is just the carbon border adjustment mechanism, it's been something proposed by the European Union suggesting that if a country exports, let's say, an industrial goods to the EU where it doesn't have carbon tax in its own country, the EU would import the difference between the carbon tax within the EU and what was in the exporting country when it comes in. And I think the push that's being made is to see, say you could be concerned, you can see the value of such a tax, what it does, it prevents leakage, it prevents, you know, kind of dirty industries moving outside the eu. The concern is that this is potentially a regressive tax, that it's going to basically be EU collecting resources from less developed countries that don't have carbon taxes. So I think the proposal is to start to move towards a coalition of countries, both rich and poor, poor, that agree to have some form of carbon pricing in their own country on the goods that are going to be exported. And this both encourages countries to start developing say carbon markets and pricing mechanisms, but you allow for graduated pricing in these markets. So if you're a, if you're a low income country, you're certainly not expected to have a carbon price at the same level as eu. I think it's a very promising way of trying to recognize, I think the two issues that you're trying to deal with. One is to have prevent leakage and the other is to recognize this idea of common but differentiated responsibility where a low income country should not be responsible at the same level as a rich country.

C (79:03)

Great. Okay, so I think we probably just about have room for one more flurry of questions or many more than. So let's have one from the top. The gentleman of the white.

E (79:18)

Thank you.

D (79:18)

I'm Bruno Yagudic. I'm actually just interested in terms of the proposed kind of centralized institution for carbon markets. In terms of enforcement, where would that come from, whether from like a national or a multinational level and how could we ensure that it in practical terms actually comes to a satisfactory level of enforcement?

C (79:38)

Fantastic. So I guess if we could have. Maybe we'll have a bumper set. Four, maybe one more from the top.

E (79:44)

Three seconds.

C (79:46)

Gentleman @ the front. Yeah, got him coming.

D (79:57)

Hi, I'm Krish and I'm just two years away from starting university. Thank you so much for your presentation. It was really, really insightful with regards to what, what we've been seeing in the news recently with Trump's one big beautiful bill and it's like significant plans to climate research and climate based initiatives. What do you think the impact will be on natural capital and the way companies will be looking at it in the not too distant future?

C (80:22)

Thank you very much. And then the lady right at the back and then one here, lady with the black.

A (80:31)

Hi, I'm Afni and I'm an environment and sustainability student at lse. I just completed an internship, a natural capital investment manager. So their work is about restoring nature whilst also delivering financial returns. So I wanted to know what your views are on the responsibility and interest that institutional investors like pension funds as well as corporates have in investing in nature based projects. Thank you. Hi, my name is Roxanne and I work at the lse. But I also did a master's in climate change science and policy. And I guess my question is that this whole conversation has been treating nature as a resource and valuing it as a resource. And I think if we sort of look at the bigger picture and the fact that climate change was kind of created because, because we've been overusing natural resources. If we're trying to value nature again as like a capital resource, who's to say that we're not going to end up in the same pattern of overusing these resources? And in your conversation about valuing like blue resources and blue foods, for example, who's to say that in that valuation we're not going to then overuse that resource and then end up back in the same cycle Great.

C (81:53)

Okay, I think we have our marching orders. Do you want to start with the.

E (82:01)

There's so much in that last flurry. Okay, so, but I'll start with this one because this is a regrettably fair question, right? I mean, for sure there's a risk that as one highlights value, one is, is driving overuse. My only counter to that is, okay, do we think we're going to win by just pretending there's nothing there? I think we have to find a way to bring these values into decision makers in terms that resonate with decision makers so that we actually have the opportunity to mobilize the action that's needed. It's not a guarantee, but we've tried, in the case of fisheries, we've tried for half a century to just leave it in the dark.

C (82:47)

Right.

E (82:47)

In the province of third tier ministries and that has not gone very well. So it just seems to me it's time that we bring it out and then push to make sure that people, I mean the risk here, of course, it's not just an ocean risk, is that political decision makers are very bad at thinking about long term.

C (83:05)

Right.

E (83:05)

But I think we have the opportunity to at least make the case that what is actually rational for them in the short term and the long term is to be serious about stewarding a resource that is providing all of these benefits. But it's a completely fair question.

A (83:20)

So maybe I'll just club together in a couple in terms of thinking about participation and monitoring. So the way we think about it, it is groups, it could be jurisdictions, it could be firms, it could be, I think those would be the. And it could be nature based providers who would enter the market on a voluntary basis. But once they entered on the voluntary basis, it would be a compliance market with a regulator. So you might ask then, well, how is this going to work in terms of compliance? Well, the first promise is going to be that what you want to enter this market are domestic compliance markets. So as I said, there are already 37 of these are across the board world, they're expanding fast. And so a lot of the work at the start would potentially be having a centralized regulator who interlinks these markets. And then each of these markets has a domestic regulator and a domestic compliance market that works and enforcing. And I'd say that we've seen in settings, I've done work in India, which is not often seen as the highest state capacity setting, but a compliance market can work. So. So I think if you have a regulator who's sufficiently credible that would Work in this case, there's perhaps a little bit more of a wrinkle that you also need the global institution that's going to give credibility to it. And I think one way to think about it is it's something you want to probably do in phases. And so that's very much what we're proposing, is to have a phase in of it.

C (84:49)

Right.

D (84:49)

So I think I'll need to talk about the thing. Right. You know, I have a view on that. I think that except by the impact that Trump might have on gdp, I think he's not going to be helpful on climate. Right. And but said that, you know, what we have so far is a system in which, you know, from the Paris agreement when we had the last, you.

C (85:19)

Know.

D (85:21)

Advanced in terms of climate negotiations, the emissions have only increased. Right. So we are really falling behind these, the climate change needs in terms of changing emissions trajectory. So I really need, we think, to put in place something that is quite different from what we have now. So maybe I have this hope and we, we do have some good signals about this coalition of countries that maybe they might be triggered by the absence of United States on this discussion. So I think this might create a momentum for us to think about an alternative ways of doing something that is meaningful because, you know, if you look at the data, the absolute data in terms of emissions, things are really off track. So that's my more positive view on that. And just want to comment on the valuing nature, which I think it's a, I've been thinking quite a bit about that and to me it's a kind of asymmetric exercise because you don't fully understand, you know, even if you focus yourself on the more utilitarian approach to nature, we don't even understand the full picture there. But it might be the case in the case of tropical forests have been showing that, you know, climate itself, if the road becomes serious about climate change, the climate itself can channel enough resources to the forest agenda that will be super helpful to restore important ecosystems. Right. So that, to me, that's the, you know, how I'm thinking about playing it is, you know, we are trying to frame, you know, here's a way in which climate, in which forest, forests can have a significant contribution to the climate change. But in truth, what I'm more interested is to channel resources to the forest agenda in a way that you're going to protect the part of nature that we don't fully understand its value. So I think that's, this is how I frame it. In my mind.

C (87:20)

Fantastic. So let me just say one last thing and then we will close. So I think one word which kind of might sum up our approach this week is kind of whatever it takes. Whatever it takes. We have to take out the space between the. I just wrote it down. It's one word. And I think, you know, on Monday we had a bunch of stuff on loss and damaged funds, more on adaptation. Tomorrow we're going to have climate finance. And one thing that's given me kind of the greatest hope is we've been seeing a lot of Indonesians, a lot of people from Brazil, a lot of people from, from India, a lot of people in China. And there is this feeling like stuff is moving. I think one of the reasons it's moving is partly, of course, technological from China, but in terms of the political will, it's the fact that now you can demonstrate, for example, as Juliana was doing, there was a huge co benefit from, for example, forest protection, which may even help agriculture, electricity generation and so forth. And then finally, since we're at the lsc, it is a kind of ecosystem of like academics, civil servants, you know, civil society, NGOs. It's kind of everybody pushing for solutions. And the word that sort of comes out of the kind of innovative solutions that give credible hope that something can happen. I think those things are kind of emerging. Those innovations are not all in mitigation, a lot of them on social protection. So Bangladesh, for example, has been a huge innovation, doing stuff to protect people from climate change. And then the thing that Rohini was really bringing, which I think is massive, is the gains from trade, not just within countries, but across the world, if you can trade carbon and other things. Anyway, thank you very, very much for coming.

A (89:02)

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