The NatureBacked Podcast

Valuing Ecosystem Services with Single.Earth's Co-founder Andrus Aaslaid

February 21, 2022 Tarmo Season 1 Episode 0
The NatureBacked Podcast
Valuing Ecosystem Services with Single.Earth's Co-founder Andrus Aaslaid
Show Notes Transcript

Single.Earth CTO and cofounder Andrus Aaslaid speak about why Single.Earth was founded and how the company plans to monetize ecosystem services.
A few key takeaways from Andrus Aaslaid:
"All we have done so far in the world ... as a humanity, we have been optimizing the economic processes quite a lot to be able to maximize profits. Somewhere in the middle, we forgot that this will put more and more strain on ecology."
**
"We need birds and bees and all other creatures on the planet because if we focus 100% on global warming and trying to suck as much carbon out of the atmosphere as possible, sacrificing everybody else, yes, it will be one cooler planet, probably, but we might very well find that we are alone and starving on it because we had thrown everything else away in a process."
**
"Money is what drives it all around. And so far we have looked at our capital investments only from the gains perspective -- if we create something, then how much profit it will make. And if investors are investing somewhere, then what will be the best return on that money. We've been optimizing all the processes based on the, well literally what's good for the shareholders."
**
"We need a whole lot more attention towards it that capital would also seek that our environment would sustain so that the money everybody's making would be possible to spend on the planet before it overheats and goes to hell."

Unknown:

Welcome to NatureBacked podcast of Single.Earth. In this series, we will be talking with investors about their strategies, how they are making the decisions, and how they see that sustainable investment scene developing. My name is Tarmo Virki and I will be your host in this series. In this episode zero I will be speaking with Single.Earth cofounder and CTO Andrus Aaslaid on how Single.Earth is involved in a green investment scene, and what to look out in the future episodes of NatureBacked. When I first heard of Single.Earth for me the idea of somebody trying to change the world's financial system sounded really intriguing. Could you explain in a few words what Single.Earth is doing in changing the financial world? Well, all we have done so far in the world, not Single.Earth, but we as a humanity, we have been optimising the economic processes quite a lot to be able to maximise profits and things like that. But somewhere in the middle, we have forgot that this will put more and more strain on ecology. And not only that, we're talking about raw material, but our footprint actually has become quite large, just the other day, somebody said that, since the day I was born, the world population has doubled. And this is something people don't get. That there are actual human beings alive and not probably looking too old, which have born where we had little less than 4 billion people on this earth so we have forgot that we're putting a lot of strain as a secondary, sort of not emissions, really, but the secondary ecological footprint. And unless we are learning how to account this secondary footprint and how to account the ecosystem, in the equation of economic processes, we're gonna just strain it because nobody knows how to calculate it. Single.Earth's most prominent goal is to be able to provide the means and measures and an ecosystem to be able to trade with services, which never had the price tag before. How are you doing it? Imagine that you are a landowner today, and you have some trees growing and in year 2021 nobody will pay you for having those trees there. Yes, they will pay you, somebody will pay you when you cut trees down and sell it as a timber. And yes, everybody else will come nagging after you saying that clearcutting isn't a nice thing and you're destroying the habitat and you're being in general a very bad person because you're cutting trees. But as a matter of fact, there's no other way of capitalising it because you will probably not be able to sell some sort of berry-picking or mushroom-picking licences enough that it would make a lucrative at the business. And frankly, outside green enthusiasts, nobody really cares about what lives there or what does not, yet nevertheless, have a price tag on any of that and that we don't even know the taxonomy of it so far. So what Single.Earth does is that we are modelling what your land is worth and not worth by the financial value, but what kinds of ecosystem services your land provides to the general public or for the overall good of us on the planet. We build models around it, learn how to calculate and create a taxonomy around it and make those goods tradable. So I think the simplest, in a simplest form, you can imagine that your trees which are growing, could theoretically absorb some carbon if they're at the right age and the right sort of lifecycle. And this carbon sequestration is sort of calculated in general plans of the governments but nobody pays you for that, that your land sequestering carbon, you get nothing out of it. So the fact that your land actually does provide the services could be monetised. We're hearing a lot about carbon these days. The other week we visited Slush, where it felt like half of the startups were talking about carbon and and bunch of the investors too. Are you seeing is there some kind of boom in the carbon sector startups? Well, I was talking with some of the investors there and they said that when we started with Single.Earth two years ago, we were pretty much one of the very few who dealt with that. Now they're seeing explosion of all kind of green startups mostly labelled now as a climate tech, not even a green tech, but but there is a new sector called Climate tech, trying to tackle these problems, and each and every one coming up with their idea and solution, what could what could save, save the planet. At the same time, when we started two years ago, nobody spoke about the ecosystem services would have a price. Because most of that work is done as a sort of pledge with a nation of government support basis. I think in last 12 months, we have started to hear from universities and from governments that the ecosystem services are something which should habe financial value and we have to learn how to calculate it. So well, the world this, the world is moving towards it. And then a lot of companies trying to trying to capitalise on it. We were there earlier than others but it is certainly something what has to be the global effort that we would be able to put it on everybody's mind that these things which so far have only has psychological value, actually, are the cornerstones of modern life on this planet is made from. We need birds and bees and all other creatures on the planet because if we focus 100% on the global warming and trying to suck as much carbon out of atmosphere as possible, sacrificing everybody else, yes, it will be one cooler planet, probably both, we might very well find that we are alone and starving on it, because we had thrown everything else away in a process. And looking at the bigger picture, of course more the merrier to actually succeed. We need more brains, more crazy ideas, how the world could be changed, right? The world is much bigger place than we used to think of. We're talking about the very simplistic, almost like, like characteristic scheme of you have trees, trees absorb carbon, this carbon could be sold. That is not even the tip of the iceberg. This is we're talking about carbon and trees, because this is what everybody is used to see and used to talk about. We've been dealing with carbon emissions and trying to calculate everything in carbon equivalence for the last couple of decades. We have much bigger things in our hands, what we have to save, its biodiversity we are in some opinions, we are in the process of the next massive extinction with with every day, literally hundreds and 1000s of species disappearing somewhere. And we are not able to figure out what the consequences of this extinction is some of them are probably more important to our own lives than we even can imagine. So we have to figure out how to how to save that. And we are somehow in the past decade have been talking a lot about forests and how the ecosystems are degrading, our own Baltic Sea next door doorstep is more or less dead. About half of it doesn't tell any any any life because we have somehow ended up creating an ecosystem which is dying at us the whole blue carbon initiative and attempts to to save the oceans and water bodies from from becoming carbon active or or actually releasing the carbon which they have been storing over over the 1000s and then hundreds of 1000s of years. This is something which is now only becoming an issue, the thing is oceans don't belong to anybody, we don't have an ownership for the oceans and this collective ownership as some large scale communistic experiences have shown is not the best form of maintaining something so we have huge problems there. And if the world's oceans now deciding to release all the carbon all at once we can plant everything else, which grows something full of trees and it's not still going to be enough to to absorb it. So that's the scale of the things we're working at. Basically the kind of environmental challenges are massive on the background, while investments or let's say the financial world has been focusing on quarterly profits. The challenge of this podcast is also to ease to see how eventually the investors will be able to see value in that in the ecosystem services, and how money which today maybe, is put into the efficiency of coal plant could be eventually going into the ocean. I think it's even going beyond that. Because a certain Mr. Musk has serious plans of terraforming Mars and we think we can do it and we have come up with models. What a lot of people are missing, or pretty much everybody's missing at this point is that we are in the process of terraforming earth or we are going to be in the process of terraforming Earth because we have to measure what's going on. We have to figure out what is the best environment, the planet and ourselves would be sustainably able to keep. And we have to take the necessary actions that this would happen. And the whole debate, is it man-made? Is it something that we have polluted? Is it the seasonality on large scale, like 1000 to 10,000 year cycle? Is it an Ice Age? Or is it something else? The fact is, we have hypotheses, and some of them proving better than others. But at the end, it is what it is we measure, we see that it's gonna go into the direction what is not suitable for humankind. And we have to take the necessary action that this process would go in a different way, no matter if we are the reason for that. Or if we are if we just are observers of another climate cycle. Regardless of that, this is going to affect all of us so so it's not only that, should we use atomic energy? Or should we use the coal? Or should we go hydro energy? Or should we go something else? It is actually that we have to take this big picture and figure out what can we do and it's not only energetics, it's everything else as well. It is terraforming planet Earth, literally. That's a nice or maybe not so nice challenge we will be facing in the in the coming months and years. Going back to this nature backed finance world what Single.Earth is trying to build - you keep talking about the end of the world here, what money has to do with it? Money is what drives it all around. And so far we have looked at our capital investments only from the gains perspective -- if we create something, then how much profit it will make. And if investors are investing somewhere, then what will be the best return on that money. We've been optimising all the processes based on the, well literally like what's good for the shareholders. It is happening already, but we need a whole lot more attention towards it that capital would also seek that our environment would sustain so that the money everybody's making is possible to spend on the planet before it overheats and goes to hell. So, Single.Earth is basically part of that we are creating a system and methodology and also some apparatus and means around it so that we will be able to actually create a sustainable financial system that supports all those efforts. Thanks Andrus. Looking at the development of the sustainable financial systems, we will be going much deeper in that in the upcoming episodes of NatureBacked podcast. Thank you for listening, and we'll be back!