by Jim MacLennan | Forest Economics, Forest Restoration
The Big Question: What Are Carbon Credits, and Why Should You Care?
Carbon credits are one of those ideas that sound simple on the surface – companies pay to offset their emissions, and the planet wins – but once you start peeling back the layers, things get complicated. If you’re an entrepreneur, an investor, or a leader in manufacturing or forestry, you need to know how this market works.
Carbon credits are becoming a critical piece of global sustainability strategies. They create financial incentives to reduce emissions, but they also introduce complexities that businesses and investors must navigate. For those looking to innovate in ForestTech or sustainable manufacturing, understanding this space isn’t optional – it’s a competitive advantage.
The Origins: Where Did Carbon Credits Come From?
The concept of carbon credits emerged in the 1990s as part of global efforts to combat climate change. Some key moments:
- 1997: Kyoto Protocol – Introduced the first international carbon market, allowing countries to trade emission reductions.
- 2005: European Union Emissions Trading System (EU ETS) – Created the largest regulated carbon market, setting the stage for corporate participation.
- 2015: Paris Agreement – Shifted focus toward voluntary carbon markets, where companies set their own reduction goals and buy credits to offset emissions.
Fast forward to today, and we have an evolving landscape of compliance markets (government-regulated) and voluntary markets (corporate-driven). The challenge? Making sure these systems actually work.
The Value: Why Carbon Credits Matter
At their core, carbon credits serve three major purposes:
- Incentivizing Emission Reduction– Companies that exceed reduction targets can sell credits, creating financial rewards for sustainability.
- Funding Climate Projects – Many credits support initiatives like reforestation and carbon sequestration, giving capital to projects that make a tangible environmental impact.
- Enhancing Corporate Responsibility – Companies use carbon credits to align with sustainability goals, improve brand image, and stay ahead of regulations.
For entrepreneurs and investors, carbon credits aren’t just a compliance tool – they represent an opportunity. Startups in ForestTech are building digital verification tools, AI-driven carbon assessments, and next-gen forestry models that make these markets more efficient and transparent.
The Challenges: What’s Holding Carbon Credits Back?
Carbon markets sound great in theory, but execution has been a challenge. Some major roadblocks:
- Verification Issues – Not all credits represent real reductions. Some projects exaggerate impact, and without reliable monitoring, greenwashing becomes a problem.
- Market Volatility – Prices for carbon credits fluctuate wildly, making it hard for businesses to plan long-term strategies.
- Double Counting & Fraud – Some credits are counted more than once, eroding trust in the system. Blockchain and AI solutions are emerging to solve this, but adoption is slow.
This is where innovation comes in. Investors and startups are stepping up to create more transparent, data-driven solutions. Companies like Pachama and Sylvera are leveraging satellite imagery and AI to improve carbon credit verification. If you’re looking for high-impact opportunities, solving these challenges could be your next big move.
Lessons from the Past: How Challenges Have Been Overcome
Carbon markets have faced skepticism before, but solutions have emerged:
- Stricter Verification Standards – The introduction of third-party auditors has improved credit legitimacy.
- Tech-Driven Transparency – Companies are developing blockchain-based registries to track credits and prevent double counting.
- More Corporate Buy-In – Big tech firms like Microsoft and Amazon are investing heavily in carbon offsets, signaling confidence in the market’s future.
As these systems improve, they open the door for entrepreneurs to build next-gen climate solutions and for investors to back high-growth companies that bridge the gap between sustainability and profitability.
The Future: Where Are Carbon Credits Going?
Looking ahead, several trends will define the next five years:
- Integration with AI & Remote Sensing – AI-driven monitoring will make verification faster and more reliable.
- Growth of Nature-Based Solutions – Forest conservation, soil carbon sequestration, and regenerative agriculture will dominate the space.
- Stronger Regulation & Standardization – Governments and organizations will push for more accountability, increasing demand for trusted carbon credits.
For startups and investors, this means opportunities to create value by solving inefficiencies, improving tracking, and building scalable, tech-driven solutions.
Why You Should Care (And What to Do About It)
The carbon credit market isn’t just an environmental initiative – it’s a business reality. Whether you’re in manufacturing, ForestTech, or sustainability investing, this space is shaping global markets and supply chains.
Here’s how to stay ahead:
- For Entrepreneurs: Look at pain points in verification, pricing, or accessibility. Are there ways to streamline processes with better tech?
- For Investors: Find startups tackling these challenges with scalable solutions. Companies bridging the gap between carbon markets and AI, blockchain, or remote sensing are prime candidates.
- For Business Leaders: Understand how carbon credits fit into your sustainability strategy. This isn’t just about compliance – it’s about staying competitive.
The bottom line? Carbon credits are a fast-moving space where innovation is needed. Whether you’re building, funding, or adapting, now is the time to engage.
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by Jim MacLennan | Forest Economics, Discovery
I’ll be honest—when I first heard about underwater forests, my reaction was probably similar to yours: *What? That’s a thing?* But after sitting down with Lonnie Hayward, CEO of Timberwise, I quickly realized that this isn’t just a thing—it’s a multi-billion-dollar industry hiding in plain sight, or rather, beneath the water’s surface.
Turns out, when hydroelectric dams flood forests, they don’t just wipe out land—they preserve it in a strangely frozen state. Decades-old, even century-old trees stand submerged, waiting for someone with the right tech, vision, and tenacity to extract them. That’s where Timberwise comes in.
Timberwise is doing for submerged timber what the gold rush did for prospecting—except this time, it’s sustainable, profitable, and surprisingly logical. And the kicker? It could transform how we think about forestry, carbon credits, and indigenous land partnerships.
The Accidental Discovery of a Billion-Dollar Industry
Lonnie didn’t start his career looking for sunken forests. He’s got a background in forestry, oil and gas, and finance—industries that don’t immediately scream “eco-innovation.” But sometimes, opportunity finds you.
“When I first got into this, it was purely about accessing high-value species that were no longer available due to deforestation,” Lonnie told me. “Musical instrument makers, luxury furniture companies—they all wanted this wood, but the only way to get it was through the black market.”
Enter a group of engineers in Brazil, desperately looking for a better way to retrieve these submerged giants. They’d been using divers—a dangerous, inefficient, and slow method. Lonnie saw the potential, acquired the technology, and transformed it into a scalable business.
“The tech was there, but nobody had the vision to turn it into an industry,” he said. “That’s where I came in.”
How Underwater Logging Works (And Why It’s Brilliant)
If you’re picturing scuba divers with chainsaws, let’s reset that image. The Timberwise technology is designed to use specialized robotic arms that can reach more than 120 feet below the surface, cutting and retrieving trees efficiently—without disturbing the ecosystem.
In the past, illegal & irresponsible logging practices have devastated entire ecosystems. While the vast majority of terrestrial logging today is performed in an environmentally & conscientious manner, there is simply not enough wood to keep up with the housing demand. This is especially true in light of the massive losses incurred in our forests each year due to insect infestation & wildfires. Underwater harvesting will help to ease the pressure on terrestrial logging so that many of these forests can recover.
Here’s why this matters:
- **Carbon Impact** – Each underwater tree that is harvested saves one terrestrial tree in the forest, so that it can continue to sequester CO2 and produce oxygen for our planet. In fact, each cubic meter of living tree stores one ton of carbon and produces more than two tons of oxygen.
- **Economic Opportunity** – The global submerged timber market is worth an estimated **$125 billion**.
- **Indigenous Partnerships** – Many of these submerged forests are on indigenous lands. Timberwise is working directly with these communities, ensuring they get a cut of the revenue while also restoring their waterways.
“This isn’t just about making money,” Lonnie emphasized. “We’re reversing some of the environmental damage that was done decades ago, while also creating an economic engine for indigenous communities.”
Bridging Sustainability and Profitability
Sustainability has a bad habit of being framed as a tradeoff—good for the planet, bad for the bottom line. Timberwise is flipping that narrative.
Take the Kuna Indians in Panama. Their land was flooded for hydroelectric power, rendering it useless for fishing or farming. Timberwise isn’t solely about extracting trees; they’ve also created a charitable element to their company that will allow them to fund projects like tilapia farms, restoring livelihoods while creating economic opportunities.
And Lonnie has seen this shift firsthand. “When we started, sustainability was just a side benefit,” he admitted. “Now, it’s a selling point. Governments and corporations are actively looking for solutions like this—especially with new deforestation bans coming into play. Once we have an active operation, the carbon credit potential alone will no doubt be attractive to industry giants like Weyerhaeuser and West Fraser Timber.”
The Future of Underwater Logging
This industry is still in its infancy. Most hydro companies didn’t even realize the trees they flooded were still intact, let alone valuable. “We had one hydro exec ask me, ‘Wait, aren’t those trees rotted?’” Lonnie recalled. “When I showed her a sample, she couldn’t believe it. This wood is pristine—it’s been preserved underwater for decades.”
So, what’s next?
For Timberwise, it’s about scaling up—expanding into more regions, refining their tech, and unlocking even greater sustainability benefits.
For entrepreneurs, it’s a lesson in recognizing hidden value. Lonnie wasn’t a forestry startup guy. He was a corporate guy who saw an opportunity and ran with it.
And for investors, policymakers, and environmentalists, it’s a sign that innovation in sustainability doesn’t always look like wind farms and solar panels. Sometimes, it’s a high-tech logging machine pulling century-old mahogany out of a reservoir.
Final Thoughts: The Best Opportunities Are Hidden in Plain Sight
The next time you fly over a reservoir, look down. Beneath that murky surface lies an untapped economic and environmental opportunity.
And if Timberwise has anything to say about it, those trees won’t stay hidden for much longer.
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by Jim MacLennan | Forest Economics
When my corporate career was drawing to a close, sustainability and carbon credits were just coming in to the conversation. For a long time, I thought carbon credits were one of those ideas that sound great on paper. In practice, though, they still face any array of challenges. Enter Greenomix, a company that’s tackling these challenges head-on with a unique mix of financial assurance and technology.
In my work at Talking Tree Ventures, I’ve become deeply invested in supporting innovators in areas like Forest Economics, Reforestation, and Fire Management. I am having a great time finding innovative companies that support those areas. For example, Greenomix offers support investments in reforestation and conservation by addressing the risk management issues plaguing carbon credit markets.
Recently, I had the privilege of sitting down with Cary Shepherd, the company’s CEO, to learn more about their work.
The Greenomix Mission: Making Carbon Credits Work
When I asked Cary to distill his company’s mission into a few sentences, his response was both candid and compelling. “We make sure carbon credits work,” he said simply. “By pairing them with a financial product that funds the replacement of any problems over their lifespan, we take the risk out of the equation.”
This “risk,” as Cary explained, ranges from natural disasters like fires to unpredictable regulatory changes. Here’s a list of examples … how interesting …
- Environmental Risks – Wildfires, which destroy large portions of forest, releasing sequestered carbon back into the atmosphere and invalidating the associated carbon credits.
- Scientific Updates – Updates to methodologies for calculating carbon sequestration could retroactively adjust the amount of carbon credited to a forest project, reducing its perceived value.
- Legal and Regulatory Risks – A government could revoke recognition of voluntary carbon credits in favor of mandatory compliance credits.
- Market Risks – Decreased demand for voluntary carbon credits (due to corporate policy changes or public sentiment) could reduce the market value of credits tied to the forest.
- Competing Projects – The emergence of alternative carbon removal methods, like direct air capture or ocean-based sequestration, could devalue forest-based carbon credits.
- Operational Risks – Carbon credit projects often require ongoing monitoring and reporting. Failing to meet these requirements can result in penalties or invalidation of credits.
- Social and Political Risks – Changes in leadership or organizational priorities could deprioritize maintaining the forest, leading to its degradation.
- Reversal Risks – If the land is repurposed (e.g., cleared for agriculture or development), the associated carbon credits might become invalid.
There are plenty more, this is just a sample list. And a ton of things that I just wouldn’t know to anticipate; Greenomix’s solution is as much about foresight as it is about fixing issues when they arise.
A Personal Journey Toward Impact
Cary’s career path is pretty cool. Starting as a climate finance attorney, he honed his expertise negotiating complex clean energy programs and legislation. His transition to the private sector deepened his understanding of environmental markets – and revealed a gaping hole in the system.
“I’ve seen amazing carbon projects in low-income communities transform local economies,” Cary shared. “But too often, large corporations hesitate to invest due to uninsurable risks.”
That realization became the seed for Greenomix. With his co-founder, Cary developed a model that treats carbon credits less like risky investments and more like diversified financial portfolios.
Greenomix Carbon Assurance: The Game-Changer
At the heart of Greenomix’s approach is the Greenomix Carbon Assurance product. Cary described it as a blend of three key services:
- Permanence Assurance: Financial mechanisms that guarantee the longevity of carbon credits.
- Carbon Monitoring: An AI-driven system that keeps tabs on project performance and emerging risks.
- Carbon Management: Proactive interventions to correct underperformance in carbon credit portfolios.
It’s this trifecta of innovation, technology, and finance that allows Greenomix to offer what Cary calls “climate wealth management.”
The Role of Technology
No conversation about innovation would be complete without a discussion of technology. Greenomix has built its own AI tools to assess and manage carbon projects dynamically.
“Our AI system conducts real-time diligence that would be cost-prohibitive with human labor alone,” Cary said. “It gives us the ability to identify risks and adjust strategies long before problems escalate.”
This proactive approach isn’t just about avoiding pitfalls—it’s about building trust in a market that desperately needs it.
Connecting Carbon Credits to Forest Restoration and Conservation
One of the most exciting aspects of Greenomix’s work is its potential to amplify efforts in Forest Restoration and Conservation. By making carbon credits more reliable, Greenomix encourages investment in projects that not only restore forests but also conserve existing ones, such as those under REDD+ programs, safeguarding biodiversity and preventing deforestation. “Forests are irreplaceable,” Cary said. “Every step we take to ensure the success of reforestation and conservation projects contributes to climate resilience on a global scale.”
What’s Next for Greenomix?
The company is at an exciting juncture, working to close its first revenue-generating deals. Cary is clear about the stakes: every customer they sign on is proof of concept for their innovative model. “These early wins are crucial,” he said. “They’ll help us refine our approach and build momentum for future growth.”
Lessons for Entrepreneurs
As I am writing up these notes, I am thinking about the broader lessons Cary’s journey offers to entrepreneurs. His story underscores the importance of spotting systemic issues and addressing them with creativity and pragmatism. He’s not just solving a technical problem – he’s creating a system that could redefine how we think about sustainability.
Cary and the Greenomix team are building something pretty cool – a solution that aligns perfectly with Talking Tree Ventures’ mission to make a meaningful impact through innovation.
What do you think about Greenomix’s approach to carbon credits? Have questions or insights to share? Let’s keep the conversation going in the comments below.
And if you’d like to stay updated on stories like this, don’t forget to join our mailing list at Talking Tree Ventures.
by Jim MacLennan | Forest Economics
In the evolving landscape of forestry, artificial intelligence (AI) emerges as a transformative force, reshaping forest economics and presenting unprecedented opportunities for startups and investors. At Talking Tree Ventures, we are committed to supporting innovators who harness technology to drive sustainable and economically viable forestry practices.
AI-Powered Forest Inventory: Precision and Efficiency
Traditional forest inventories, often labor-intensive and time-consuming, are undergoing a significant transformation through AI integration. By analyzing satellite imagery and employing machine learning algorithms, AI enables precise assessments of forest resources, including tree species identification, density measurements, and health evaluations. This technological advancement not only reduces operational costs but also enhances the accuracy of data, facilitating informed decision-making for forest management.
- AI Impact: AI-driven forest inventory tools can identify tree species and assess forest density and health, all while reducing costs by automating data collection and analysis. This precision enables foresters and investors to maximize resource value while planning more effective management interventions.
- In the Wild: The World Resources Institute has employed AI in the Global Forest Watch project, which uses satellite data and machine learning to monitor forests worldwide. This tool has improved transparency in forest resource management, enabling stakeholders to make informed decisions. More on this here.
Optimizing Timber Harvesting: Balancing Profit and Sustainability
AI applications in timber harvesting are revolutionizing the balance between economic gain and environmental stewardship. Through predictive analytics, AI models can forecast optimal harvesting times and methods, considering factors such as tree growth rates, market demand, and ecological impact. This approach ensures that timber extraction is both profitable and sustainable, aligning with the principles of sustainable forestry.
- AI Impact: Predictive analytics can optimize harvesting schedules to boost profitability and maintain ecological balance, enabling sustainable operations. Forecast models help companies reduce waste and plan operations that minimize habitat disruption.
- In the Wild: In Finland, UPM Forest has implemented AI to determine optimal harvesting methods and schedules, balancing yield with ecosystem preservation. This application shows how AI can align commercial and conservation goals. Learn more about UPM’s work here.
Market Analysis and Forecasting: Navigating Economic Trends
Understanding market dynamics is essential for stakeholders in the forestry sector. AI enhances this understanding by analyzing complex datasets to identify trends, predict price fluctuations, and assess demand for various forest products. Such insights enable startups and investors to make strategic decisions, optimize supply chains, and mitigate financial risks.
- AI Impact: AI analyzes historical data alongside current indicators to forecast trends and fluctuations, helping companies better match supply with demand and improve pricing strategies.
- In the Wild: Canadian forestry giant Canfor is using AI-driven tools to analyze market data, enabling faster responses to demand shifts. This agility helps manage risks and maintain profitability in volatile markets. Read more about Canfor’s strategies here.
Carbon Credit Valuation: Monetizing Ecosystem Services
Forests play a pivotal role in carbon sequestration, offering opportunities for monetization through carbon credits. AI facilitates accurate measurement and monitoring of carbon storage, essential for participating in carbon markets. By analyzing satellite data and employing machine learning models, AI provides precise estimates of carbon sequestration levels, enabling forest owners to generate reliable carbon credits and contribute to climate change mitigation.
- AI Impact: By accurately quantifying carbon stocks, AI enables forest managers to generate and verify carbon credits, opening revenue streams for landowners and supporting climate objectives.
- In the Wild: Pachama uses AI and satellite data to verify carbon credits in reforestation and forest preservation projects, increasing transparency and accountability. Learn more about Pachama’s methodology here.
Risk Assessment and Management: Safeguarding Investments
Investing in forestry involves inherent risks, including susceptibility to pests, diseases, and wildfires. AI mitigates these risks by providing predictive analytics and early warning systems. For instance, AI models can analyze environmental data to forecast wildfire risks, enabling proactive measures to protect forest assets. Similarly, AI can detect early signs of pest infestations or disease outbreaks, allowing for timely interventions and minimizing potential losses.
- AI Impact: Early warning systems driven by AI improve risk assessments by detecting wildfire, pest, and disease threats before they escalate, protecting both forests and investments.
- In the Wild: SilvaGuard has developed an AI platform that provides real-time fire and pest alerts based on environmental data. This tool is in use across the U.S., demonstrating AI’s role in risk management. More on SilvaGuard’s approach here.
In conclusion, the integration of AI into forest economics offers transformative potential for startups and investors. By enhancing precision, optimizing operations, providing market insights, facilitating carbon credit valuation, and improving risk management, AI paves the way for a sustainable and profitable future in forestry. At Talking Tree Ventures, we are dedicated to supporting innovators who leverage technology to advance forest economics, contributing to global environmental sustainability and economic prosperity.
We invite you to join our mission to revolutionize forest economics through innovation. Share your thoughts in the comments, subscribe to our mailing list, and stay tuned for more updates on how technology is transforming the forestry sector
by Jim MacLennan | Forest Economics
If you’re diving into the world of forestry, understanding the economics behind it is crucial. Forest Economics isn’t just about managing trees—it’s about sustaining ecosystems, supporting communities, and creating long-term value. In today’s rapidly evolving landscape, where technology and sustainability converge, entrepreneurs and investors have an unprecedented opportunity to make a meaningful impact.
The Foundations of Forest Economics
At its core, Forest Economics is the study of how we can use forest resources to generate wealth while ensuring their longevity. This isn’t just about cutting down trees and selling timber. It’s about managing land to balance economic returns with ecological health. The principles of Forest Economics guide decisions on everything from harvest timing to land-use planning, ensuring that today’s actions don’t compromise tomorrow’s opportunities.
A well-managed forest can provide a steady income stream through timber, non-timber products, and ecosystem services like carbon sequestration. But it requires a deep understanding of market dynamics and natural systems—a balancing act that has evolved over centuries.
Historical Milestones: Learning from the Past
The field of Forest Economics has deep roots. For example, the introduction of sustained yield forestry in the 19th century revolutionized the way we think about resource management. Instead of clear-cutting entire forests, foresters began to plan for continuous yields, ensuring that forests could regenerate and continue to provide resources indefinitely.
Another pivotal moment came in the mid-20th century with the rise of environmental awareness. The establishment of organizations like the International Union for Conservation of Nature (IUCN) marked a shift towards integrating conservation with economic practices. These milestones laid the groundwork for today’s emphasis on sustainability, where economic gains are weighed against long-term environmental impacts.
Critical Value in Today’s World
So, why should modern entrepreneurs and investors care about Forest Economics? The answer lies in the growing demand for sustainable solutions. Forests play a crucial role in mitigating climate change, preserving biodiversity, and supporting rural economies. In many ways, they are the backbone of a sustainable future.
Investing in sustainable forestry isn’t just about doing good—it’s also smart business. Markets are increasingly rewarding companies that prioritize sustainability. Consumers and governments are demanding more accountability, and sustainable forestry is a way to meet these expectations while tapping into new revenue streams, like carbon credits or eco-tourism.
Current and Emerging Challenges
However, the path forward is not without obstacles. Climate change poses a significant threat to forests, altering growth patterns and increasing the frequency of devastating wildfires. Market volatility, driven by everything from trade policies to global pandemics, also complicates long-term planning.
Moreover, the rise of digital forestry—using technology to monitor and manage forests—is both a challenge and an opportunity. While it offers powerful tools for efficiency and sustainability, it also requires significant investment and expertise. Entrepreneurs and investors must carefully navigate these challenges, balancing innovation with practicality.
Lessons from the Past
History offers valuable lessons. Consider the dust bowl of the 1930s, where poor land management led to severe ecological and economic consequences. In response, the U.S. government launched massive reforestation efforts, demonstrating the importance of proactive management.
Today, these lessons remind us that sustainability isn’t just a buzzword—it’s a necessity. Entrepreneurs in the forestry sector must learn from past mistakes, focusing on practices that support economic viability and ecological health.
Looking Forward: The Future of Forest Economics
The future of Forest Economics is intertwined with innovation. Digital tools are transforming how we manage forests, offering new ways to monitor health, optimize harvests, and even predict the impacts of climate change. Companies like Silviaterra are leading the way, using data to make forestry more efficient and sustainable.
But it’s not just about technology. The future also depends on collaboration. Entrepreneurs, investors, and researchers must work together to develop profitable and sustainable solutions. This is where initiatives like Talking Tree Ventures come into play—bridging the gap between innovation and implementation.
Networking and Collaboration: A Call to Action
If you’re an entrepreneur or investor in the forestry sector, now is the time to act. The challenges are significant, but so are the opportunities. At Talking Tree Ventures, we’re committed to supporting startups and innovators driving sustainable forestry’s future.
We invite you to connect with us, share your ideas, and explore how we can work together to create a more sustainable and profitable future. The next big breakthrough in forestry might just come from your venture.
- Understand the balance between economic gain and sustainability in forestry.
- Learn from past challenges to inform future forestry practices.
- Explore opportunities in digital forestry and sustainable investments.
Join our mailing list to stay updated, share your thoughts in the comments, and stay tuned for more insights into the future of forestry.
