Editor’s Note: This interview first appeared in Path Finders, an email newsletter from the Daily Yonder. Each week, Path Finders features a Q&A with a rural thinker, creator, or doer. Like what you see here? You can join the mailing list at the bottom of this article and receive more conversations like this in your inbox each week.
A few weeks ago, I shared coffee with Mary Ignatiadis, a forest economist with Renoster, a start-up firm in Maine that works with rural communities on establishing carbon credits. I have to admit, even as someone that reports regularly on energy and climate, the world of carbon credits was still quite nebulous to me before this conversation.
A carbon credit is a kind of voluntary emissions-reductions tool that large entities, like countries or companies, can purchase from communities and landowners. Forest carbon credits are typically purchased from forest landowners, and hinge on the fact that forests are carbon sinks that absorb planet-warming carbon dioxide. Mary and I chatted about this particular model of carbon credits, how it involves rural landowners, and why Renoster is shaking things up to make solutions more equitable for rural communities. I also asked her about the industry’s shortcomings, including a persistent accountability problem.
This interview has been edited for length and clarity.
Daily Yonder: Tell me about yourself and your role with Renoster.
Mary Ignatiadis: Sure. I ended up at Renoster in November of 2023. I had just been working for another carbon credit development firm, and I was both really excited about the opportunities for impact that I was seeing at that company, but I was personally in charge of carbon credits for tech-based solutions like microgrids, manure-based energy systems for rural communities in Africa, that sort of thing. And I was a lot more excited about the opportunity for carbon credits for nature-based solutions here in the United States. At that same time, one of my friends from graduate school and I caught up after I saw a post of his on LinkedIn that was actually criticizing forest carbon credits specifically, and as someone who had got my Master’s in Forest Economics, I also had a lot of criticisms of forest carbon credits. So we had a good hour-long conversation talking about all the issues. And he said, you know, my company is looking for a forest economist to help solve some of these exact issues. Would you consider applying? That was a pretty easy yes. So it’s now been almost two years, and I think we’ve made a lot of progress.
DY: I want to take a step back and establish some key terms. What is a carbon credit at its most basic level?
MI: I appreciate that we’re starting here, because I was thinking about this question on the way up, and I think this is exactly where the climate movement starts to lose people, when you get to this idea of a ton of carbon dioxide. A carbon credit is supposed to be equal to one ton of carbon dioxide, but what does that mean? The whole concept of trying to weigh a gas is pretty weird for most people.
I was doing some research on how to explain it, and I found this podcast that was actually talking about the fact that the U.S. Air Force was the first organization to start measuring carbon dioxide in the atmosphere. And they did it because during World War II, the carbon dioxide layer in the atmosphere was preventing them from detecting foreign missiles. So they needed to be able to measure the safety in the atmosphere, so that they could account for it and accurately track enemy missiles. I think it’s important that people understand that a lot of the science underlying our measurement of carbon dioxide and how we think about one ton of carbon dioxide, that actually comes from the United States military.
DY: So it started with the U.S. Air Force, and then clearly, it’s in a very different place today. How did we get from that to where we are now?
MI: The answer is that the United States – mostly the United States – has spent decades putting lots and lots of research dollars into understanding how the earth works. That’s one of the things that has made the United States really great, is how much we’ve put into our scientific research programs, and so now we have an understanding that CO2 isn’t the only gas that traps heat in the atmosphere. There are lots of them. And, you know, methane is kind of the other one that people might know about. It’s also something that we can measure in the atmosphere. So a carbon credit is supposed to represent one ton of carbon dioxide, or something that has the same global warming potential as one ton of carbon dioxide. Methane has 24 times the global warming potential. A carbon credit could be one ton of carbon dioxide, or it could be a smaller amount of methane, and both of those would be equal to the same credit.
DY: So it’s a way to standardize the warming potential of various emissions, and it’s not necessarily just carbon dioxide.
MI: Exactly.
DY: When we talk about the carbon credit market, it sounds like you’re mostly working on forestry. What’s the connection there? How did carbon credits come into forestry?
MI: Back in the 1990s, we got the Kyoto Protocol at the United Nations. At that international convention, it was discussed that deforestation, especially in the Amazon and the tropics, was a significant threat to not just those regions, but to the entire world, because those forests absorb so much carbon, they do so much to regulate the global atmosphere besides just storing carbon. There was a recognition that there is a need to come up with a mechanism to help pay those countries and the communities in those countries to protect forests. The solution that ended up being agreed upon was something called REDD+, reducing emissions from deforestation and degradation. In order to make this program work, they decided they were going to measure how much carbon loss could be avoided based on certain actions on the ground. Then they would award those companies or communities or countries based on how much deforestation they were avoiding. Then they could sell the credits, and there would be this marketplace that would fund it. It was this vision for a complicated payment for ecosystem services scheme (PES). We have lots of PES schemes in the United States.
The most famous one is probably New York City realized that it was a lot cheaper to pay the farmers and landowners north of New York City along the Hudson River to steward the water quality than it was to put in giant water filters in the city. The city of New York paid all these rural landowners to adopt certain land management practices. This is another payment-for-ecosystem scheme, where we are paying forest landowners to not deforest, or to manage forests in a different way, so that the atmosphere stays healthier for people elsewhere.
DY: Interesting. I’m actually headed to the Hudson River at the end of this month to do some reporting, part of which is focused on the rural-urban dynamic there that you mentioned. That gets into this next question, which is, where does rurality come in?
MI: What gets me most excited about carbon credits is when people who are managing a lot of money who are based in urban areas start paying rural communities to manage land in a certain way that may already be totally consistent with their existing stewardship values. You end up with this link that brings us together. I think it’s really easy for urban and rural people to not see the ways that they rely on each other. Carbon credits do a great job of making those connections really visible. There’s so much potential there for those relationships to grow really rich. To date, some carbon credit developers in the United States have done a great job of nurturing these kinds of relationships.
The company that I used to work at is called Native, they’re based in Vermont. They have a bunch of grasslands projects in Montana, and they are bringing executives from Netflix and Microsoft and these other big tech companies that want to buy carbon credits out to these ranches in Montana, where these tech bros are now hearing directly from ranchers about, what are the stewardship issues that you care about, what are the challenges that you face? How can we work together to manage your land in a way that’s more consistent with your vision for having a long term, healthy, sustainable production. For certain carbon developers, you’re creating space for these conversations to happen, for rural communities to have more of a voice. That is not always the case. Native does an excellent job of highlighting rurality and its role in land management. We absolutely need rural communities if we’re going to develop nature-based solutions to climate change.
When it comes to forest carbon credits, the vast majority of forest carbon credits in the United States are being done without a lot of consultation with local rural communities, because they’re being done on commercially managed timber lands that might be owned by real estate investment trust or a timber investment management organization. The idea that they would need to consult with local communities is pretty foreign to them, and so oftentimes, oftentimes they just don’t.
DY: Is there an accountability setup so that they would have to consult with rural communities?
MI: I think part of the problem is that the accountability setup relies on reporting by the impacted parties, and a lot of these impacted parties don’t know how to report. You know, if the company that’s developing the carbon project hasn’t told you what the grievance mechanism is, then there’s no way for you to submit a grievance. I think there’s also the layer of kind of, is it worth going through the process of submitting a grievance if I don’t even know that the system is going to work? So there is a large accountability problem.
DY: That gets back to how we started this conversation, and maybe even how you got into this business, that you had some issues with the way that carbon markets are carried out. I can’t help thinking about some of the more vocal criticisms of carbon credits. The 2022 FIFA World Cup in Qatar comes to mind as maybe the most notorious example of how carbon credits can go awry. For our readers: In 2022, FIFA made false claims about being net zero. It turned out they bought carbon credits for turf fields in the desert, which independent watch groups say is not an effective method of carbon capture. What’s your take on these accountability shortcomings, or the criticism that companies buy carbon credits and then continue emitting, business-as-usual?
MI: We have to be careful that the companies that are buying carbon credits are also doing other things to reduce their climate impact. The research shows that the companies that are putting the most money towards carbon credits, that have invested the most in their own internal capacity to assess whether the credit is actually going to do what it says it’s going to do, those companies generally are trying to reduce their climate impact in a number of ways. What’s cool about carbon credits is that they’re one of the few ways that we can invest in nature-based solutions. You know, there are a lot of other climate solutions that already make economic sense, or there’s already a way to fund them. Most clean energy projects are going to be cost effective, for example. There’s no way to finance better forest management that’s comparable.
DY: It sounds like you’re saying that carbon credits, if done in a way that brings parties together, is a powerful way to do nature-based solutions, because it’s really hard to finance those in a free market situation. Is that right?
MI: Yes. And I think rural communities, the rural landowners to whom I’ve spoken around assessing a fit for carbon projects, ask really intelligent questions. A mill manager recently asked me whether carbon credits are like Bitcoin, that the market is mostly based on the perceptions of the people in the market. And I was like, yeah, exactly.
That’s one of the things that the carbon market struggles with. The market is dependent on perception as a driver of demand. It’s not a good that people need to buy, at least in the voluntary carbon market.
DY: And the voluntary carbon markets companies are entering because they feel some kind of pressure?
MI: Yeah, a lot of companies know they’re gonna have a hard time retaining Gen Z employees if they’re not seen to be acting on climate. A lot of it is about this concept of social license to operate. In traditional forestry, you have this concept of social license to operate, which is, if you’re not doing good forestry and it impacts the communities around you, those communities are going to complain, and eventually it’s going to make it up to the state government, and eventually you’re going to lose your social license to operate. Companies who are buying carbon credits are trying to maintain their social license to operate. If companies like Meta and Amazon were seen as not contributing to the public good at all, I think there would be a lot more pushback against them from the public. So for a lot of companies, buying carbon credits is a big part of their strategy to not face more public pressure for more regulation.
DY: What about the other criticisms of carbon credits, that it allows companies like Amazon and Meta to continue emitting?
MI: I think it’s helpful to think about the alternative. It’s not wrong to say that greenwashing is a concern here. I think it is. But a lot of these companies that are buying carbon credits, who, like I said, are already putting money into other other ways to reduce their climate impact. If they weren’t spending this money on nature-based solutions, it’s not like they wouldn’t be emitting.
There are a lot of incentives for companies to want to look like they’re doing good. There are not many incentives for companies to not do something bad if they know they can get away with it. I don’t think that anyone in carbon markets thinks that carbon markets are an alternative to better regulation of fossil fuels, or to better investment in things that are not fossil fuels. Investing in carbon credits is not a replacement for restructuring our economy around more efficient energy sources.
DY: I want to jump into the rural communities part of this. What do carbon credits look like in practice for rural landowners?
MI: I’m gonna start with private timber landowners who have invested in timberland. Some of them are members of rural communities. If you are managing timberland as an investment, you already know that returns from timber, and especially from pulpwood, are not great, haven’t been great, and aren’t really projected to look great. For a lot of these folks, carbon income is a really attractive option. As a result, the amount of land going under long term carbon contracts in the United States is growing really rapidly.
For example, Maine is looking to have between 16-20% of our entire harvestable forestland in carbon projects by sometime in 2025-2026, whereas just five years ago, it was around 2%. It can be an important financial contributor. It can maybe offset pressure to harvest too early. It can subsidize things like pre-commercial forest thinning that can help improve forest structure and result in more carbon storage long-term.
The reason that carbon projects have been mostly occurring on very large scale timber lands and haven’t necessarily been accessible to your average American landowner is the amount of upfront cost required to enroll. Traditionally, the carbon registries that issue the credits have required a lot of intensive on-the-ground sampling that is very expensive. Renoster’s whole goal has been to take advances in remote sensing that are largely the result of taxpayer investment and better remote sensing data through partnerships with the U.S. Geological Survey and NASA. We take those taxpayer funded research outcomes and use them to generate carbon credits without having to do all that intensive, expensive measuring. By reducing the amount of cost on the measurement and monitoring front, we can take the minimum number of acres from 10,000 acres to 50 acres or less. And in Maine, we’re currently looking for landowners with 25 acres.
DY: In thinking about forests in the U.S., I know that a state like Maine is very different from a state like Oregon. In the East, we don’t really have Bureau of Land Management land. How does that play into this? If you’re a landowner in Maine, are your options different than maybe they are in Oregon because of the way the land is managed?
MI: I mean, there are small, non-corporate forest lands in every state. There is a very high concentration of them in Maine. So that’s certainly one of the reasons that Renoster is piloting here. We all went to graduate school here, we all have a lot of access to great data, we know a lot about the soils in the state, the productivity of the state. We know a lot of people who work directly with local landowners. We have a lot of connections here, and there are a ton of small land owners who don’t currently have access to traditional forest carbon programs. That’s a problem because it’s contributing to income inequality. If already wealthy timberland investors can make money off of carbon credits, but your average landowners can’t. I think when it comes to this idea that some of the income from carbon credits should stay in rural communities, we really need programs like Renoster’s to make that happen.
DY: Can you tell me about what’s coming up in Maine?
MI: I can’t say too much yet, because there’s some things still in the works. But we’re going to officially launch our program this fall. So far, we’ve been in talks with landowners to understand how much interest there is in Maine for enrolling in carbon credits. We’ve gotten a lot of interest. Our role really is to match up buyers to actual landowners. We don’t have the kind of pockets to just buy a whole bunch of credits and then sell them later. We have to make that transaction happen at the same time. But the due diligence process for selling these credits takes months.
DY: That’s exciting. I’m looking forward to seeing what comes of it. My last question for you is about what inspires you in this work. It sounds like there’s a lot to be watching in terms of designing these systems equitably and maintaining accountability, but are there any areas that you’re watching that make you feel hopeful?
MI: This is gonna sound really cliché. I’m inspired by the conversations and connections that I have with the landowners we’ve been talking to, you know, people who have been in the forest industry, people who have been loggers for decades, who are seeing forest carbon as an opportunity to engage in a new form of stewardship. I think the stewardship ethic in rural communities has always been really inspiring to me, and I think forest carbon can help connect that stewardship ethic to the realities of climate change. If forest carbon can give folks a way to engage with climate change that is empowering, like not pie in the sky, but tangible and non-politicized, I think that’s a really incredible thing.
This interview first appeared in Path Finders, a weekly email newsletter from the Daily Yonder. Each Monday, Path Finders features a Q&A with a rural thinker, creator, or doer. Join the mailing list today, to have these illuminating conversations delivered straight to your inbox.
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