Redesigning the Climate Landscape with Paul Chatterton

I'm Anton Vakov and this is the Climbed List Abroad. This episode I'm coming to you from Vienna, a city that feels like the perfect backdrop for a conversation about climate, finance and the future of our planet. Vienna is where history and innovation collide. Once I've debate Hoven and now I hubbed for leading climate scientists, policymakers and impact investors tackling the world's biggest challenges. For the United Nations Climate Initiatives and a growing sustainability movement, it's the ideal place to meet an innovator with a bold approach to saving nature. My guest today is Paul Chassison, founder of the Landscape Finance Lab. For Paul, the focus isn't on isolated projects, one conservation effort here or carbon offset there. Instead, he thinks in terms of landscapes, vast, interconnected regions like farms, rivers, forests and cities, where communities and industries rely on nature's resources to survive. Paul's team brings everyone together, farmers, landowners, conservationists, investors and governments to create a single large scale investment model. The result? More control, more funding, more local benefit, and a system where restoring nature and making a living go hand in hand. Take Scotland's flow country where Paul and his team are restoring the UK's largest carbon sink. The Petelands that are the focus here store twice as much carbon as all of the UK's forests combined. Decades of degradation have turned this area into a major emissions source, but the Landscape Finance Lab and its partners are pioneering an investment model that generates carbon and biodiversity credits, attracting private investors while ensuring profits stay with local communities. This initiative is actively restoring 5,000 hectares, with a goal of 250,000 hectares by 2030. This helps farmers, crofters and landowners benefit financially from conservation while revitalising ecosystems and supporting local jobs. The most interesting part of my conversation is when Paul shares his realisation that business has a crucial and highly active role to play in driving investment into nature. Nature restoration and the preservation and regeneration of biodiversity landscapes must be an investable asset. So let's dive into this conversation about landscapes, finance and the future of nature based solutions with Paul Chatterton. Welcome to Climate with his fall. It's very good to have you here. Welcome. Thank you very much. And nice to be talking to a fellow Aussie about these sorts of things. I don't meet too many in this world of environment and climate. It's great to see Australia expanding again. We're moving abroad, which is very exciting. And amazing as well to speaking to an Australian that has been based here and been for 17 years. That's correct. And you've laid down roots and now, more recently, you're coming back to Australia, but we'll talk a little bit about that in the future. Your story spans activism, conservation and finance. Let's start at the beginning because every great financial visit has an origin story and you'll start soon. So you began your conservation career sitting in a Eucalyptree to stop logging. What did those early experiences teach you about protecting nature and what you scared of heights? Terrified. I had done a lot of caving, single-rope caving where you're absurling down, so I knew how to do it, but if you're not on a rope, it's terrifying. I was sitting on the first branch of one of these fabulous Eucalyptries in southern Tasmania, the mountain ash. 30 metres off the ground. So the tree itself was 80 metres off the ground and this was part of the tactics. We sat up there for a week. If you ever have, if you want a really silent meditation retreat, go and do it for at 30 metres above the ground in a Tasmania forest. It's spectacular. Those forests were, those trees were destroyed, but the forest is still standing and it was part of the campaign to protect the tall Eucalypt forests of Tasmania, which are now part of the Heritage List. Yeah, I'm very proud of what we all did with that campaign and it taught me an enormous amount. Paul, as you're talking, we're talking about trees. I get a very gandof resonance, very Ian McKellen, resonance from you. So that's going to stay through the whole podcast of Suspense. So let's move from Tasmania and 30 metres up to Borneo, Congo, Scotland, some really fascinating projects. Which project that you've worked on in nature has had the biggest personal or professional impact on you and why? I would say the place, Papua New Guinea. New Guinea as an island is astonishing. I worked there for six years. I led WWF's operations in New Guinea, conservation operations in New Guinea. We had six offices, worked on reefs and rainforests, but there is no place like it. I've been to all of the other rainforest blocks on this planet. New Guinea leaves them for dead. It's so wild. It's so. If you look at it from a scientific point of view, evolution, from an evolutionary point of view, it's got some of the oldest living organisms on the planet. And there are 1100 languages in that one islander, a fifth of the world's languages. So it's the most exciting place for an anthropologist, which I was trained in. For conservation, there's no better place. And in terms of just insanity or more to the point, difference from our urban, western world. It's paradise, it's fabulous. And we lived just 50 metres from coral reefs. The kids grew up swimming in the coral reefs. It was a great place. So I think I learned an enormous about what can go wrong and how not to achieve results in New Guinea, which made working everywhere else on the planet much easier when we got to the Congo and Borneo, for instance. So there's lots to drill into there and I think we'll do that in a little bit. But let's talk about activism or the world wildlife fund to finance. What's motivated you to swap tree trunks for spritz hits? Well, city up those trees in Tasmania, I went back 15 years later, still nothing and changed. But within the next two years, it changed dramatically. And what caused that change was, a few of my friends got involved in financial activism. They worked with the shareholders of Mitsubishi, the Japanese company that was buying the woodships, convinced them not to buy Tasmania woodships anymore. They worked with another investor, a set of investors, including Patagonia, and purchased the woodship mills, changed the whole industry overnight, not quite overnight, but within a couple of years. So the sort of change that we had been working on for decades was dramatically accelerated by finance. I think that, that, among other things, taught me that it followed the money, go where the money is, and see if you can influence that because that changes the system. And it brings its own challenges as well, of course, you know that. Of course. It does. Challenge is an opportunity. I guess that's always the framing. You talk about follow the money. I talk about following the business. And on the business, what on earth was Patagonia doing buying woodship mills? They've got a commitment to protecting the large wilderness areas on the planet. They invested in South America, a massive area in South America. They also did that in Tasmania. This was one of the great wilderness. This still is one of the great wildernesses on earth, the southwest Tasmanian wilderness. Those trees are sitting up at the tallest flowering plants on the planet. It's their extraordinary. They grow to, or my tree was 80 meters. They grow to 99 meters. I think there's one that was measured at 110 meters. So they arrive all the redwoods in terms of size. Very special place. And Patagonia's commitment is to protect that. Paradoxically, you could have had forestry and nature protection at the same time if there had been an agreement between conservationists, industry and politics. But we missed that chance, sadly. And that's what we want to do now with landscapes is get in before that conflict has to happen, create visions that benefit everyone. And take them forward. So step ahead of that conflict. It's a failure if you've got to conflict. So can we all see a future world that we can create now? One of my early mentors was a lawyer who was a property lawyer by training. He used to tell his clients if they got into criminal trouble to bring a toothbrush because they'd be in jail. Well, he wasn't going to be a very good defendant or defense lawyer. So I fully agree with you on the conflict point. There's real power in mediating to an early solution before things get to the point of tension. Having said that, sometimes you need conflict. You need crisis. And that is the environment that we're in now, right? There's a crisis creating spoke scope for change. Totally. Yeah. So conflict can create a bit of juice for the discussions. But the aim in the long run is to find a way where we can all escape to Sonarmy together, get in the same lifeboat and survive whatever it might be. So mind your analogy. And that means seeing the conflicts a long way off so that you've got the time to deal with it. Also, the good thing about landscapes is that if they're very different to the normal challenge, which is that if you're fighting over a logging concession, the conservationists want it, the loggers want to log out, the conservationists want to protect it. If you're just looking at that one concession, it gets very hard to reach an agreement. If you look at the entire river valley or forest area, then you can reach an agreement where there can be some logging in some areas and there's protection in other areas. If you take the whole thing, the whole question out to another scale, it's much easier to find solutions than it is when you're just locked down in individual concessions. So landscape gives you that ability to think a bit more broadly and think a bit more creatively and think a bit more long term about where we might be in the future. And we need that with a world that's getting very turbulent at the moment. We need all to be able to think creatively about what that resilient future might look like because we have to start building it now. Zooming out to see the bigger picture. Love it. So let's pivot to your journey. Your career has been a mix of heights, literally, and challenges. What about the pivotal moments, the winds and the moments where you thought this might not work? Let's start with what inspired you to create the landscape finance lab and how does it build on your earlier experience in conservation? Specifically, I'm curious about the lab, the wire lab. I mean, we got 280. We helped the governments of Indonesia and Democratic Republic of Congo get $280 million worth of carbon investment for those two projects. That's money we haven't dreamed of in the conservation world. And when you have that sort of money over a 30-year time frame, it's a totally different picture. So let's start thinking about rebuilding entire forest ecosystems. You've got to start thinking about who's going to hold this, starting to train the next layer of leaders, building training institutions and so on. Much more exciting prospect than doing individual projects. And we thought, can we do this in other parts of the world? On forests, can we do it on reefs? Can we do it in agricultural systems and so on? That's where the lab was born from. And you have done a reef in as part of the lab? The first experiment we did was a friend of mine who was leading WWFVG invited us in. And with her, we helped build a reef protection system for FG and an investor in small businesses that are reef positive that help protect the reef. It's called Matanataki. Fantastic. They invest in all sorts of little businesses that are doing things that are genuinely positive for the reefs. So Matanataki creates an instrument, gets someone to buy it, and then invest that money into small business that's a reef positive, ish. A little bit the other way around. So Matanataki is a small business incubator. They went out and found 120 businesses that were doing things that looked like they might be protecting the reefs. They incubated 20 of them to be investment ready and then they connected them with investors. And to give you an example, the first investments they got were for buying a couple of waste dumps that were poisoning the reef and turning them into recycling centres. And that's been quite profitable. They're doing floating solar, they're doing coconut oil production and a whole range of other things. It's a great story and that's a FG and entrepreneur, Jodie Smith, who's leading it. But we were also, we built, we helped the FG and government apply for $30 million to build a great barrier reef marine part type thing for FG, who would be very different in FG, of course. But six years later, the GCF hasn't, the Green Climate Fund hasn't made a decision. So it shows you the difference between private sector action and public sector action. Private sector can be very fast when it wants to, when there's a clear business story involved. That's it. So lots of high points, and we've talked a lot of the high points, but every leader has their tough moments. Can you, can you share a moment when things didn't go as planned? Oh, well, launching the lab out of WWF was tough, very tough. We had no capital to, we had a, we're on the aircraft carrier ready to take off with no fuel in our tanks. And then COVID came very soon afterwards. So everything looked, looked pretty rough. But within six months, our tanks were full. We, even during COVID, so we'd set up as a, as a virtual team globally, thankfully. During COVID, our first projects, one of our first projects was to kick off the Peteland Restoration Program in Scotland. And we did a four hour Zoom call with 50 people from across the north of Scotland, including farmers who've never used Zoom before in their life. And we came up with the vision for that work, which is now going strong. You know, that's working. We launched that instrument. Well, they launched that instrument at the beginning of last year. And it's going very well. Opportunity out of crisis. Yeah. I love it. But let's, we'll talk about the Scottish Peteland in a moment. And at that moment when you were, when COVID hit, I remember when COVID hit, and it was just sheer terror. Mm. She didn't know I was going to come out the other side. How did that feel for you? Well, thankfully our team was across the world. So we already had people in places where, where the landscapes were, where we were used to working, working on Zoom. It was still terrifying. We had no idea where the next projects would come from or whether anyone would be able to do anything at the time. It turns out that it's all about local action. If you don't have a local team leading a landscape, you can't go anywhere. So we'd already done the work to find lots of people who were leading teams like that. And we continued to work with them through COVID. They worked with their teams on the ground where they could, they kept the momentum going and, and quite a lot happened during that time. We were surprised at how much could, could happen, we, but we got through it. It's interesting. One of the commonly repeated stories about businesses born in crisis is the ones, is they're the ones that tend to be the most, most resilient. The businesses born during the GFC or the, or the, or the stock market crash or the ones that survived are the ones that do exceptionally well. So it's, it's, it's a good starting point for the landscape lab and, and for your fund, which we'll talk about in a minute. So you talked about business, small business being important in, in this process of saving nature. But it's often been blamed for destroying nature. And I know what's the role of money? Nature's being destroyed by money, but it can also be saved by money, your words. Can you unpack that idea and, and does money need therapy? We all need therapy, don't we? The money's just a tool and business was created, what 13th century is business skills in, in, in Europe. It was, it was created to serve community. And unfortunately now, community is serving business. So how do we bring those two things back together? Landscapes are one way that that can happen where, and what we're finding, it's, what's, become very interesting is that the more we build landscapes, the more we realize that the, the value that's being produced from those landscapes, whether it's cocoa production or, or Pete lands or, or whatever, the value tends to be taken in places like London and Tokyo and Sydney. It doesn't go back to the people who actually produce the value in the first place, but landscapes allow them to create their own legal instruments to manage the, the sale of the products, whether it's carbon or, or cocoa beans or whatever, and, and, and to keep some of that profit locally. So that's, that's, that's only a recent realization. But it's a very powerful one. It's, it's becoming a, a really big motivator for the communities that we work with that, that they suddenly realize that they can, they can actually run a carbon project themselves. They don't have to get a carbon project developer from Zurich to do it for them. So like a co, co, co up for carbon, carbon project development? Yeah, it's, it's rocket scientists, science to run a carbon project, but you just hire a rocket scientist and they do it for you. So why not do it yourself rather than hire a company that hires a rocket scientist in Zurich and keep the profits for yourself rather than send 50% of it to Zurich. Cutting out the middle man, I love it. Yeah. So the instrument that you're talking about in this concept, what is it, what is that instrument? All right, let, let's go back to Scotland then. So, when we, we were invited in to Scotland, that was 2020, when we did that first, first work, what we discovered is that there's lots of little restoration work on the Pete lands of Northern Scotland. Petelands, by the way, the most powerful natural climate solution. Petelands? Swamps. So there's, these are Pete's, Pete swamps. I mean, there's, there's many types of Petelands. I won't go, there's blanket bogs and ladder bogs and, you know, many, many, but Pete is basically Spagnum moss that grows in, in wet places. I know what that is, but only because my mother does floristry. Yeah. It's the stuff that comes with your flowers, that's right. So the north of Scotland and, you know, Norway, Finland, northern, northern Canada, Petelands everywhere. And this is the greatest container of carbon, natural carbon this planet has. And the, and the, the Pete's Wamps of Borneo and the Congo and Brazil as well. So there's 30 times better at securing, at storing carbon than tropical rainforests are. Why the hell have we not been working on Petelands at scale, like we have been on rainforests? I've got no idea. Anyway, we turned up. The rainforests are pretty early. Basically. Well, the Petelands are very pretty as well, but you've got to attune your eye to them. Like, like we had to with rainforest. So four years ago, we were, we were asked by the Scottish government and a team up in the north to help them out to look at how to, how to take these small projects and get them to scale. Because you know, doing it in, in tens of tens of hectares, hundreds of hectares, thousands of hectares, just doesn't, doesn't, won't solve the problem. That one area up in the northeast of Scotland, the flow country where we, where we started working, it contains twice as much carbon as all of the forests of the United Kingdom combined, this one area. And what we decided to do was to create an instrument where any landowner could restore be paid to restore their Petelands and also be part of a mutual. Take, they, they share in the profit jointly. What they decided, so they, they ended up creating two legal instruments. They are not for profit that was held by, by six of the organisations that are trusted by, by everyone in that, in that landscape. And that held a full profit that could do all of the, the Peteland restoration, that basically hired the carbon, the, the rocket science to, to build the rockets. That whole entity was set up by February last year and it's now off. It's restoring the first five, five thousand hectares of, of land. The first bulldozer started working in July, I think it was. That area was also launched as the first, awarded the first world heritage listing for a natural area in the United Kingdom ever. The king came up and launched it in his own private train. He came up and launched the whole thing. How many, how many, how many farmers, how many landowners are involved in this instrument? So there's, there's about 50 different organisations involved. As at the moment there's only three landowners whose land is being, is being restored, but there's a whole set of other landowners. The biggest states, the farmers and what's most interesting is the, the crofters, the people who are effectively the indigenous people of Scotland who own little tiny patches of lands usually down on the beaches or in the worst parts. They're the ones pushed off the land back in, you know, during the Battle of Colodon if you've watched Outlander. But they're the really interesting ones because they're the ones who hold, they really hold the culture of Scotland. So all of these three groups are working together. They don't usually, they usually have, they have each other's throats and are getting benefits from this system. It needs more investors. So if you're an investor, look up flow country, green finance initiative and put your money in. It's backed by the Scottish government. So it's a safe investment and it's really, it's really working. So when you say it needs more investment, who's buying the instruments in this contest? Who's buying the carbon credits? Yes. At the moment it's philanthropic. There's discussions underway with some banks, with, with pension funds and, and some carbon developers as well. But they need, they need much more investment. How much cash has gone in? Not a lot at the moment, a couple of million. Couple of million. So there's, there's probably about half a billion pounds worth of investible, Peteland restoration and the returns are quite nice. I won't go into the details. I'll get the number, rock numbers wrong, but at a small scale it's quite profitable. So this, this, this point is interesting. There are funds out in the market that are doing their own carbon investment that are securing off takes. There's a fact, I've got a, a fact from our research that global conservation finance needs $700 billion annually. And yet we've got a, a pristine project that's worth, you know, 500 billion pounds that's not attracted investment. What's, what's happening there? So this is, this is the, where we've got, where we've got the problem with money. Money is designed to invest into concessions, into farms, into factories, into individual projects. Projects are what are, what's destroying the planet. Because they compete with each other for the resources. A landscape brings those projects together, integrates them so they don't conflict with each other and conflict with nature and gives them, gives them an ability to deliver at a much larger scale and solve much bigger problems. Problem is that, that's a different model to what most investors are used to. If you think about it, there's only a few thousand landscapes on the planet. Each of them costs ideally a hundred million to, to secure the carbon and biodiversity and water. So you're talking, talking about tens of billions of dollars, you know, the equivalent of one very large bridge or an aircraft carrier to transform the whole planet and meet the SDGs, at least the climate and nature SDGs. So we've got to rethink the way, so it comes back to your question, is money, the problem, money is an instrument. It's how we think about money that we've got to transform. We've got to think about building instruments that can link projects together to deal with those larger problems that, that nature is suffering, that communities are suffering. And that's just an engineering challenge. We're starting to see that it's possible to do that. So in some sense, I suppose, on the off-take side, you're shaping a market where you were with a lab and now with the fund, shaping a market that doesn't exist yet. What do you think is the biggest hurdle that you need to overcome in creating that market? It's just simply seeing landscapes as an investable proposition. And that shouldn't be too difficult. In the case of Scotland, the flow country is two companies with a clear management team and a set of products and a balance sheet that's profitable. So if you look at it as a business, it's no different to any other business. Where people get unstuck is that it's. An infrastructure business, you might say. Exactly. It's a nature infrastructure business is what it is. That's where it's difficult because people haven't seen nature infrastructure businesses. It's no different to building a bridge. You build a company to build a bridge that looks after that asset for a hundred years. And you employ architects and still welders and a whole range of different operators. You've got to put a lot of pieces together to build a bridge or a skyscraper or whatever and then look after it. Why can't we do the same thing for nature? That's what we're starting to design now. Does that make sense? It makes sense. I guess there's a scarcity piece in there as well. Right? So one of the bits of feedback that we've had on carbon markets broadly is that they're not verifiable and that the. I read a fascinating post on LinkedIn by someone at one of the major New South Wales universities that said, "We refuse to endorse any activity by the university in purchasing carbon offsets or similar because it's just not effective." And I saw that and it made both blood boil. It was like, "There's no science behind this. Just because you're the smartest people in the room means you can say it's not valid. I understand there have been issues with carbon markets over the last five years. I think the Guardian has a lot of good things but it's also got a lot to answer all." Having said that, it's raised the issue. It's raised the profile of the issue. Is a high integrity carbon unit or a high integrity water right or whatever financial carbon style instruments that you're producing? Is the quality of the product that you're producing important in shaping value? Completely. Both the credibility within a community and the scientific quality and the integration into political systems. So project carbon does fail on all three of those. There's plenty of very good project carbon projects. There's no question about that. The criticisms that we're in the Guardian are correct for some projects, not all of them. Most of them are fantastic. But the system as a whole doesn't guarantee credibility and scientific quality all the way through. When you build landscape scale, carbon projects or you can overcome that because you have to engage all of the players in the landscape that gives you the credibility. The science has to be done well and openly with everyone and you always will have governments engaged, some national or national governments engaged. So you'll get a much better integration into the national systems. And if you're lucky in the case like the Scottish government endorsement by the government that this is a highly credible product, that's quite unique. There's not many of those sort of projects around the planet. That's where we have to get to. One of the things that would respect might be missing from the Petelands project, which sounds like it's been present in the following projects that you and I have spoken about, is the offtake. So who are the local off-takers of that product? And locality or at least, the thematic relevance seems to be an important component for the people that actually buy these credits. Yeah, very much. And if you can involve investors in building the system, they're much likely to stick with it for a longer period of time and if it's in their local area, then it makes a lot more sense for them. So we've talked about carbon credits. I mean, we could talk about the Scottish instrument for hours, I think. But let's talk about other financial instruments. So you're developing a national system in Ireland to pay farmers for ecosystem services. How does that work in practice and how scalable is it? Yeah, so that's basically scaling the Scottish system. So Scotland, it's one landscape. If you do five to ten of those, you cover the whole of Scotland. In the Irish case, we've gone the other way. We built a standard for carbon, water and biodiversity payments that invest in landowners that are repairing petlands. And there's an element in that where, and we're still working out the details of this, where if you're coming together in groups in a catchment or in a common age or in a landscape, you get extra benefits. How are we going to do that? We're not sure. We're still working that out. The Pitland Code was launched in October for comment. The comments have been uniformly positive and it'll now be. I mean, you wouldn't complain to us about being paid to do stuff, right? So. Well, and the challenge is now to find the properties that are willing to do the transformation. It was already. we were integrating a biodiversity payment system from the west coast of Ireland that already has 800 farmers involved. So they don't have the money to keep paying the farmers. They've got too many farmers involved. So by linking them up with this system, this year we build the financing for that system. We launch the code and we're talking to the corporates of the world. The airline industry and the tech industry of Europe is based in Ireland. So they alone have a massive incentive to invest in carbon and nature restoration projects. But there's plenty of Irish businesses that. It makes good business sense for them to be involved in Pitland restoration. Guinness, for instance, depends on water from Pitlands. It's. you know, it's all. Many of the whiskies of our island depend on Pitlands for quality water. So it looks positive. We've got to lock it all in still. Is it. it sounds a little bit like a land registry or most? The system. Not check. Not up, but we will build something like that. Well, certainly there'll be a project registry that's now being put together. I mean, so the registry, yes, but it's a government-endorced financial instrument, which folks are. So the government has done its job by priming the pump with this project in the. Do you say West Irish region? Yes, that's right. And now they think of it as institutionalized. Or you're working with it institutionalized it and. Get outside capital in. Yeah. Or localized capital in. So I just re-stating to confirm my understanding. It's. there's many moving parts. Sorry, I've not been very clear about Pitland financial island. It's called. You can find it on. Just look that up. The website up and the standard is the first stage in building the natural. Building the incentive that brings farmers and other landowners into the system. And now we build the investment process for linking them to investors who want to buy their carbon credits. Right. Their water credit. So you're creating a market at scale. Yep. Fascinating. And it does sound like you're bringing in the investors at least at a systems level earlier in the process, which is brilliant. So we talked a bit about carbon credits by diversity credits. What's a biodiversity credit? So this is the addition in Ireland. So I'm not sure that there's any country in the world yet that has a carbon water and biodiversity payment system in one package. That's what we will. we've launched with the Pitland code in Ireland, which will be running this year. Pitland standard apologies. A biodiversity credit is basically if you can show that there's increased biodiversity on your land because of your action or by not doing things, by taking certain activities off your land, then you get payments. And that's what these 800 farmers are already engaged in. It's a. I mean, the background science is very, very complicated, but the actual delivery with farmers is quite simple. It's just a card system where they tick off certain factors within their land that gives them a rating. And then each year they do that card system and check their progress and they get paid according to the change in their land. So how does. we'll get to monitoring the say, I was going to say, how does monitoring work in that context? We'll get into that in a second. By diversity, how does it work in with carbon? There's my understanding that there's some kind of link between the two and the effectiveness of carbon storage. There's some link, but it's not direct. So you can plant trees in India and create a whole lot of carbon, but if you chop down native forests and lost tigers as a result, your gain is not good. But in most cases, carbon and biodiversity need each other. Carbon depends on natural growth, forests, peatlands and other carbon storage mechanisms, kelp and so on. And they provide those habitats, provide home for all sorts of animals. And this is a really personal fear, I think, the animal piece. But more and more, the more I talk to people in this space, the more I start to see it. But it's hard when you're in a city. You don't see it. It's very hard. And coral reefs, if you've ever had a chance to go diving in a coral reef, it's astounding. It really is incredible. And we're losing them. Our children, there'll be very few places where they can go and see that astounding diversity because they're going very rapidly. What transformed me was when I was 18, or 20, I think it was, I went on a study tour to the United States and I decided to go down to Costa Rica and have a look at a tropical rainforest. I don't know why. I also wanted to look at a country that didn't have an army. They got rid of their army at that stage. They got it back later. I walked into the Monteverdi cloud forest in the north of Costa Rica and that was the first tropical forest I'd ever seen. And it blew my mind, hummingbirds buzzing past. Every leaf is different from every other leaf. So much diversity between the different trees. And honestly, that was an epiphany. It, I decided this is what I'm doing for the rest of my life. This is very special. I know these places are threatened. I'm dedicating myself to protecting them and I have been ever since. By any means necessary, including finance. By any means necessary. By the most loving and gentle and peaceful and the indecrited means possible. Yeah. I might be a little bit more markier, but this is the Gandalf outlook coming through. All right. So let's talk about practical applications. We talked about benefits to farmers. The first nations or the original crofters in Scotland, that's an interesting first nation's population I've never heard of. But what do farmers and first nations communities gain from these projects? And how do you engage them, thankfully? So what do the non-indigenous people gain from these projects? That's the flip side of the question. When we started in Scotland, literally my research was watching five series of Applander. But it was very useful because when I got there, I suddenly realized that everyone we talked to within three sentences mentioned the Battle of Colodon, which was in 1752, I can't remember the exact date, but what's going on here? The landed gentry, the lords who had a big, bigger state, they were talking about it. The farmers were talking about it, the crofters who had been pushed off the land back in 1752. They were talking about it. And that's 200 and whatever, 300 years ago, nearly. Why are they still talking about this? What I, so I did some research, turns out that 432 people own half of Scotland. Wow. So already you've got this massive concentration, which means some people lost a lot and some people, very few people gained much more. And they've been living with that side by side ever since. So how do you, I said to the head of National Parks for Northern Scotland over a whiskey one night there, this is a post-conflict landscape. This is extraordinary. It's indigenous people, just like Australia, it's indigenous people who've been pushed into the corners. And then all of these others, who some of whom are indigenous as well, but how do we deal with this? We've got to treat it in the same way as a post-conflict landscape. Everyone talks separately. They come up with their own picture and slowly start to be honest with each other about what's going on here. I'm not sure that there was that much honesty about that history. I'm sure it gets very dark if you go back. But once people could stand in their own groups and see that there was a benefit in working with these other groups together that everyone could grow, then the story started to change. What changed even more was when they all got together on a farm. And I didn't go to this meeting, but on some farm within the area. And they came back with one word that summed up where they wanted to go. They wanted resilience was the term. And it wasn't the resilience that ecologists think about, you know, ecological resilience or climate resilience. It was community resilience and resilience for their children. That was very, very powerful. And they built the financial instrument on the back of that. I think one other thing to say, they came up with a remarkable commitment that they would float the smallest boats first, that the smallest actors who usually can't get engaged in the carbon gain because it costs money to build a carbon project so you can get money back. They would have the first chance at getting the profits and then the next largest and then the largest. Because of course the bigger states can afford to do it themselves. And they can wait. But it's in their interest to have all of the others go together with them so that they don't have that conflict within their community and within their landscape. And they can all be seen as acting as one. That's profound. The capitalist in me comes back to, is it money that they're getting? Is it community benefit? Is it this organization that's managing this instrument or these organizations that have come together to manage this instrument? What are they doing? Is it grants? Is it cash? Is it community infrastructure? So they're starting to get the commercial investment in. They've got to pay their investors back. But there's a very nice profit that will come out of the current financial. Modeling shows that. So they get to keep the profit instead of the Zurich carbon company. They then have decided to share, to keep 10% of that, to do community projects that they all agree on. So 90% goes to, well, after the costs of the business. 90% goes to the land. 10% is kept for those projects. So there's a financial, is an immediate financial benefit to the landowner and to the community. There's the nature benefits, getting a much more intact nature. And there's a sense of togetherness. I think that's come out of this. They already had to some extent, but now it's giving them purpose. I think what they're already seeing is the employment that's coming out of it as well. There's a whole lot of people being employed on running the system. They're now starting to hire bulldozer operators. They're backing some of them to run their own business and buy more bulldozers so that they can build this thing. So there's an industry starting to develop here. The university is starting to put on courses for bulldozer drivers or at least talking about. A butterfly fact. You get the structure right and everything else flows from it. And it's because you've got some scale as well as whole range of players engaged. One thing that we should mention before we move on from this point is on the biodiversity point that biodiversity has been shown to actually increase the productivity of land. Ah, yes. I'm sure that's in the value of land as well. So we're exploring an opportunity in New Zealand and this is something a new segment that we're working with on the podcast. We're exploring an opportunity in New Zealand, the climate bank that we're building through a climate to list. Specifically around soil carbon biodiversity in the ag sector resilience in the central otago region in New Zealand. Where do we start? I've got my view. What's the jumping off point? What's the problem that they solved? Farmers want to do the right thing. They're doing the right thing but they're not getting the financial outcomes. Farmings are really hard. It's financially stressful. There's been a lot of consolidation. You know, New Zealand has had an interesting run at monocrop based tree planting literally in the last couple of weeks, last couple of weeks before Christmas. They can that. Farmers want to be doing the right thing but people are approaching them and saying, hey, plant forests on this land which is growing food. One of the farmers that we spoke to, we had an offsite exploring the landscape in central otago. One of the farmers said, I just don't want to stop because I think food needs to come from this place. But by the same token, I can't make money. How do I make this stack? The climate is getting more variable. They're getting hit more with different things. They're getting the temptation of selling to foreigners, selling the land. How do you manage that? Allow folks to keep farming but do the right thing and still make money. Interesting. And, you know, these must be some of the best food in the world. It's one of the cleanest environments on the planet and New Zealand as a committed I know to doing things very well. How can you promote that at a landscape scale? I guess a couple of questions. Who else in their valleys wants to do the same thing? What do they want to do together? Can they do it? Can they think beyond just farming and work with foresters and conservationists in that landscape? I'm talking to some people down in Arotown and what's the ski resort? The Queen's Down. Who are looking after 600,000 hectares of mountain country where they're reintroducing the animals and birds that have become extinct, mostly the birds that have become extinct in the mainland. They're bringing them back from some of the little islands off the coast. So they've got an opportunity to get nature investment into all of those mountains around that fabulous tourism area. Can they join up with farmers? They need to join up with farmers because they need to be connecting with the farmlands and making the farmlands much more useful for the birds. If the farmers want to produce products that are nature friendly and nature positive and have a good story behind them, then that's a nice match. This was also the area where Lord of the Rings were shot. Saving Middle-earth is the tagline. You got it. Maybe we put these guys together. Maybe they hate each other. They're probably already fighting with each other and will for the next set of generations. But I think this is the challenge. How do we all see ways to help each other in creating more resilient earth and creating products that benefit our families and our community? And how do we get the money up front to pay for all the hard work to get this going? Let's move to RAP. So fast for five years, how optimistic are you about scaling nature finance to address the biodiversity in climate crisis? It's a massive challenge. We've got a massive opportunity right now. I'm very excited. We announced a partnership with most of the world's largest investment advisor. They have $16 trillion under advisement to build a nature positive landscape facility, a fund of funds. We're calling it the N+ facility. So this is the first step is a $160 million investment fund with an accelerator for landscapes to help them get investment ready. And that will launch later this year. That's super exciting because the hard part of it is the money at the end and at the beginning. The little bits of money to get everyone together, get the vision clear, get the investment story together and get the first big investors to put the 2050 million into that landscape to kick it off. I think we can solve both problems and we're looking for investors at both ends. The philanthropic investors to invest in that small end and the big commercial investors to invest in the big end. So you're looking for catalytic capital at the front end? Is that the correct? Correct. And so that's this year. That's our sole focus. All our other landscape work fits into that and we'll be linking to that. Brilliant. Okay. So for businesses or funders who are looking to dip their toe in the water in this space, how should they begin to engage with the way that you're thinking about it? Are they reading something? Are they listening to a podcast? What's the approach? Getting in touch with us, we'll send them a deck. Happy to have a chat. That's probably the simplest way and take it from there. And if you're building funds that invest in landscape, we're very keen to talk to you as well. We particularly focused on a fund of funds because it gives us the ability to work with a set of funds managers who are interested in both nature and getting to landscape scale. And together learning how to do this because we're still building the plan as we fly. I guess one of the pieces of value that arises for people that invest in your fund of funds is you're doing due diligence on all of these funds, which means that the ones that rise to the top then become interesting candidates as this wave of investment starts to push into the climate landscape. Yeah. Well, I mean, what's accompanying for us is that we have Mercer as a partner. They have thousands of financial analysts who can do the due diligence from a financial point of view. We've got some of the world's top nature and climate analysts. So we'll add Mercer will give us the commercial quality and some of the commercial impact quality. We'll take that the next level in terms of real nature and climate results. Mercer is a worthy adversary, co-op petition candidate for our climate bank. So that's fantastic. So in this work, who inspires you? Is it a colleague, a leader, a parent, someone in history? I think that in going back to my early days of Tasmanian, the Tasmanian rainforests and the tall forests of Tasmania, I was lucky enough to work with Bob Brown. And he's a divisive figure, but as a person, he's remarkably inclusive. Bob Brown would always take us beyond the conflict to the potential conclusion, beyond that, the spiritual values we all need. The values as humans linked to a planet and linked to nature. One of the conversations we were having earlier, the Ministry of the Future, one of the books that's influenced me a lot, they talk about the spirituality of our connection with nature. How do you think that relates to, so Bob talking about values and nature and connection to locality and geography? How do you think the structure that you're innovating on in the financial space helps folks to connect more with their place? Everyone has their own spiritualities, that's for them. But what happens when you come, what I see at least is, and I saw this in New Guinea very deeply, when people think about their land, when they start talking about their land, when they come together and start thinking what might be possible in the future, with our land, all of our land together, it becomes really powerful. Those farmers, those stakeholders on that Scottish farm, everyone who went to that meeting came back with tears on their eyes. I don't know what happened, I wasn't there, but they came back with something with a spark, which has led on to that work. I mean, everyone is proud of where they live, or most of us anyway, if we have the privilege to choose where we live. But to take that another level where we're driving forward, the meaning of that land and that place that we live in, that's something very special. And I can see more and more of that happening as people come together to deal with the big problems that they're facing, but also to start creating rich futures. There's more and more communities who are doing that. And if we can get a financing system that puts money behind that early enrichment process, then we've really got something. That's my dream, maybe I'm a fool and a fantasist. I love your dream, Paul. I'm going to be up there in that tree 30 metres up right there with you. Final question, which I ask of every guest, what's the single biggest opportunity in the climate space in age finance that more people should be paying attention to? Don't say natural capital because there's lots of. Well, I was going to say insurance risk and insurance finance, but there's an even bigger opportunity behind that. So with Brisbane, the big problem is the flooding. It costs the Brisbane floods, it costs $8 billion back in 2022. I was there for both of the floods, so I kind of experienced it. It was surreal. You know it. That will happen like clockwork every 10 years if not shorter from now on. So there's actually a fabulous opportunity for the insurance industry to get together and think about how to plant trees to slow down the flooding and reduce the costs later on, but you've got to do it now, not in 10 years' time. How can we build those sort of instruments, those financial instruments that invest now in the future? Very complex, but the science is all there. The parametric insurance is a standard product in the insurance industry. Let's apply it to nature. I could feel you visiting the staffters, Gandalf speaking to me right there. I can feel you magicing this stuff into reality. Paul Chanathan, thank you very much. Thank you, Anton. That's a delight. (upbeat music)