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Sydney Chamberlin (00:00):
Um, for those of you who I haven’t yet had the chance to meet, my name is Sydney Chamberlin. I’m a project manager for Climate and Nature Solutions with the Nature Conservancy in California, based here in Sacramento. Um, you know, this has been a really great day with a lot of really exciting discussion, and obviously we’re all here because we care and are passionate about tackling climate change. Just take us, um, a little bit of framing before I introduce our speakers and kick things off. You know, climate change was a really interesting societal problem, and one thing that sets it apart from other large scale societal problems is that we actually have solutions. We don’t need to wait around for science to help us come up with solutions. It doesn’t hurt to have more solutions and more, actually, right now the question how is, how do we implement and scale those solu solutions in a way that meets the scale of the climate crisis?
Um, and, you know, the Nature Conservancy where I am, and many of you in your organizations and folks at the state have been asking recently, what are the barriers that are keeping us from scaling up and accelerating the climate solutions that we do have now? And time and time again, funding is something that comes up. In fact, the previous two panels on natural sequestration funding came up in both of those as as an issue. So it’s a culture that’s particularly true for the national working land sector in California. We have a significant and a growing body of science that shows the potential of nature-based climate solutions to help California achieve carbon neutrality. And yet, in spite of that science and in spite of the opportunity with these solutions, they’ve largely been underutilized and underinvested in, in California and beyond. Uh, and, and frankly, most of California’s natural resource funding traditionally has come from propositions and bonds.
And, and earlier in a session today, deputy Deputy Secretary Hansen pointed to the fact that, um, you know, there’s been an unprecedented investment in nature-based solutions over the last couple of years, but that’s pretty new. That’s not something we’ve seen a lot in the past. So fundamentally, we’re gonna need to work on funding, and ultimately, it’s neither public nor private funding that can really solve the problem. We need to have diversified, equitable, and durable funding mechanisms if we’re really gonna meet the scale of the challenge at hand. And so with that in mind, I’m excited to introduce three panelists today who have expertise crossing the public and the private sectors. We’ll just start and go from your left to right. Um, Marie Liu, who serve as a policy advisor to the speaker of the Assembly on environmental issues, she has deep expertise on environmental topics from work across the legislature, including previous experience working for the Senate Committee on Natural Resources and Water, the Senate Appropriations Committee and two senators.
She holds a master’s degree in Hydrological sciences from UC, Davis, a bachelor’s degree in engineering studies from UC, Santa Cruz, and a bachelor’s degree in Civil and Environmental Engineering from UC, Berkeley. On her left is Anthony Myint, who is the executive director of Zero Food Print, a nonprofit that leads collaborations with state and regional governments in California and Colorado to scale innovative agricultural climate solutions. Zero Food Prints generated more than a million dollars in funds for 53 regenerative ag projects in California since the year 2020, and serves as a direct service provider for many jurisdictions. Interestingly, Anthony is also an award-winning chef and Restaur, I would like to learn more about myself. And then on his left, we have Zach Knight, the co-founder and chief scientist of Blue Forest Conservation. He focuses on understanding the environmental and economic benefits of ecosystem restoratin to motivate innovative long-term, um, investments in natural infrastructure.
He collaborates across both the research community and with technologists to develop, test and apply tools to evaluate the benefits of ecosystem restoration projects across the natural working land sector. And he engages with state and federal policy efforts around conservation finance. Go ahead and give a little presentation. And just before we jump to that, one thing to note on timing, uh, at the end of this session, please stick around because the reception will begin at five in the main room. But first, let’s jump into the fun, the meat of things. So Marie, please go ahead and take it away.
Marie Liu (03:05):
Great. Thanks very much for having me today. Uh, I’m gonna use my opening comments, time to learn to use this.
Just one second
Coming out. Okay. Just keep pressing.
Okay, go ahead and start. Okay. So, um, uh, uh, I I’m really glad to, I’m really happy to be on a panel where we’re actually talking about public, private, public and private funding, um, potentially for, uh, natural working lands. I think one of the cha from my perspective, from uh, legislative perspective, this is definitely funding has been a huge hurdle. Um, traditionally that legislature, that that mu not much of the state budget has gone to resource priorities generally. Uh, it used to be a mere 1% of our giant general fund. And this has been, you know, there, there’s been a lot of, there’ve been, um, huge push including from, um, folks like yourself to really change that, especially as we appreciate the, the value that natural working lands have, not just on biodiversity, but also, excuse me,
Kind of the traditional these lands have for resiliencies, but also as a climate solution. So unfortunately money doesn’t grow on trees in the public sector though. And so what I’m just gonna kind of run through is to give you a flavor of kind of what we grapple with, um, when thinking about three main different funding sources that we think about, um, for availability to working lands, and that’s the general, the state’s journal fund bond funding, and then the cap and trade auction revenues, also known as, uh, G G R F or, uh, some of you might also known it as, uh, ccc, I ccis a claimant, uh, what is ARB called? UN yes, <laugh>. Thank you. Um, it has too many names at this point. Um, so the, the, the golden jewel always feels like, uh, general fund, general fund has, it’s this, we can spend it any way we want to spend it, and there’s great ability.
It sounds like you’ve all, you’ve all already talked about kind of in the past it’s been really hard that we’ve bond dollars and, um, and that helps for capital improve, uh, capital investments, but not for ongoing operations and maintenance. Well, general fund, we can pay for all of those things. The downside is exactly what we’re seeing right now is that for, you know, the, for the first time last year, we multiyear retain climate. Let’s, if we actually follow through <laugh> with the multiple years, um, maybe it’s not totally surprising that we’re, you know, when you, good times always come to an end, you know, fiscally. And so, so the big con is really what we’re seeing right now and it’s a deficit. And, um, if it’s not, if those earlier multi-year investments are not prioritized from cuts, then you, um, then you’re, you’re really subject to a lot of unpredictability and the funding available.
Um, there’s also, as you could, you know, because it’s the state’s main fund, there’s lots of demands on it. It’s really hard for a member. And I remember this from like the recession in the, in the aughts when, um, I was working on some state parks issues and we were trying to push against closures. And I had a member tell me, Marie, I need you to stop talking to me about this because today I’m voting to cut AIDS medications to people who have, who are, who have aids, and I can’t, can’t do that right now. And I was like, I, I was like, you know what, I totally appreciate that, but that’s what the members have to deal with is that these are great silos of money and there’s many demands. And so how do we talk about, how do we talk about, uh, things to elevate it to a higher priority?
But when push comes to shove, there are some, you know, we’re, we’re always a little bit putting out hires in lots of different areas. And how does it, uh, match bond funding? You guys have talked about this. Right now, we actually don’t really have, we’ve kind of run out of most of our bond funding that we’ve had in our previous, previous bonds. Uh, the, um, the biggest upside of bonds is that once we ask it, we know it’s there. We know what the purposes are. We, and we usually spend it over, uh, a couple of years. So it’s a really nice, predictable piece of funding. Downside is, as you all know, it only pays for capital cost. It doesn’t this plant planning that up. It, um, we’re at the point where we do like if there’s going to be additional capacity of land, um, and there is, um, that’s all easy and said, you know, uh, but when there’s competing bond interests as well, that’s tough.
Um, I’m gonna go through GF super quickly cuz I have one more minute. Uh, g f it kind of mimics general fund and that there’s actually a fair amount of flexibility in it. The main thing is that we have to show that it technically under statute you have to show G GHD reductions, which has been difficult to some extent in natural working lands to get people to feel that there’s enough confidence in, um, the, uh, in permanence in the ghs, uh, reduce, um, G G rf, they’re cap and trade auctions, uh, cap and revenues from the cap and trade system, depending on how that, uh, depending how the auctions go are going, that determines how much funding there is available. We’ve been lucky within the past couple of years that you usually outperformed our productions, but there’s no guarantee that that’s gonna continue, especially as we get closer to 2030, which is the end of the conversation.
Um, there. And the last thing is just like general fund, there’s a tremendous demand on G R F. It’s like this mini, it’s a mini food fight for, uh, um, for these dollars. Um, especially because they are flexible. So those are kind of, uh, hopefully that gives some context for kind of what the legislature grapples with, with trying to figure out funding sources, um, for, um, to bring pub public funding to, uh, natural working lands and kind of to give a sense of these are the challenges that we have to get through in order to attract more funding. Um, and I’m hoping that, uh, in this panel we’ll also reveal how we can leverage kind of our stakeholders better to capitalize on private investments.
Anthony Myint (08:24):
Oh, amazing. Um, let’s see if this works. So about career and different things we can say for the q and a, um, Zero Foodprint as a non-profit scaling regenerative agriculture. Um, so I was really pleased to hear Sydnee talk about implementation because I view us as implementers. We’re very much focused, uh, on getting money to the next practice and the next acre. And I think that we’ve been effective at doing that through public private collaboration. Um, so we work with, you know, cfa, the C R C D, uh, individual RCDs Biblical Conservation Networks on overseeing and validating practices. Um, so I think from emergency presentation we saw a bunch of different types of funding mechanisms. And I think maybe the headline that might have been missing was not enough total funds <laugh>. Um, and so I just wanted to start big picture. Um, this is a graphic from Project Rado.
So this rainbow is showing the different solutions. So each stripe is a proportion of the solution. So the first thing to note is the food system is a big opportunity in climate. And then so our land sinks and natural climate solutions, so together they’re may be the biggest one. Uh, another finding from Project Drawdown is that society can lower global temperatures. So not just net zero lowering temperatures, supposedly with 29 trillion. So that’s a lot of money. That’s also 1% of GDP between now and 2015. So some research suggests maybe 2%, 3%, whether it’s 1% or 2%, you would probably start with 1% anyway. So let’s just go with that for a minute. Uh, there’s also a little note about regenerative agriculture. Um, so Project Dry down kind of does this plausibility analysis and cost benefit analysis, and they basically find that globally implementing practices on <inaudible> creates the benefit for each dollar invested.
So that includes the global south. So maybe in the US it’s closer to $10 or something, you know, who knows? Uh, but basically just a huge win-win win that could be unlocked if society started to use 1% of GDP instead of 0%. So let’s stick with that for a minute. I think our work on trying to scale regenerative bag is, uh, I will go into the culinary career for a minute. From starting in 2015, we opened a restaurant champion in Regener. So we were serving perennial grains, uh, sourdough made from this perennial grain kern that we were serving beef from, biogeochemistry pilots from the Marine Carbon Project and trying to tell the story. And what we found is consumers loved it. They were excited, oh my God, where can I buy this? Unfortunately, there’s no supply. So we started to feel despondent that we weren’t making an impact.
You know, we had gone all in with our life savings on this thing. I didn’t even know if we were changing one single acre just by spreading awareness. So in 2019, we closed the restaurant, began collaborations with C ARB and c d FFA and others, uh, Cali, pa. And so the proposal was to go the other way, the converse way, not not focusing on nice ingredients. I’m kind of hoping things changed someday, but instead of focusing on getting resources directly to the change as quickly as possible. So my main interest now is trying to adapt some of the successes in industries like renewable energy and recycling to the necessary paradigm shit and natural climate solutions. Uh, one example is, so for Scott, 2010 hours of policy work, second one in 2014 in Sonoma, there’s now four CCAs in California, the state is at 36% renewable energy.
CCAs have played a role in that contrast that with 1% of acres that are organic after 50 years. So you start to see where if you’re focusing on the nice ingredient, a few rich people buying it, it’ll never be enough given the scale of the need and the opportunity. If you focus on somehow any way just getting money to solution even one single percent is enough. Uh, this is a, uh, we don’t need to stick on this very long, but this is Sonoma’s climate action plan with, um, you can see a strategy for a sequester local program, implementation partner, zero food print to ecology. Um, and so the concept is sort getting 1% from restaurants, a dollar per month on the trash bill. You know, any money from any sector to start finance and natural climate solutions. Um, you can see here in Sonoma, they have a scope and plan from the Carbon Cycle Institute to do 250,000 acres of carbon farming.
That would probably cost, I don’t know, Michael, what do you think, 250 million. So they don’t have that in the budget, but they could get 45 million a year from mechanisms, like 1% at restaurants, wineries, a couple bucks on the trash bill. Um, going back to something Michael said, the Healthy Soils program had windfall recently 66 million. Michael referred to that as a windfall, but also kind of like the minimum that we need to do to hit targets, 1% from restaurants would get 900. So 15 five would get 7 million a year. So we can totally do it if we just start working on collective action. Uh, sorry, I’ll skip this in the interest of time, but I just wanna have this receipt up here for a minute so you can’t see it very well. But this is a receipt from Subway sandwiches in Boulder, Colorado at five locations for the last year.
There’s a line there that says, restore Colorado 1% 11 cents. So Zero Foodprint work with Boulder County to create this program and collect that 11 cents. And then we get 95% of it out to farms and ranches, uh, to implement the next practice on the next acre. So I’ve been making analogies or no energy, but I also cited recyclables or recycling. And so the analogy here would be to the bottle bill, the 5 cents from a can of beer or something at the supermarket. To my knowledge, nobody has not bought the bottle of wine or the can of beer because the 5 cents the economy would be okay if we had these measures and we can create them at the city and county level and we can do it through, uh, optout mechanisms that do not require a vote. So there’s a whole couple more minutes about how we get the money out optimally, equitable and systematically. Uh, but we’re running outta time for the reception, so I’ll leave it for the q and a.
Phil Saksa (13:31):
Thanks Andrew. And, and thanks Marie. Uh, so my name is not Zack Knight, uh, CEO of <laugh> of Blue Forest that he wasn’t able to attend. So, uh, I’m again, Phil Saksa, a chief scientist with with Blue Forest. And we, we are an organization based here in Sacramento. Um, we haven’t heard of us. We are a non-profit conservation finance firm. Uh, we have finance experts, scientists, engineers, business folks on our staff that really work to bring the field of conservation finance to Napa Climate Solutions. Um, when we think about how we’ve invested in, sure, from the roads we’ve built in the dams and the levees, we’ve financed all of that to be able to provide something of value to society, um, in a way that when you build something like that and it’s gonna provide value for a long time, it makes sense to finance that.
The same way on a personal finance issue, you mortgage your house because it’s gonna be there for at least 30 years. You finance your carving it because you know it’s gonna provide you transportation for five to 10 years. And, and using that same mindset and applying that to the natural infrastructure like we’re to do. So acknowledging the benefits of, of, you know, either, you know, generate agriculture, we largely work in forests, the carbon benefits, the water benefits, the fire risk reduction benefits, those are gonna last for a period of time after that initial expensive restoration investment. And so what we’re trying to do is align all of the, you know, traditional sources of funding the state and federal resources. And we’re lucky to live in a state that has put a lot of resources into this issue over the past, you know, few years in a way to the state level.
Um, and so, you know, leveraging that with other beneficiaries of this work. And we largely work with the forest service, but if you think about it, the, the forested headwaters provide 50 to 75% of our drinking and, and con, you know, hydropower, um, consumption from, you know, just forested headwaters. And so there’s a lot of benefit to maintaining that system in the headwaters so that we, you know, add beneficiaries of that, you know, from water utilities, from hydroelectric utilities, from private corporations, um, can continue to see that as a, as a ecosystem service that those watersheds provide. And so what we work to do on our end is we work to quantify, you know, what those benefits are, either from avoided costs of wildfire or enhanced benefits from water regulation, water quality protection, water supply enhancement. We work to understand who benefits from them. Is it a utility that manages a reservoir downstream is a pg e producing hydropower entity, and understand what’s the economic value of that over time?
And we work to, you know, collectively understand how can we contract based on those shared values in a way that provides the capital necessary to do the restoration work at the scale needed while at the same time bringing in private capital to finance those long-term commitments so that we can get done today and not 10 years from now or 20 years from now. And so, and so we’re excited to, to really dig into that issue. And, and when you, you hear Marie and Andrew talk about it, that the scale of the problem is such that it’s really expensive just across the west and just in forest restoration to address fire risk outside of all the other needs for forest management and restoration. It’s a 50 billion need. And you know, with the recent federal legislation that passed with the state of California investments, we’re talking maybe seven, 8 million.
So we’re not even 20% of the way there. And so bringing in the other sources of funding, financing them as a package to be able to create that steady investment in natural working lands is really where we think private capital can play a role. Um, and then, you know, one of the, the things that we’ve stood up recently, and one of the things we’re finding as you are getting these large investments in restoration is we’re creating another problem, which is biomass piles in the forest. And so acknowledging that the typical way those are taken care of because it’s not economically viable to move most of that material off the forest and to a, a higher use, higher value to simply burn them in place, which isn’t great from a, you know, carbon and emissions perspective. And you still gotta pay somebody to do that, right?
And so how can we use this system of, you know, greater investments in forest restoration, start to standardization as a can be financed in coordination with these large scale restoration projects so that when we have these large feed stocks of what’s currently non merchantable or soft merchantable material, we can move those off the forest quickly, reduce fire risk more immediately and provided better use for that material. That can be everything from I energy, which is probably the lowest next value. You’re still burning that material, but at least you’re offing fossil fuel use and still creating power. But can you create host and poll? Can you create, um, particle panel manufacturing facilities, community scale saw mills, right? Understanding how we can use that material in a better fashion for better outcomes is, is part of what we’re doing with our California Wildfire Innovation Fund. And so that’s specifically meant to invest in, you know, and be a co-investor in, you know, with some of the state programs and the federal programs that are available for this work now, as well as other investors in this space.
So we’re pretty excited that we just launched that in February. So it’s a pretty recent program and we’re actively looking for investment opportunities there. Um, I’ll probably leave it there acknowledging I’m short on time, but just wanting to say that, you know, partnerships have really made all of our work possible partnering with, with local community organizations and partnering with state agencies is the only way, you know, we’ve been successful to, to bring private capital to, to, you know, public lands. And so acknowledging that there’s a lot of great work out there, but it, but it, you know, it only happened through according, so that
Sydney Chamberlin (18:30):
Please follow our panelists for the great context setting. Um, I have one or maybe two time pending question, uh, questions for retail panelists. Uh, so in the meantime, start thinking up your own questions to, to add to the next, I’m gonna start with the question for Marie. One of the ch one of the challenges around public funding is that it’s often limited in its ability to provide capital beyond implementation. So when we think about things like reforce development or ongoing planning and maintenance funds, um, that are really needed help support the long-term duration of projects, what kind of strategies could we use to consider modifying our public funding mechanisms so that we better support metra baseline solutions, um, in the long-term durability of those solutions?
Marie Liu (19:00):
Well, my challenge has been we’ve, we’ve had this discussion about bond dollars, well, should we spend, why should we restrict our bond dollars to just capital improvements? Um, and the resistance that is always run into is that the reason why capital, uh, bonds are, um, are, uh, bonds are only spent on capital improvement is that you’re paying interest on that for a long time. It’s like, it, it’s maybe the equivalent is thinking about, um, I think actually the practice has, uh, calmed down, but, uh, people taking out very long LO loans on their cars longer than the car is actually, uh, uh, longer than the useful life of the car. So people are end up paying for their car long after they’re actually using it. And that’s kind of the basis of, you know, the, the, the fear of not, uh, of spending bond dollars on, um, on um, uh, non-capital improvement.
Can we think, you know, are there, there’s probably some areas that gray space areas to think about, uh, capital improvements a little bit differently. Um, and so there’s probably something to work there. Um, but I think maybe the bigger, more productive conversation may have to do with as, as, as everyone I think we do it, we’re really bad about our, you know, public policy is really bad about one looking far into the future and putting value on economic value on natural systems. Um, and that ultimately makes it very hard for us to judge, uh, you know, pub lawmakers when they’re judging between, you know, making voices not being able to say what the dollar value that are getting from something ultimately really hurts that ar hurts that argument. So I’m kind of skirting your issue a little bit that I do think, you know, there’s probably some work to be done to spend dollars differently. Um, but I do think there also needs to be just general realization that bonds will never be the be all end all solution for, um, for this, even if voters are willing to pay for a lot of it, it’s just not, it’s, it’s not, uh, it’s not the golden egg that we need.
Sydney Chamberlin (20:55):
Thanks for you. And actually that’s a great segue. Oh, sorry, did you
Phil Saksa (20:58):
Yeah, can I just a, a brief comment on that, that’s something I think we’re working on with our utility partners at corporates as well is how do you not just jump in with something that’s ready to implement technology that you need planning, permitting, you know, there’s even some, you know, work that usually needs to be done between permitting and implementation design engineering. So how do you fill those gaps in addition to jumping in at the end and, and you know, working on implementation and then having a party because there’s a lot that needs to happen before you know that that work can get done. So, so we’re, we’re having that conversation in other sectors as well.
Sydney Chamberlin (21:24):
Excellent. Well, and I think this also raises like public opportunities. With that in mind, Anthony, I I have a question for you. You spoke about the potential of generating funding for natural carbon sequestration on local scales, um, from private sources and the food economy is such a great seed for discussion, terrible pun intended, kind of, um, how can we better connect the dots between private investment opportunities and natural carbon sequestration is, you know, is the challenge really around education and awareness lead solutions or find missionize it something else altogether?
Anthony Myint (21:48):
I think so I would say that in my opinion, it’s about changing the conversation so that it’s not even about setting a target and then figuring out how to get it to the target. So it’s not even about comparing the, you know, electrification to the natural head solutions. You just need a commitment of money to the natural climate solutions and then you can start to figure out which ones are the best among them. Uh, when we started our program, Mary Nichols from CARB kind of was very clear that soil carbon sequestration and measurement and all these things were carpool to do as quickly as possible directional. Um, and so to me it’s not so much question about, you know, food economy, the construction economy, whatever. I mean, any economy can be part of the solution once they want to be, but it’s gonna be hard to link it to some sort of like identity preserved project or exact amount relative to like a pound meter. Uh, and instead it adjustments to be we’re gonna use this much money a year towards these projects.
Sydney Chamberlin (22:41):
And Philip, turning to you, um, you know, as we think about the barriers to implementing and gain support for nature-based solutions, one of the challenges is that it can often be really difficult to quantify them in any ecosystem services that are associated with these solutions. What kind of strategies can you turn to to help sort of standardize or think about the way that we characterize and quantify ecosystem services so that we’re better supporting communities and decision makers in how they choose for and advocate for strategies?
Phil Saksa (23:03):
Yeah, and I think you heard this in in the last panel here too. Data is a really big question here and, and so people went to this one is, you know, to Andrew’s point where can we simply use something like direction in order of magnitude to really understand where investments can and should be made and where you might be really uncertain, but you know, your order of magnitude is really high, that might be something still worth investing in, whereas maybe you have an incremental progress and you might really want to measure that to make sure you’re getting what you’re investing in. Um, so, so that’s the first, the first question. We work with a, a group called the Center for Ecosystem Climate Solutions based out of the university of, uh, map California to Landsat, um, at a 30 30 meter resolution. We think of that as a, as a great starting point, um, for monitoring tracking over time.
They can, they, you know, using Landsat back to 1986, they that you, you have that kind of change over time picture, um, but, and that gets you a year by year kind of snapshot of what’s going on in California. What that doesn’t get you is kind of to two things, the sub annual level. So understanding, you know, how things are changing on a month by month basis, and particularly in the water sector where we work, you know, when our flows coming into reservoirs, how long is snow staying on the ground speed till July this year? But but not every year. And so, and, and how the, the systems are changing are affecting those snow packs and those, those water, um, regulation components is, is a different conversation, particularly when we’re talking with utilities and they want to know, you know, how does this particularly affect my day-today operations, right?
Uh, and so, and so getting more specific around modeling and elements of that. I think the last component of this is when think about cost of monitoring and measurement, you know, from my personal, you know, perspective, we try to keep cost down to less than 10% of a project because we don’t want to be spending as much money monitoring the outcomes as we do doing the good work itself. So, so making sure that that we’re, you know, really cost effective with it, um, is, is important. And I think the more this that state agencies can identify and, and recognize ways of valuing ecosystem services, the less it’s, you know, on us or on academic or kind of a, a, a group by group method, which, you know, I would say in the early days of carbon accounting, like that’s how it happened and it’s evolved since, and not perfect yet, but having some, some more, you know, um, boundaries, parameters around how you recognize these outcomes would, would be helpful. Just having that third party perspective, um, in our work.
Sydney Chamberlin (25:08):
Speaking of third party perspective, Marie, question for you. Um, as we come back and think about the public sector, inequity is another problem that often comes up in the context of public funding. Um, not only in how public funds are distributed and lack of access to technical assistance for grant programs, but also due to lack of consultation and input and decision making from underrepresented groups like tribes and frontline communities. What kind of actions is the state taking to address these issues? Are there particular funding structures? One that came up in an earlier panel was block grants. Um, it could help to mitigate some of these challenges.
Marie Liu (25:32):
Yeah, I appreciate that. It’s a flexible itself. It’s all the planning that happens beforehand. It’s the design even, it’s the permitting and then, you know, at the end it’s the operations. Um, uh, and it is, um, it would, it would say it’s in the legislature. It’s really hard. I think we have largely ignored all the other costs. Um, in the past and in the past couple of years, I feel like we have tried to pay attention to this a little bit more. The, the, the, the money from the sky that fell for the past two years, ha did allow us to make some investments in places where we were trying to, um, capacity build where we were giving grants. Um, and I, I think actually an example that, um, I think we, uh, have been doing for maybe seven years now. It’s like in the TCC program, the Transformational Climate Communities program, where most of the money went for actually implementing the projects, but every year a fraction of that was saved for communities that wanted to do this, you know, this kind of suite of projects, but needed, needed some funding and ability to do that.
We’ve also done that in, um, AB six 17 programs, which are community looking at reducing, um, hotspots of air pollution where we gave, there was money there specifically for capacity building to evening from actually, um, not planning work, but only helping people participate in meetings like money for daycare and food, you know, for a nighttime meeting, that type of thing. And I, I think those are, those are easier for, those are harder to get money for when we’re talking about, um, in difficult economic times. But I think we’ve, over the past couple of years, we now have a couple of models where people realize like, oh, we do need to do that upfront work, um, in order to get better projects out there. Um, I think there’s <inaudible> the benefit of it if we could, you know, kind of provide some more security on the out here funding.
I think there’s been a lot of hope in being able to do that and dangle that money out. There also encourages, uh, folks to get funding to do the upfront work. Um, and there’s little things that we can do, like help with advanced, uh, advanced payments. And so you’re not necessarily always waiting for reimbursements, but admittedly we only, you know, makes the state notice to do these. And so we’ve really done it understand. And so like looking at those bills kind of smaller things and bigger, you know, bigger pieces to just straight up fund capacity and like small pieces to like avoid, um, avoid the financing charges of, you know, waiting for reimbursement from the state. Um, I think those are all things that can help, um, smaller, less resourced communities and organizations get some of this funding.
Sydney Chamberlin (27:59):
It’s great to see that there are so many models that we can learn from and thinking about, you know, learning from models. I know Anthony, you spoke about, you know, learning lessons from the renewable sector and from other sectors and informing your work. And just to kind of flip that on its head a little bit, we all know, I think in this room that natural carbon sequestration is pretty broad, right? We have forests, we have wetlands, urban lands, all these many different landscapes, and they’re all a little bit different. What can other sectors, you know, outside of agriculture and food, learn from the work you’re doing? Are there challenges around things like implementing these local ordinances that you know, you can share lessons learned from with other sectors?
Anthony Myint (28:28):
Geez, I wish we had lessons to share. We have not successfully implement precedent. Um, I think to your point about other sectors, the biggest glaring opportunity right now is in the compost sector and waste management. Um, the passage of SB 1383 over Rachel Wagner talking about it earlier, that might be the most significant natural climate solutions policy happening in California. But it falls short because ju like the Compass created does not have financing and resources to go the last mile onto farm and ranch. It might cost $25 for somebody to purchase a ton of Compass and then $50 for the Freedom Logistics to get it 30 miles away the farm or whatever. And so I think that whole industry needs public, private and cross sector collaboration to cost share to optimize the funding outcomes, but there’s no present cuz it’s all unfolding in real time.
Sydney Chamberlin (29:10):
<laugh>. That’s an exciting problem to have though. Yes. <laugh>. Um, Phil, a question for you, you know, you spoke earlier about partnership with US Forest Service and I think emphasize the need to have diverse stakeholders at the table. What, you know, if we think about, um, what’s happening with funding opportunities at the federal level, the state level, regional levels, um, you know, what kind of opportunities are there to build synergy and what kind of stakeholders do we need to bring to the table so that we can really have this kind of public, private cross sector synergy?
Phil Saksa (29:37):
Yeah, I, I think, um, couple ways I’ll answer this question. One, acknowledging how to, reaching back to, to the planning dollars question too is there’s confidence that the work will be implemented to Marie’s point more planned resource. There’s more confidence and more planning resources, um, are willing to, to go to those areas. And so acknowledging that where we can be successful in implementing, you know, landscape restoration, that, that, you know, we can attract more sources of funding to those projects. Um, and, and that does create a money follows money problem where you do have areas that, that need more technical assistance and more assistance in, in obtaining that initial funding. But, but recognizing that, um, that being effective does, does attract more resources. Secondly is when we started our project on the time of National Forest in the North Yuba River, um, we started on a small restoration project.
It was 10, 15,000 acres in the headwaters. Um, and we partnered with, uh, the Forest service there, the, the Yuba Water Agency, which manages a a million acre foot reservoir at the bottom of the, the North Yuba and the National Forest Foundation, which was implementing the project. And so that was, that was for worked together to understand how we could pilot the conservation finance and forest resilience bond we wanted to do there as that project was successful. What that, the follow on from that was a conversation with a much broader group about how do we restore land and implement restoration across the rest of this 275,000 acre footprint. And so that first project actually catalyzed the North People Forest Partnership, which is nine organizations, um, that are at the table now to do elements of that work, partially because the, the group there doesn’t do a lot of the work.
They don’t do the community <inaudible> does any I permitting that both Circle and the Nature Conservancy does. So they’re both at the table, counties are at the table, um, the states at the table through the Sierra Nevada Conservancy. And so you’ve got everybody now focused on how you can really address, you know, what is one of the largest last unburned landscapes in the northern Sierra, um, of that scale. You had the 300,000 acre north complex fire just to the north. Um, certainly had the Dixie fire about 10 miles to the south. Um, the American fire was one of the originals in 2013. So, so really we’re, we’re starting to address some of these last large unburned landscapes and, and we’re largely being successful at it now in a way that we wouldn’t have imagined that that possibly even, you know, five years ago. So, um, so, so, and, and including, you know, native Nations in that as well. The neon are at the table, um, there, but there’s a lot of work to get done, uh, to be done around non-ed recognized tribes and having resources there, the ability involved in that and that we want them to be.
Sydney Chamberlin (31:55):
Thanks Phil. I’d like to open the, the floor for questions. Yes.
Questions for Phil. Um, local or other ways produce having to confirm how whatever you, what does, has anything succeeded?
Phil Saksa (32:14):
Well, we just started a couple of months ago, so, so just the idea for the funds. So we made investments yet, um, that, that shortly to come. I think some of the examples I put to are like, um, the, the small sawmill in Greenville that, that, um, was particular by the CR Institute after the Dixie Fire. Um, so you’re starting to see, um, you know, two by fours come out of that, you know, just small again, community size sawmill through, um, through that effort. And they’re hoping to, you know, stand up to, to, you know, advance wood products, you know, being, you know, being available to, you know, rebuild housing in the, you know, to think about it and figure out how to support that. But, but it’s also, you know, those small bio facilities like the Ville Community Partnership that have been working to come together for about, you know, 12 or 13 years now, they’re almost there.
Um, and, and can we provide some of that cataly capital to, you know, organizations that, you know, they have a lot of grant funding, state and federal. Um, they have some investor interest, but if they could use, you know, a a, an investor that is willing to take on junior debt or as an e debt or, or provide, you know, debt financing for equipment that’s needed or to, you know, buy the supply of, of logs that you need to store on site, um, to be able to continue production through the winter season. Those are all things that we think we can do to accelerate that work. Um, but, but even, you know, acknowledging that we wanna be thinking about how do we incorporate some of the carbon value in this space? So where can, um, and, and we’ve done math on this and, and we’re working on a biochar carbon credit protocol that should be launched with Climate Action Reserve later this year.
And those, those credits sell for over a hundred dollars, you know, a ton, uh, compared to the current market. And that will not in and of itself make it economically sustainable. We’ll unit it in the forest, even just producing biochar and spraying it back out on the forest, it will cut the cost of power burning by about half. So you’re still seeing a cost savings to the project, you’re still seeing that better outcome and you’re generating a significant amount of, of, you know, credits to the market. So, so those are the opportunities that we’re looking for. Um, and then I guess the last piece I’d say there is traditional investors, you know, kind of banks, um, have been nervous in the space cause they don’t understand the feed stock issue. That, and, and, and acknowledging you can’t sign a long term feed stock in most cases with the, with the Forest service working through our implementation partners like the National Forest Foundation, um, we’re working with el with, with some of the RCDs, um, and, and other tribes. You could sign a long term contract with those implementation partners in a way that you can’t always do with the federal government. And so, um, so thinking about creative ways for using our, our model to enable those investors to have more confidence in, in investing facilities that will then, you know, use those, those contracts to, to become, you know, self-sustaining That’s,
Yeah, primarily serves all things climate. Um, and our Climate Smart Act, uh, program manager has told me, you know, we have, we have the project, we have farm, farm plans, really just financing is is very more about, um, projects we’re doing also other counties or other regions, California, um, what, what should we be looking at here?
Anthony Myint (35:03):
Um, so we have a statewide grant pool. Uh, we work really closely with the RCDs on it. Um, and so basically this current round of this quarter, we have $250,000 available in $25,000 grants. Uh, we also have a compost program. We’re giving producers rebates on compost using jurisdiction procurement dollars from 1383, finance those rebates. Um, so we would love for your producers to get involved in either of those resource programs. $250,000 a quarter is a drop in the bucket in the whole region. Um, and so I would love to work with you on actually trying CEC on trying to create that program. It could literally be as simple as an opt-in for $1 on the trash bill. I’m just getting the Santa Diversity planner or whoever to just ask the waste management company to add the opt-in. Simply an option that could be the precedent that unlocks every single jurisdiction in California
Here in the back.
Yeah. I’m wondering if anything on the panel is aware of efforts in the Central Valley, um, to operate on the, on the coordinated small farm. Nobody’s really focus on the radar and away
Phil Saksa (36:11):
I can make a snap, but if, but we have a project with the freshwater trust, um, where we’re trying to pilot exactly what you’re talking about in the consumptions, thinking about the headwaters to, to, you know, the central valley connection and how you restore that entire watershed. Um, and so what we’re doing right now is we’re building a return on investment, um, portfolio. So understanding like how much does restoration cost, what are the outcomes that would come and based on the desired outcomes, you know, where where would your money best be spent, you know, in, in a prioritized way. The the second thing that we’re doing there is, is we’re looking to do, you know, not 10 million projects, but a hundred million dollars worth of projects. And so, um, can we access SRF funding, uh, and start to, to access those sources of capital, acknowledging that they’ve now said that these solutions protect water quality and, and our eligible for, you know, those, those financing and, and you know, forgivable, um, loan sources.
So, so we, we are starting to tackle that, but I would say we’re, we’re kind of in the first six months of that, so I don’t know where that’s gonna go yet, but, but we are trying to, trying to get that connection more, I mean that fires happen in the headwaters has a, a fall on effect in, in the Central Valley, and obviously the, the rains and floods that we, we saw there, the, the entire system is connected, so how can we make it more resilient as a whole, as opposed to kind of splitting it up into different ag, you know, grasslands, rangelands, uh, and, and forests.
Anthony Myint (37:20):
So, good. One quick note on that too is 1383 has a procurement requirement where jurisdictions must buy a certain amount of compost, but they don’t need to buy it from a specific place or use it. In a example, we purchase something like 450,000 tons of compost per year, but they could be purchasing it closer to the Central Valley and getting it to the Central Valley. Um, and so there might be a bunch of, again, cross-sector financing opportunities to resort. There was a question in the back,
Anthony Myint (38:08):
Example. Go ahead. Uh, there’s a group of LandCorp that is working on that more in the Midwest and more in relation to crop yields. And so it would be like the lenders and the insurers, uh, you know, getting better rates essentially, or different things in relation to conservation, regenerative back practices. Uh, I don’t know of it in California in relation to some of these conversations, but it should happen,
In my opinion.
Marie Liu (38:29):
The insurance area feels a little, feels untapped to me. And I, I mean, part of the difficulty is, um, at least in the legislature, our policy silos, I don’t speak insurance <laugh>. Um, and, and so for, um, and actually, uh, credit to insurance, um, uh, commissioner Laura I think has been trying to kind of pull the climate and the insurance conversation together. Um, but it is awkward at the very least because then the people who speak insurance sometimes don’t like, they’re like, yeah, yeah, yeah, yeah, that doesn’t, you know, some of this doesn’t translate kind of, some of the climate priorities don’t fully translate. Like I think wildfire has gotten to the point where they’re like, and, and sea level risers got to the point where they’re, they have, their eyes might have been on, but wait, we have to do this like nfl, but like for not working lands feels far off right now.
Um, and then in my space I’ll say, you know, those of us kind of in the more natural resources area, we just don’t speak insurance. And so sometimes if people will come and proposal for us on this and we’re like, we actually, we have a hard time vetting it, but this is definitely an area where I think, and I actually really appreciate hearing, um, Andrew and Phil talk about like, you know, ultimately there’s not enough public funding a big hole to make this happen. We have creatively, there’s a lot of, a lot of ideas that you guys have already put put on the table. Um, but it will involve us talking with partners that we are traditionally talking with.
Sydney Chamberlin (39:45):
Just to add in, really sorry, just to add a detail. The note that there is actually a lot of work having the insurance and nature-based solutions in California right now. So insurance, the insurance commissioner has the SB 30 climate insurance working group, which is a group that’s gonna conven now for a few years and released our report recently. Um, and folks are working to implement recommendations in that report, which really try to address, um, insurance coverage gaps and thinking about the connections between nature-based solutions and risk and the nature. Conservancy’s been working a lot in this space, mostly in this around wildfire. And thinking a little bit about sea level rise, one of the issues is that if you wanna connect the dots between insurance and nature-based solutions, you have to be able to quantify the risk reduction benefits that you get. And then we just released a policy brief about two and a half weeks ago, um, with researchers at uc, Santa Cruz, or we tried to quantify the flood risk reduction benefits you get for doing salt marsh restoration in San Mateo County. So that’s like one body of work and there’s other with respect to wildfire. So just wanted to flag that. And yes, please go ahead.
I guess also as a management organization in San Mateo County, I’m concern with industry and, you know, mitigating risk and, you know, attracting interest on the insurance companies is that it also incentivizes furthering approachment into the national working lands for construction. We’re very concerned about the re process, a bill last 1445, you know, it’s not perfect, you know, electricity proxy for working lands, central habitats. So anything that further lowers that risk increases the risk for wildlife and other patent.
Phil Saksa (41:03):
Yeah, and, and you know, to, to follow onto that, um, we do have insurance partners that we work with Triple Insurance of California as one of our investors about their forest resilience bond and, and we’re the, um, founding investor in our California wildfire innovation fund. So they’re interested, but that’s kind of the asset side of the house. Um, the, the kind of insurance and, and, and risk management lending in which you two was, there’s no way to incorporate reduction in risk through land management. Um, in most models that insurers use. The, the parametric insurance model that that TNC proposed with blow towers Watson, um, is, is one way that we could potentially address that. But, but acknowledging that, you know, when I talk to insurers most of the time and I say, okay, if we, if we reduce fuels on this land and reduce fire risk to this community, is that something that, you know, you can support and, and you know, kind of divert part of your portfolio?
And, and most of the time they say, we don’t even have a way to, to put into our models whether they’re consulted or not. The other times with insurance is you, you have, you know, in a community, maybe 20 different insurers. So, so figuring out like we’re together among different insurers is it can be a challenge. Um, but, but acknowledging that there, there likely is a role for, for tourists to play. We have seen reinsurers, um, have some innovative, you know, opportunities in this space. Um, Swiss Re comes to mind and, and you know, they work with, um, cattle ranchers and, and Northern Africa to, you know, provide them, you know, money to their phones to be able to buy water, to water their cattle during periods of drought because it’s less expensive than them paying out the insurance product on, you know, if, if they have a large cattle. There’s there solution like that. I feel like that, that are opportunities in the space. But, but to Marie’s point, haven’t been tapped yet.
Sydney Chamberlin (42:26):
Well, I hate to stop this really great discussion, but I also don’t wanna be the one person that keeps you off from drinks in the reception. Um, as we depart, I just, I asked each of our panelists at the beginning, if they could give you just one quick takeaway knowing how important funding is that, that you’d like to have for this discussion?
Marie Liu (42:41):
One takeaway, um, I’ve appreciated this conversation. I, I think, you know, we have to explore kind of creative funding. We have to be more creative on exploring solutions, but I very much appreciate that we have to proceed cautiously on, you know, avoiding unintended consequences.
Anthony Myint (42:55):
Uh, my takeaway is we can do it and it’s gonna take collective action and teeing up and collaboration the insurance question brings to mind to me, one simple thought, which is we know we’re ranked <laugh>, um, you know, with like the big short and housing bubble and these things, they’re, the wait is more resilient. It is lower risk is better. Someone needs to monetize it and get creative.
Phil Saksa (43:18):
Yeah. And, and, and I’ll, I think pick up as well on, on Marie’s point that getting, getting creative, um, and, and figuring out what are all the outcomes, you know, and, and I think of the forest restoration space. Traditionally we thought about that as like, you know, what products would provide the funding needed to do restoration work. That’s not really the case now. And so what are all the outcomes? How do we value those outcomes? And, and we’re even working with the California Council and Science Technology here, touching on the public health impacts of like wildfire smoke and what are the costs to the healthcare injury, both public and private. Those are the kinds of things that we need to figure out as a society to really be able to invest from a lot of sectors into this space and, and really create more, you know, holistic outcome and, and, you know, for, for, for everyone.
Sydney Chamberlin (43:54):
Well, thank you. I’ll please join me in giving our panelists a round of applause. And we’re three minutes early for the reception <laugh>.
Marie Liu (44:04):