Solving Environmental Problems With Money: Let’s Turn Indigenous Peoples into Data Providers
As an entrepreneur, I used to tell my team that problems that can be solved with money are good problems to have.
It may sound like a question of privilege to say this, but in business money is fungible. If you need more money, you can get more by using ingenuity and creativity to sell more products or services. If a problem can be solved with money, you spend the money and the problem is solved; you don’t have to think about it anymore.
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If a problem requires time, however, the problem is now requiring a non-fungible resource. A problem that requires time shifts people from proactive work, which is enjoyable, to reactive work, which is not. Time-based solutions take us away from other problems or opportunities and force our attention on something else. It’s always better to have a money-based problem than a time-based problem.
Having spent about 10 years living in Ecuador, one of the world’s most biodiverse countries, I’ve come to the conclusion that a lot of environmental problems and threats can be solved with money.
When we think about destruction in the Amazon, we like to imagine large, multinationals riding futuristic war machines into pristine areas.
The truth is that the actual work of destroying the forest is usually undertaken by very poor people with no other economic alternative using basic tools and often putting their health and wellbeing at risk.
In Ecuador, the minimum wage is $400 USD/month. In the Ecuadorian Amazon, you can easily pay someone $200 USD a month to cut trees or do the dirty work of illegal mining.
You can also convince people to depart with their land for well below the value of the land’s productive capacity.
Wherever you have poverty you have information asymmetry, meaning one side of the sale has more information than the other, and many buyers of labor and land will take advantage of information asymmetry to buy low and sell high. The best and potentially the only way to fight the forces that are destroying the Amazon is by ensuring that protecting the Amazon is more lucrative than destroying it.
The notion that we can pay people to not destroy the Amazon may have seemed far-fetched for most of recent history, but things are changing.
First, voluntary carbon markets, alongside regulated national Cap and Trade agreements, alongside international agreements like the Paris Accord are creating a market for carbon sequestration, a market that could hit $200 billion USD in value by 2050. With a total addressable market that size, venture funds are now pouring billions of dollars into early-stage technologies that can pull carbon from the air. Technologists and financiers understand the opportunity represented by carbon markets and are jumping at the challenge of making them work.
With this new pool of money comes new economic opportunities: the trees on a plot of land whose current value is based on cutting them down now have a value in continuing to exist unperturbed. In other words, we now have an economic model beyond charity to fight against the forces of destructive and extractive economic activities.
While that sounds promising, a number of challenges exist.
First, we need to find sustainable models that allow people to make money from verifiably sequestering carbon through natural means.
Second, in the Amazon, much of the Jungle is considered to be collectively owned by indigenous peoples who have for years been undertaking the tasks of protecting the forest for free (though some also participate in its destruction).
If financiers become the new land brokers and the economic opportunity from carbon sequestration accrues to them, we’ll fail to solve the problem. If we leave the poor inhabitants of the Amazon out of the economic equation and they do not benefit from carbon sequestration schemes, they’ll continue to cut the forest down.
When we talk about incorporating peoples and communities into sustainable economic systems, there are a number of models we can develop.
Allow me to explain: though Carbon may seem like a commodity, responsible companies increasingly want the high-quality stuff, meaning they want to ensure that the carbon they purchase is coming from projects that are having a net benefit to the planet (say, reforesting land) rather than say, purchasing credits from a forest that was never under threat, to begin with.
What makes the difference between high-quality and low-quality carbon is often data. Some data can be gleaned from satellites, but in a place like the Amazon, satellites can only tell you what is happening above the forest canopy.
Below the canopy is where we find much of the rainforest’s biodiversity, and we know that the Amazon’s ability to sequester carbon is enhanced and dependent upon its biodiversity. Technology is making it easier to measure biodiversity.
For example, throughout the forest, we can place AI sensors that can detect the presence of wildlife and use that as a data point in determining an area’s biodiversity. You can imagine a scenario where indigenous peoples work with hardware providers to place and maintain AI sensors that gather the data that enables the landholders to fetch a higher value for their verified carbon offsets.
The most important part here, though, is that the people with the rightful claim to the land also have to own the data. Many Silicon Valley companies exist as data providers or aggregators. Their data flows into data pipelines, called APIs, and that data is used by others for all kinds of things. There is no reason why indigenous peoples can’t monetize their data in the same way that tech companies do.
Businesses, NGOs, and governments often repeat a similar pattern: they design a solution for a problem suffered by others without taking into account the feedback of the people they’re attempting to serve. As a result, they spend time and money without understanding if their solution will actually be used.
In the technology field, the lean startup methodology and UX/UI design have come about as a bottom-up response to traditional top-down approaches to systems design.
If we’re going to make solutions that take into account the complex social structures of the Amazon, we can’t do it without involving the inhabitants from the beginning. For example, a crypto-based environmental solution means very little to a community that has no internet, and having no telecoms networks is the norm rather than the exception for most Amazonian communities.
The good news is that environmental destruction can in many cases be solved with money, but the flow of money has to be sustainable. The challenge is to find models to make money flow to communities in a sustainable manner without being usurped by intermediaries in the way that say agricultural products often leave the distributors, rather than the producers, with the biggest piece of the pie.
It’s likely that whoever solves this problem of making communities benefit from carbon sequestration schemes will take a lead in the race to capture carbon sequestration market share, because they’ll be competing with nimble, decentralized providers against centralized actors, and decentralized systems almost always beat centralized systems.
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