One mechanism by which the 2015 Paris Climate Agreement incentivizes greenhouse gas reductions is via carbon offsets, payments that compensate nations, states and private landowners who agree to keep forests intact in order to preserve carbon storage capacity and biodiversity.

But problems exist with forest carbon offset initiatives: corrupt landowners, lack of carbon accounting transparency, and low carbon pricing have caused wariness among investors, and failed to spur forest preservation.

Now, in a landmark move, Microsoft has pledged to go “carbon negative” by 2030, and erase all the company’s greenhouse gas emissions back to its founding in 1975 by 2050. A big part of achieving that goal will come via the carbon storage provided by verified global forest conservation and reforestation projects around the globe.

To achieve its goal, Microsoft has teamed with Pachama, a Silicon Valley startup, that seeks to accurately track forest carbon stocks in projects in the Brazilian and Peruvian Amazon, the U.S. and elsewhere using groundbreaking advanced remote-sensing technology including LiDAR, artificial intelligence and satellite imaging.

Microsoft made global headlines in January when it announced that it will become “carbon negative” by 2030, erasing all the company’s greenhouse gas emissions since its founding in 1975 — a move, the tech firm deemed “a bold bet and moonshot” for climate mitigation that in part requires the conservation and restoration of vast swaths of carbon-storing forests.

Behind those headlines is a little-known Silicon Valley startup that will be tracking forest carbon stocks in projects around the globe on behalf of Microsoft, using a pioneering array of advanced remote-sensing technology including LiDAR, artificial intelligence and satellite imaging.

Pachama, with $4.1 million in early investor backing, will closely monitor verified carbon offset projects to ensure Microsoft’s investment in the global carbon market is actually achieving forest preservation and emission reductions critical to slowing the rate of climate change.

“Our goal is to put this technology to the service of making faster, cheaper, and the more reliable issuance of carbon credits involving forests,” said Argentina native Diego Saez-Gil, 37, a serial entrepreneur, environmentalist and Pachama’s founding CEO. “Companies such as Microsoft and many others have been buying other carbon credits. But they stay away from forests because of questions around [project] permanence,” whether actual forest is being preserved, “and lack of trust regarding projects over time.”

Saez-Gil, in an exclusive interview with Mongabay, said Microsoft will soon announce its partnership with Pachama. In the meantime, he said the startup is lining up certified forest projects in North and South America that will go toward Microsoft’s initial goal of absorbing part of the 16 million metric tons of carbon it says it will emit in 2020 across its 12-country footprint.

“There are a lot of things we’re going to do together with Microsoft,” Saez-Gil said, including monitoring 60,000 hectares (148,263 acres) of intact rainforest in the Brazilian Amazon state of Pará, and an additional 20,000 hectares (49,421 acres) in approved U.S. forest projects across Vermont, Massachusetts, New Jersey, Tennessee and California.

“Right now, the bigger ambition with Microsoft is that we can bring them more [forest] projects,” Saez-Gil added. “They have a big volume of carbon offsets that they want to purchase, but there aren’t that many projects, right? So hopefully, we can monitor and onboard new projects. We are a small company, but we have big ambitions to help this large corporation meet its goals and see that the money goes to the right conservation projects.”

Paris and carbon offsets

A primary mechanism for achieving carbon reduction pledges under the 2015 Paris Climate Agreement is the use of carbon offsets to compensate nations, states and private landowners who agree to keep forests intact in order to preserve their biodiversity and carbon storage capacity. But problems with corrupt landowners, lack of transparency in carbon accounting and meager carbon pricing have kept carbon offsetting — and its broad potential to incentivize forest preservation — from taking off with would-be investors.

But the Paris accord recognizes that energy and transportation sector emission reductions will be insufficient for holding global temperature rise to 1.5 degrees Celsius (3.6 degrees Fahrenheit) above a 1900 baseline; the earth has already warmed 1o C (1.8o F). So, to meet Paris commitments, climate action will also require “negative emissions” from landscape-based solutions including carbon sequestration via forest preservation and restoration, to agroforestry, a highly climate- and biodiversity-positive form of agriculture that is estimated to currently sequester 45 gigatons of carbon from the atmosphere, a figure which grows by .75 a year while feeding communities.

Pachama works closely with four organizations that certify legitimate forest-based carbon offset projects: the American Carbon Registry, Climate Action Reserve, Verified Carbon Standard, and Gold Standard. A key Pachama goal: enable smaller, private landowners to participate in carbon offsetting to preserve their forests rather than selling off their trees as timber and wood pellets, or allowing forestlands to be used for farming or mineral extraction.

Saez-Gil asserts that Pachama’s comprehensive monitoring will be both monthly and rigorous, a standard critical to Microsoft, as the high tech firm has pledged regular reporting and transparency in its carbon offset investments.

Pachama will use high tech innovations to meticulously ground-truth forest carbon and monitor verification goals. Drone-mounted LiDAR technology will scan forests in 3-D, from the canopy to the ground, to precisely estimate carbon density per tree. NASA satellite imagery will reveal any major deforestation and other drastic landscape changes. Artificial intelligence and machine learning will be used to analyze satellite images to further estimate carbon storage.

If fire, logging or other deforestation reduces the carbon capacity of a particular project, Pachama will report the change immediately to protect Microsoft’s investment and to make sure emission shifts are accurately counted.

The company will also work actively to connect verified carbon sequestration projects with corporate carbon investors, and help assure a good carbon price.

Microsoft, for example, will pay forest protection projects at the rate of $15 per ton of carbon stored — better than the current global average of about $10 a ton, but a price that will need to rise for greater participation, observers say. Pachama will collect payments from Microsoft and other investors, pay the forest project holder and retain a commission.

Independent experts cautiously optimistic

Experts in carbon accounting and remote sensing voiced cautious optimism about this new private-sector model in which one company makes carbon reduction commitments, then contracts with a second company to assure accurate carbon reporting. Ideally, this results in the slowing of devastating deforestation, especially in critically important tropical and boreal forests.

Bill Moomaw, professor emeritus at Tufts University and a global expert in carbon accounting and sustainable development, is especially impressed with Pachama’s use of LiDAR: “It is the eye in the sky that can actually determine not just the actual canopy cover, but also the density of the wood beneath the canopy. This can all be translated into tons of carbon.”

While applauding Microsoft’s plan, Moomaw worries that $15 per ton for carbon may not be sufficient as an incentive, except perhaps in poorer regions, like rural Brazil. He also stressed that project selection is key, conserving forests truly threatened with commercial deforestation.

“I don’t want to get carried away with [applauding] what this company [Pachama] is trying to do,” Moomaw said. “But the news on climate is so bad every day, and this sounds like a really astounding thing.”

Sassan Saatchi, a senior scientist with NASA’s Jet Propulsion Laboratory in Pasadena, California, is an expert on satellite imaging of global tree cover and carbon stocks. He warned that transparency and verification in reporting will be crucial for Pachama.

If it achieves that, Saatchi concluded, the benefits could be worthwhile: “The private sector… can be fast in making observations more accessible to other companies that want to reduce their carbon footprints and mitigate climate impacts. This is Pachama’s role to play and they can play it well.”

Banner image caption: A small section of New England forest analyzed using photogrammetry, the science of making reliable measurements via the use of photographs and especially aerial photographs. Image courtesy of Pachama.

Justin Catanoso, a regular contributor to Mongabay, is a professor of journalism at Wake Forest University. Follow him on Twitter @jcatanoso

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