In this episode of Climate Positive, Guy Van Syckle connects with Tripp Wall, CEO of Pantheon Regeneration, to explore how his team is turning degraded peatland ecosystems into high-impact stores of carbon with a wealth of additional benefits for biodiversity and resiliency. We dive deep into an unsung hero of carbon sequestration—peatlands—which cover just 3% of the earth's surface but store twice as much carbon as all the world's forests combined. Tripp explains the hydrological engineering and cutting-edge tech helping to restore and monitor these ancient ecosystems. We discuss the evolving Voluntary Carbon Market, the supply-demand mismatch approaching, and how nature-based solutions offer a highly scalable alternative to engineered carbon capture. Additionally, Guy and Tripp explore how high-quality removal credits with biodiversity co-benefits are attracting major corporate offtakes, and the opportunities for traditional infrastructure investors to invest in natural capital to secure differentiated returns.
In this episode of Climate Positive, Guy Van Syckle connects with Tripp Wall, CEO of Pantheon Regeneration, to explore how his team is turning degraded peatland ecosystems into high-impact stores of carbon with a wealth of additional benefits for biodiversity and resiliency. We dive deep into an unsung hero of carbon sequestration—peatlands—which cover just 3% of the earth's surface but store twice as much carbon as all the world's forests combined. Tripp explains the hydrological engineering and cutting-edge tech helping to restore and monitor these ancient ecosystems. We discuss the evolving Voluntary Carbon Market, the supply-demand mismatch approaching, and how nature-based solutions offer a highly scalable alternative to engineered carbon capture. Additionally, Guy and Tripp explore how high-quality removal credits with biodiversity co-benefits are attracting major corporate offtakes, and the opportunities for traditional infrastructure investors to invest in natural capital to secure differentiated returns.
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Gil: I'm Gil Jenkins.
Hilary: I'm Hilary Langer.
Guy: I'm Guy Van Syckle.
Kenny: I’m Kenny Gayles.
Gil: And this is Climate Positive.
Tripp: You know you look at peat and its thousands of metric tons per acre, you know they are the largest terrestrial carbon sinks on earth. So more than all the forests times two.
Guy: In this episode of Climate Positive, I connect with Tripp Wall, CEO of Pantheon Regeneration, to explore how his team is turning degraded ecosystems into high impact stores of carbon with a wealth of additional benefits for biodiversity and resiliency. Tripp explains the engineering helping to restore these ecosystems and the tech, such as audio systems to track the calls of all wildlife in a region, helping to validate their impact. We also explore how the project impacts are attracting strong corporate demand and supporting millions of dollars of investment.
Guy: Well, Tripp, thank you so much for joining us today and really excited to dig in and hear more about what y'all have been working on over the past couple months here. it's been some wonderful success that we'll be getting into over the course of the podcast. to start it off, we'd love to hear a little bit about your career to date. Obviously, you shifted through kind of the asset management realm from Alliance Bernstein, then Trailhead Capital and running a grocery store chain. So pretty diverse set of experiences. But we'd love to hear about kind of what was the aha moment that led you to realize that restoring degraded ecosystems was most urgent use of your time.
Tripp:Yeah, well, thanks, Guy, for the invitation. I always enjoy our conversation. you know, I, my career path have had a diversity of experiences to your point. And I had sort of like two universes in which I toiled in concurrently. And one of them was sort of the philanthropic world. And, you know, I have been involved in ecosystem health and thinking and flora fauna. I've run the Colorado Wildlife Foundation as president and chairman for the last going on 16 plus years. I've also been involved in Western States water for about that same time, 15 ish years. And so have a deep reverence for keeping the water couple to the land. Certainly in the West, that's a increasing issue and the climatological associations with that. So, you know, the animal side of that. The tree side of that, the soil side of that has always been a really important piece of my world, but always on a nonprofit philanthropy side. so really having come through running some companies as CEO, which I've been a SaaS company CEO, as you said, I've been a grocery CEO. was an organic grocery chain. So again, kind of back to that land and preserving and thinking about the land and an organic or regenerative fashion. My time at Alliance Bernstein managing capital and then Really realizing from that, you know, wanted to kind of collapse those worlds and sort of bring a financial acumen to that sort of conservation and ecosystem thinking, and was able to start a firm and found Trailhead Capital in Boulder, Colorado, which is basically a climate food and ag fund regenerative systems in particular. And that was really created to be able to bring. financial acumen to a burgeoning space that I think really needed catalytic capital to get some of these novel technologies and ideas off the ground supporting, you know, what I believe needs to be a transition from sort of conventional chemical based, you know, monocultures to a more sustainable polyculture regenerative set of landscapes. And not only for the water, you know, for the biodiversity, but for human health and nutrient density. And so I think we've made about 30 investments into that space in the Trailhead ecosystem to date and are raising another fund right now. And those set of what we call prepared mind projects, investing in a variety of ag tech of, you know, finance and lending ideas, things in and around the AI and processing sort of the localization of food, all of these different things really led me to a, investment in a business. Then I exited, we sold the Merck Pharmaceutical and what I realized is that my returns on that investment were great, but sort of the mission of that investment didn't really land. And so it was kind of the aha moment for Pantheon, which was, look, there is a really big need to be able to create sort of nature as an infrastructure asset class. And I think the sort of environmental inflation that is starting to hit corporate income statements and balance sheets. can be solved by putting together projects in a sort of an institutional and sophisticated way that we can really take degraded ecosystems, restore them, create a yield that has parity with other asset classes so that we can get institutional and public capital into this, then conserve them so that we're rewilding like large swaths of landscapes that are incredibly important for people and planet.
Guy:incredibly impactful and how you build it out to be a much more long-term approach by building the financial infrastructure around it, leveraging your experience today. So super impressive. And I think, you know, part of the story that's really resonated with us and Hasse and really compelling. And now, as I understand it, you also in your past, right, come from a family connected in the timber realm, connected and, you know, ag cattle. Can you talk a little bit about how that grounding kind of growing up is paired then with all your time in spreadsheets and running analysis at Alliance Bernstein.
Tripp:Yeah, I I think that led to my like deep reverence for the land and like a conservation mindset. Right. And so I think that was my on ramp to the early days of my philanthropic work. You know, I mean, walking around, had a deep, just great relationships with my grandfathers and you know, they were incredible stewards. I they were hunters, they were fishermen, they worked the land and they were incredible stewards and conservationists at the same time. And so I think they helped. give me a kind of complex and nuanced worldview of the way that, you know, everything interacts. And so it felt to me like a lot of sort of myopic and siloed thinking across these different areas and where I think there's, you know, a, an interconnectivity among sort of four pillars, which the way I think about it is, you know, atmospherics, uh, certainly the carbon, the super pollutants, ethane and nitrous water. The biodiversity as it relates to soil microbial biodiversity all the way through flora, fauna, entomological, ornithological, right? All the trophic levels, that biodiversity, how important those species are and how interconnected they are. And then the food system from the pollinators to the way we're actually thinking about the nutrient density that's going into people and animals. So for me, all of that is totally interconnected. And I think that comes from, you know, being able to just kind of marinate in folks who lived on the land.
Guy: And thinking about the land as such a broader offering than simply a piece of ag land and the many other things that it's supporting in terms of ecosystem health and recreation and the connection that comes ⁓ through people working the land and running around out there. So that certainly resonates. And I remember running around with my own grandfather, similar, in West Texas, and his relationship there. So great to hear.
Tripp: So grateful to have those, you know, leadership in my life. And just, feel, you know, really appreciative for that and what it's yielded me.
Guy: Now, jumping a little bit into what Pantheon's working on, I think our listeners have probably heard a ton around the pushes to improve forestry management, plant more trees. Here we're talking about wetlands, we're talking about heat lands and a different approach that seems to be picking up kind of a broader set of ecosystem impacts. Can you talk a little bit about heat land as such a powerhouse for carbon sequestration? and kind of what's going on today in terms of degradation and why that is particularly problematic and you know the opportunities there.
Tripp:Yeah, you bet. it's, you know, I think underappreciated in the U S Pete is a, an incredible climatological superhero. And I think it's been, you know, regulated in other markets, Canada, Europe, but here in the U S we haven't really appreciated how important these ancient systems are. mean, these are 10,000 year old systems that have been climatologically resilient, you know, for millennia. And they do so many things. mean, they are saltwater intrusion mitigators. They are. wildfire mitigators. They, in certain iterations, clean the water that recharges the aquifers. They also assimilate toxicity out of freshwater ways in their biomass. So they do so many things. And then, then as we look towards sort of the carbon space, you know, they are the largest terrestrial carbon sinks on earth. So more than all the forest times two. So when you look at the amount of carbon stored in a peat system, you can kind of rank order through nature-based systems how much carbon is stored. And you look at peat and it's thousands of metric tons per acre, which you can't even really even touch in other nature-based systems. The next biggest is mangroves, and that's sort of 400 to 500 ton per acre sequestration or carbon sink capacity. And so they're really powerful engines and they're also very rare. So there are 3 % of the earth's surface that really needs to be, I think, urgently conserved and restored in places where they've been degraded, but not to the level of terminal status. And so here in the US, and peat's used around the world for horticulture, so it's mined and used in planting soils for vegetables and florals. It's also obviously used for the peat in making of scotch. And so there's a lot of reasons that people mine and degrade. these peat ecosystems in the U S a lot of times it sits on top of phosphorus. And so, you you have to basically scrape off the P to get to the phosphorus. And so in the U S we basically have a, an agriculture heavy system that looked across the last two centuries to really maximize the amount of land we could plant crops on and run animal husbandry operations through. so these peat systems were trenched and drained using a network of canals, really. And I'm talking around the East Coast, but there's a lot of different examples of this across the US. And so you have millions of acres that have been basically drained, these freshwater systems that have been drained, and then come to find out, you know, really the microbial composition of these histisols or these peat soils are not appropriate for row cropping. And so they can't really accommodate, you know, the three sort of major species of corn. We the soy that we're looking to grow for the most part in the U.S. And also, you know, these 10-foot peat bogs don't end up lending themselves to run animals through very easy. So we basically degraded these incredibly important climate ecosystems and just let them stay fallow. So we've partnered with Duke University, some of the foremost wetland scientists who've really done this research over 40 years. And we're, you know, commercializing the restoration of these to bring back sort of the natural mean. across all those sort of metrics that I talked about earlier, the water health, the biodiversity health, and the atmospheric powerhouse health to these systems, which have community benefits, obviously, climatological benefits.
Guy: Yeah, the breadth of the benefits is amazing. then just coming back to that, fact that these are 3 % of landmass and 2x carbon content as compared to forest is a pretty wild metric. do you think? know, peatlands are not talked about as much as kind of a climate solution.
Tripp: I think it's interesting because I, you know, I think there's just been a small sort of academically siloed understanding of what these systems are. mean, trees are sort of obvious and probably a little bit easier of a lift to just plant a tree. You know, the hydrological restoration that we have to do for peat is different. think there was also a swamp nomenclature, which were just kind of not understood, hard to access. And you just didn't have a lot of like academic granting and scientific understanding and underwriting in these systems for a really long time. so, know, Duke, again, being the foremost experts, their 40 years of data, you know, was just published kind of in peer reviewed, you know, in the last call it five years. So I think there's pockets of people who've known how important these are, but for the most part, it's just gone under the radar.
Guy: Kudos to the Duke team for trudging around the peatlands of the Carolinas to do the important research. Super grateful for them. And jumping into a trip, you all are looking at tens of thousands of acres, soon hundreds of thousands of acres for restoration. Can you walk us through, what does that physical work look like? What does it take to restore a peatland and practice, kind what's going on on the ground?
Tripp: So I guess just to sort of frame the narrative, we currently own just under 15,000 acres of degraded peat. And I'll just say that this peat is kind of like saying tree, right? There are really specific subsets of these systems. You have sphagnum peat is kind of the mossy, spongy peat that you have in UK and EU. You have beryl peat, which works in tree systems in Canada. This peat is called Picosan. and it's a pine based substrate or an ediferous substrate. So it has really unique attributes and unique properties, just like, you know, an alder would differ from an oak, would differ from a loblolly pine. And so we have, you know, deep subject matter expertise with an enormous proprietary data set on these Eastern seaboard peat systems, which really run from Canada to Florida, all on the Eastern seaboard. So there's tens of millions of acres of these peat systems that are, you know, in an opportunity set to be basically restored, uh, you know, and rewilded. so the goal for us is to continue on that expansion to hundreds of thousands towards millions of acres of Pete restoration. And we have amazing partners who are giving us the ability to look at that and to move as quickly as we possibly can. So the physical work is kind of twofold. Number one, we have a software system. that we do basically screening and sort of fatal flaw analysis for site acquisition, which allows us to understand through the historical databases, sort of bulk density and depths of the peat and then sort of topography and hydrology to understand where there are these degraded peak parcels that are actually eligible both for the carbon registry side of things, but also that are economically feasible in terms of rewetting or restoring the hydrology to its sort of natural mean. So first is sort of a desktop screening that we look across, you know, hundreds of thousands of acres to identify the highest and best parcels. And then we move in and so we have a whole pipeline of parcels that we're moving on right now in addition to the current restoration on the parcel we already own. And it's really hydrological engineering. So you can think about these are freshwater gravity fed systems. And so what we really need to do is return those trenches, those canals to a state where the water is held within the system and then get out of the way. And nature does its thing through precipitation cycles. It will rewet and maintain that like it has for millennia for perpetuity. And so what we do is we go in with hydrologists and engineers and we design water control structures that allow us to. place in a perimeter fashion, if you can think about these water control structures, which allow us to change the water level across a given landscape. So we go in and we place water transducers and gas chambers all across the property. think we have, I'm going to say 60 water monitors, transducers on our current property. That allows us to know the water levels at all times. They take a reading every minute. And then we have the water control structures placed around the perimeter that allow us to move these what are called riser boards in the water control structures up and down to maintain the appropriate water level that has been historically the mean of these systems. And so that's basically the work. It's hydrological flow modeling, it's engineering to build out specific structures for given canal widths, and then it's installation, maintenance, and monitoring of that.
Guy: And ultimately, you're setting the system up to be self-sustaining based on natural rainfall and with relatively limited kind of ongoing maintenance requirements, like kind of once it gets to its steady state.
Tripp:Yeah. So we have, you know, instrumentation and like I said, these monitors that give us the information so that it doesn't take, you know, a ton of interaction or disturbance on the land. Once we get it restored, you know, we're doing a variety of things on the property and one of them is looking at, like we mentioned earlier, the biodiversity. So, you know, we're baselining the biodiversity on the site, which is also again, another sort of like one time set up with limited interaction. And then we can glean, you know, a ton of species data. And we can go into that in a little bit more detail, but that's basically it. And then we can monitor these things remotely, geospatially, and then intermittently with sort of the triangulated ground truthing, which is the core sampling and other things that we do to make sure that the hydrology is where it needs to
Guy:Right, and that type of core sampling over the life of the project ensures that the carbon is permanently sequestered, right, which is obviously key if you are a large corporate offtake that's, you know, trying to purchase environmental attributes, purchase carbon credits, key obviously in their process, right?
Tripp:cool thing about what's happened in the science and the technology space in the last, call it even five years, is there's a bunch of new tech that we're implementing on that. So yes, in addition to core samples, which are a little bit anachronistic, but still we want to have the ground truth thing, we've put up an array of eddy covariance flux towers. These are towers that measure atmospheric gas flux on a real-time basis. So you place these towers in there. And they do what's called net ecosystem exchange. So 24 seven, three 65, they tell you the flux of atmospheric gases coming and going off a given system. mean, for me, it's the panacea of the scientific veracity for the carbon markets for grassland system restoration, for SOC, soil organic carbon stuff. And certainly for Pete, I think for tree systems too, there's going to be an interesting sort of next phase of monitoring and verification. again, above ground systems are easier to use the geospatial technology that's coming out. You know, we're talking about below ground carbon sequestration. So it's a little bit limited by the geospatial side of things. And so this technology allows us to have, you know, really robust scientific data year round, instead of having these sort of intermittent testing and monitoring.
Guy: And to read that one back to you, I'm kind of thinking of it as the systems are able to see the ecosystems, know, lungs absorbing that CO2 and sequestering it over time on a real time basis, right?
Tripp:These have just come into commercial viability in the last few years. They were sort of academic and very expensive. And now you can actually place an economically feasible array and get these readings to a really high quality degree.
Guy: And when we're looking at the various greenhouse gases and the spectrum out there and the impacts of this wetlands, peatland rewetting, I've heard some things around methane impacts and how that then compares to carbon impacts, right? With methane being a gas with a much higher global warming potential. Could you talk through a little bit like that dynamic? Conscious, we might be getting a little wonky, but I think it's helpful to address that one.
Tripp:Yeah. And I think it's important because I think, you know, I'm hearing, you know, the understanding and kind of the epiphany in the commercial markets around super pollutants, you know, how, you know, they have a, a shorter duration of impact, but actually a much higher magnitude of impact. And so we really need to be thinking about, you know, abatements and removals of these other super pollutants, these other atmospherics, because we've been a little bit sort of myopically focused on the molecule of carbon, which is absolutely important and empirical or imperative that we pull out, but the others are important too. So we measure for all of this stuff. At ecovariance flux towers have the ability to do that sort of tripartite measuring that is the net ecosystem exchange. So looking at all of the atmospheric gases, the interesting thing, and one of the reasons why we started in PicosanPete is because these systems don't have traceable methane amounts. And that's a really unique piece in the peat landscape. And it's predominantly because of that pine or coniferous substrate we were talking about. There are phenolics or a certain chemical element to that specific pine substrate that negates the methane. So one of the reasons why we started here is because we know these are all complex systems and appreciate the complexity of them, but this has a little bit more of a ⁓ simple system side of things where we don't have to balance out the methane. Yes, there is in sphagnum, like I mentioned, for instance, a methane balancing that has to happen. Still, we know that those are very valid and important ecosystems, but we have enough here in Eastern seaboard of the US, as I mentioned earlier, to toil over for quite a few years and make a really big impact and not have to worry about the methane piece of that equation.
Guy: Well, that's good to hear. And obviously, I think your background in understanding these systems and the researchers understanding these systems and how you're prioritizing where you deploy first certainly makes a ton of sense and clearly thoughtful in that approach. So love to hear that. All right, we alluded to this a little bit. I do want to hear about the very cool audio systems that are able to track biodiversity. across these parcels. So if you could just give us a snapshot on how that works and what you're starting to see in these ecosystems and as they're restoring what exciting things are happening.
Tripp:It's really cool. And we, you know, I feel really grateful that my supporters, you know, have the mission alignment and the ethos to care about this part of the equation, because I do believe on two fronts, you know, biodiversity collapse is real having lost, you know, at least 50 % of the global species since the, you know, the 1950s is catastrophic. ⁓ and these are biodiversity hotspots, these peat wetlands. And so we have a real opportunity to, know, at a minimum stave off the increasing collapse and we hope regenerate these on a couple different levels. we have a restoration ecologist who's our head of biodiversity. And so we are basically measuring, think about all trophic levels of species inventories, pre-restoration to create a baseline of kind of what's there now, and then look and monitor how that changes through time with restoration. Okay. And so it's also. If think carbon's complex, biodiversity is next level, orders of magnitude. But we do that baselining by doing a couple of different things. One, we do eDNA sampling. And so these are water samples, which we've done all over the 15,000 acres. And basically everything sloughs its DNA and runs into the waterways long and short. Thinking about this, you can pick up an enormous amount of data by sampling these waterways and understanding you know, the DNA of what all of these species are. So that's, that's one component we use, which is yielded just an amazing amount of information. We also then use acoustical capture towers, which you were referring to. And so these are, you know, towers that we set up that basically have very sensitive microphones on them that can pick up a variety of sound signatures, really think heavily like bats and birds to understand what's happening on those trophic levels. baseline and get an idea of species inventories. And then we use game traps and like the old school game traps that, you know, take and catch the sort of the mega fauna, if you will. So we catch the, you know, in this particular area, the, black bears, the bobcats, the weasels, the deer, the bigger species, you know, that you wouldn't be able to pick up in other fashions. so the EDNA kind of gives us like all the aquatic species, the invertebrates. you know, lot of the pollinators, insects, and then we kind of put all that information together in a dashboard to look across what is, you know, thousands of species that reside in these wetlands. I mean, they're just teeming with life. And then we look at a, we've built a protocol that we believe is eventually going to be a delineated credit, much like the biodiversity net gain you're seeing in the UK. and that we could actually have another stackable income stream on top of our carbon credits to be able to bring again, sort of that yield into focus in parity with other asset classes to attract capital into this kind of conservation rewilding effort. And so, you the idea is we're partnered with US Fish and Wildlife, reintroducing red wolves, which are an endangered species. There's only, I believe they're not less than 20 on the face of the earth. We had three. that were on our property and denning on our property in 2025. So really important efforts to bring back a piece of those trophic levels to keep everything in harmony. And then we have a culling program around invasives because as these landscapes have been changed in ways that accommodated other invasive species and allowed sort of an imbalance in certain species, you know, we're going to be able to bring them back to. A metric of ecosystem health, which is like where this system would be if we, if you didn't have sort of the human interaction and degradation. so, with the biodiversity and all the high tech monitoring equipment, we're super excited to have Microsoft involved with us as investors, cause they have a sort of an ecosystem software service business that's really bringing AI into these data lakes. can imagine with what I just told you, how much information. And historically, these are the domain of wildlife biologists who are then going through hours of game cam footage to understand and then come up and extrapolate what those species numbers are. Now, you literally can train an LLM on these data lakes and in ⁓ minutes, you can have an understanding of these systems, which would have taken months before with the analog sort of human interaction. So there's so much cool stuff happening just on the biodiversity front.
Guy: Now, just absolutely fascinating and speaks to a solution here that just has such far reaching positive impacts and certainly, you know, a story that then resonates for big investors like Microsoft and, you know, your partnership with AXA. So it might be a nice place to kind of shift into talking about, you know, how have you set up these partnerships, frankly, with you know, some of the financial heavyweights in voluntary carbon markets and then just financial markets. How do you think about these projects, structuring them to look a bit more like infrastructure as opposed to philanthropy?
Tripp: One of my aha moments was the need to sort of transliterate the financial benefits of ecology to, you know, the institutional and public markets because, you know, philanthropy is critical, you know, for the early granting, for sort of the academic research. I mean, there is a place for that in sort of this climate, you know, poly solution set, but it's glacial. They don't move at a speed. I don't think that can meet the urgency of what's happening globally. And so really that's where, you know, commercial markets and entrenched actors need to come in. But that's about ROI. Like at the end of the day, like you need to be able to see a return. And so, you know, one of the things I think that's been holding the space back a little bit is it's heavily academic and you have a lot of sort of, you know, tech startup entrepreneurs that haven't had a financial track record. and haven't been in financial markets and a big missing piece of understanding the ecology, the science, the tech, you know, is being able to articulate that to the financial stakeholders to understand that there is a, you know, a risk reward profile that fits in a diversified portfolio. And that can be incredibly beneficial on multiple levels. And so I think that's, you know, one of the things that I endeavor to do is bring that forward with Pantheon and create. You know, a team, which is what I think, you know, as an investor, you know, I look at team and it is probably the most critical attribute of any given company. Yes, you have to have a total addressable market that makes sense. Yes, you have to have a product that makes sense, all of that, but with the right team, you know, you can accomplish a lot of things. And when I unpack that, you know, that, that is the right skill sets in the right seats. You know, that's part of team, a track record. You know, that is relevant. You know, that's about team two and quality, but then there's another, you know, certain special sauce that's around sort of the, the passion and the cohesion of that team. so through all my experience and dealing with a lot of different teams and then investing in teams, you know, I wanted to build a team that I knew could bring high quality science led projects to the market with a financial robustness that would actually land. And so I think that's, you know, I have an amazing team. of folks who have done development projects in solar space and the wind space, right across a variety of different asset classes with deep track records who are also incredibly mission aligned and passionate about all the things that we're doing. And so I think that's what allowed us to bring AXA into our cap table to bring Microsoft into our cap table. They all invested in the Pantheon platform, which, you know, we basically set that up as a platform that's going to do landscape scale, restoration, reintroduction, and conservation using a set of ecosystem income streams to bring that yield. And we do that in the sense of sort of a topco propco model. So we've got SPVs or propcos that actually own the land that we finance in a variety of ways based on the particular attributes of what those income stream stacks can be. So, you I think like you and I've talked about before, you know, it's carbon, it's water, it's hopefully eventually biodiversity as we've talked about, it's farming, regenerative polycultures, it's conservation easements. So, you know, that's sort of opportunity set is jurisdictional in a lot of different ways. And so that's what we use the software for is to basically understand when we look at a given parcel of land, you know, what's the opportunity set so we can build out a financial, sophisticated financial pro forma. that we can take to our investors and say, this is a piece that we should purchase. And, here are the sensitivities around expected returns and here are the risks. And I think that's a sophistication that you're seeing growing in the carbon markets, but has been lacking thus far. You know, and I'll look at, I'll call out some of the winners in that, think, you know, Chestnut Carbon, who just did a deal with Microsoft and with JP Morgan kind of put the first like large scale market. financing stack together, showing that you can pair off take with, you know, market rate debt and the right size equity for infrastructure projects, which is kind of one of the first of its kind. mean, that's what we are trying to do on the Pete side. We're a little different because Pete, this is the first Pete project that'll ever be brought in the U S tree projects obviously have, you know, a long track record in history, but that's the goal. And I think there are emerging, you know, sophisticated players that are bringing those high quality, really defensible projects to market.
Guy:Right. No, and I think what you've done on building that team and helping the space leverage some of the learnings from other infrastructure projects, thinking about, hey, we've got an offtake agreement for carbon credits and for other environmental attributes, and we can lend against that stream to fund the upfront restoration of these peatlands. It has a scalability to it that I think is really important. right as we go forward and getting kind of the nuts and bolts right and all the legal agreements dialed so that you can scale it as an asset class is certainly something that I think is incredibly exciting.
Tripp: And again, if you have the sort of purview of big infrastructure projects historically, you can see the patterns in the templates that can be brought into this space, which is again heretofore just been a little bit underappreciated.
Guy: Now, could we touch a little bit on kind of the voluntary carbon markets, you know, the big off takes from Microsoft when there was a large, large portion of the market and then some of the other corporates there. You know, how are you, obviously we've talked about the breadth of other environmental positive impacts here, the wonderful story that goes into your projects, the rigor that goes into it, but you know, how do you think about, we've got sort of shifting sentiments around voluntary carbon markets, and there's some cap on the size of like how big these corporate commitments can be. But again, you all have, you know, secured super large off takes. Congratulations again on the, the Inlandis announcement for a hundred thousand credits. Yeah. Could you just give a spotlight on kind of voluntary carbon markets and how you see those going?
Tripp: A lot to unpack there, but I guess I'll set the stage by saying part of my aha moment in creating Pantheon was seeing sort of the blights and shortcomings of let's call it VCM 1.0 and really building around a methodology that solves for all of those. So really thinking about additionality, really thinking about permanence, really thinking about duration risk and really thinking about co-benefits. Right. think a lot of those had been omitted in the previous sort of iteration. And so we, we really formed Pantheon making sure that we had, you know, all of those nailed without any question in any of our minds as we would go down to a given project. so I think we start there. Second, there's an interesting sort of some metrics that I'll give you. You know, there were basically a hundred called 150 million credits issued in 2025 of that, though, about a million. removal credits in 2025. So the removal space, which we're, we focus is, and where the nature-based side of things focus is a really big growing component to the flight to quality in the carbon markets. So I think you're seeing people acknowledge that it's really important that you have reduced the offtake risk by investing in projects that meet sort of that quartet of attributes that I talked about and that are removals with some of the new sort of stamps of good housekeeping, like the CCP, ICVCM, these quality sort of. Correct. And so I think you're going to see, you know, I think you've seen a disjointed market. I think you're now seeing an interesting inflection point because compliance markets are really volatile and there's a lot of policy and regulatory risk within those markets with kind of the current atmosphere. And so.
Guy:That's one of the certification platforms.
Tripp:there's a, I think there's a real turn to the voluntary markets. And we've seen an incredible amount of growth in just the offtake agreements and the issuances in the last like six to nine months. Obviously Microsoft is leading that charge, but we're starting to see a lot of other players come to the table. And I think it's a, there's two major reasons that I see one is we are now within line of sight to 2030 and 2030 is a very large sort of line in the sand for net zero goals for. a lot of global stakeholders. And as I just mentioned, there are very few high quality credits on the market. So there's now a real push and it's sort of a price push on those credits. I will then say there's another sort of global regulatory scheme that's coming called Corsia. And we're in phase one of Corsia right now, but it's the international airlines carbon programs that are requiring these really high quality removal credits. And again, estimated by 2030, just to give you some dimensioning, that's going to be 130 million metric ton a year market. You can see that we're at a million this year, growing in the next four years to 150 million. You know, there's a pretty big supply demand mismatch here for the good stuff. So, you know, we feel pretty bullish about what that means in terms of price premiums for developers. and what that means for the buyer sort of ecosystem and universe. We're seeing that aperture open up. Microsoft can't carry the weight, but you're starting to see, you know, the Googles, the Amazons, you're starting to see these coalitions like Frontier and Symbiosis come together. And now you're starting to see sort of a middle market emerge of a variety of other folks who are buyers. And that's the tech companies, like we said, that are obvious. The energy companies have an enormous amount of need. mean, Shell alone. has a hundred million metric tons annually to offset their scope three. that, so you start to dimension what the needs are globally and you understand why there's sort of this push for new high quality developers and deals starting to get done because the opportunity is pretty incredible. And then you have sort of the airlines, which are going to be a really big piece of this market. So I think we're in a unique time right now where we're kind of moving from, you know, some defaults and some shortcomings of different project developers and sort of an early. stage through this maturation period where you're starting to see more sophisticated developers who are able to put, you know, really button down projects together, downside hedge the risk on a lot of levels. And that's one of our thesis in terms of being real asset and actually controlling the land, similar to a chestnut, and that we can really control the duration risk on that land. And, you know, at the end of our restoration and program development, you know, we endeavor to put these lands into permanent conservation. And that's whether that's working with fish and wildlife, selling it back to the refuge system or the national lands system, which there's an appetite or just putting conservation easements to encumber those titles for, you know, so that they'll never become an oil and gas lease or a shopping center or whatever guarantees the duration of that carbon offtake agreement in that carbon stream, which is one of those issues that was, you know, a problem in the previous iteration.
Guy:bringing that rigor and confidence as it relates to both the upfront process that ensures the positive environmental impacts, the carbons being sequestered, but then also the permanence there. So, now that's super exciting in terms of y'all's leadership on ⁓ this coming wave of the more and more similarly high quality restoration projects and carbon focus going forward.
Tripp:Yeah, and I think you guys get this, because of, you know, I have such deep reverence for what you guys do, but you know, what I think the market is waking up to also, because nature-based solutions have been such a small part of the carbon market, you know, it's been heavily engineered. Like there's all this stuff around, you know, CCS and DAC and all these bricks and all these other technologies, they're very expensive just for breakeven. You know, those price points are, you know, really, really high. And the nature-based solutions are a very elegant, low cost entry into these high quality removal scenarios. And so I think the world's waking up to, we probably need it all. And so, you know, I'm not throwing shade on any of the engineered solutions, but when you think about a DAC plant that costs a billion dollars to put up, you know, doesn't have any consideration around water or biodiversity and has been pulling out thousands, maybe tens of thousands of credits on an annual basis. And you look at nature-based systems that can pull out hundreds to millions. of metric tons out of the atmosphere on an annual basis at a much lower cost. You know, take that shell example and you look at a hundred million metric tons annually. Well, I mean, to your point, there's a ceiling or delimiting price at which point it's more than shells market cap. There has to be a reckoning of the sort of cost balancing of the removal schemes.
Guy: And to the extent that you can disclose, alluded to a little bit kind of the comparative price between carbon removals through direct air capture and other systems as compared to what you're looking at here on the nature-based peatland solutions. What is that kind of price range generally on the price of credits from your system, if you can disclose that?
Tripp:There's a lot, I mean, I would say the bandings are in the highly engineered stuff. You can be in the called thousand, as sort of in that general range. Nature-based solutions, you can be in the hundred. So, it's sort of a 10X less sort of price point than some of those expensive 45Q reliant technologies. massively, massively different. And I think, and again, I continue to say those with the remote monitoring. with the instrumentation that doesn't take boots on the ground all the time, with a lot of things that are evolving, that price point can continue to come down while sustaining a given project IRR for VLPs. And so I do see that cost curve. I see it going up, like I mentioned, because the supply to man mismatches for specific high quality nature-based credits is way out of whack. But eventually, there'll be enough projects that come online that are able to bring that down. And the cost curve of developing those projects comes down as well.
Guy: and which then leads to just the broader financial sustainability of this market going forward.
Tripp: I mean, there's a lot of things like this is such an immature market in a lot of ways. There's rarely an insurance component to these projects. I you think about any other solar, you think about any other infrastructure project, you've got this wrap, indemnification wrap. And so those things are just brand new. There are companies that are coming to market that are doing that, but that then brings in the banks and then brings this into a market rate debt environment, which again brings down project costs, because right now everybody's paying equity. basically returns for getting these projects off the ground, which is very, very expensive. But I see that market changing and I, you know, I'll, will just say for the first time at carbon unbound where I was last week in Vancouver, I've been at that event multiple times, never seen banks there before and all the banks were there and all the banks were talking about their standing up their carbon initiatives for, 2026 and beyond. So I, I'm starting to see sort of a shift, you know, sort of a tectonic shift in the landscape.
Guy: The maturity both on the development of these projects themselves, but then the ecosystem on the back end, that's going to help fund them going forward. So, now excited to see how our team at Hasse can help be a part of that as well going forward. When you look at those traditional infrastructure investors that we talked about a little bit there, what is something that you'd like them to maybe ⁓ understand a little bit more about the value of natural capital, the value of these systems? something that they might be not quite appreciating as much today. ⁓ And going forward, you know how that might change things.
Tripp:Yeah, I mean, I think, you know, we're beginning to demonstrate that, and I think this has just never been thought for except in production systems that you really can see a meaningful yield with a really reduced risk profile in these kinds of infrastructure, nature-based infrastructure projects. And I think, you know, now there's, there's a whole litany of examples that you could throw out there. And like we just said, it's beginning to mature and get to a point where, you know, it is really bankable. so. You know, I think some of it's just, it's so easy to sort of have one muscle and not want to get outside of, your box. And so, you know, I'm imploring sort of the institutional, the real asset folks to really take a different look at this lens and at some of the high quality, you know, sort of leaders in the space, because I really think you can have a very de-risked, very high quality return project in the space that maybe before. wasn't as clear. And I think everybody stayed sort of away from on that side of things. I do think too that the understanding the markets, as we talked about here, not only the carbon market, what's going on there, looking at whether it's the McKinsey forecast, the World Bank forecast, there are data sets out there now and forecasts that sort of reinforce what I've said to you on this podcast about those growing markets. And so I think it's a first mover opportunity to have actually outsized yields. in sort of the next, what I would say is five to 10 years before it becomes, you know, another sort of homogenous asset class and those returns pull back. So I think there's actually an opportunity set here in the next little while to sort of have outsized returns, but you got to understand the market and you know, these are new burgeoning markets.
Guy: Get in early while the getting's good and you can partner up with the best folks and have both incredible environmental impact, but ⁓ as well capture some of the financial upside here as well.
Tripp: I would just add onto that guy that like I'm been working on this thought piece for quite some time about environmental inflation. And I think there, you know, it's very obvious in a couple of things to call out, you know, talk about insurance markets on in Florida coastlines or talk about, you know, insurance markets in California because of wildfire risk that, know, just two examples of the sort of environmental inflation that is burgeoning and only speeding up. And so I think as we look forward, you're going to see an understanding that there's both a carrot and a stick to nature-based capital solutions that, you know, they are hitting income statements, reducing incomes by increasing costs and reducing asset values on the balance sheet. And so as you have a sort of a holistic look from, you know, the sort of institutional and public set, you both can garner a yield that I think has, you know, parity with other asset classes and is diversifying in a portfolio, but also helping to reduce that environmental inflation, which is dragging on your financials and your shareholders.
Guy: And yeah, we're talking about beat lands here, which help address both that, know, stormwater surge address wildfire concerns and have a whole host of other resiliency benefits. So it's great stuff. And wrapping here, when you look at kind of the work today at Pantheon and your path to get here, what's something that you're you're particularly grateful for?
Tripp: I will always go back to my, you know, my family, ⁓ as being helping educate me and help me see the world through the lens that I do. But I think without my stakeholders, without my LPs, know, friends, families, which then ended up in sort of institutional capital, we certainly wouldn't be here. So I have a deep bench of gratitude for the catalytic capital that they brought into this concept, you know, to plus years ago when it was just an idea in my head and really backed me and believed in what I was doing and has allowed us to get here today. you without those folks, I wouldn't be here.
Guy: I love it. One last one for your trip. How can our audience, you know, help your good work at Pantheon and what can we do to kind of elevate the story, support the platform, anything aligned with your broader efforts?
Tripp:Yeah. So, I mean, I think a couple of things, know, storytelling and being able to sort of broaden the message. I think I need as many folks who, you know, are interested in or compelled by what we're doing and by the nature-based space sort of writ large, you know, to talk about it, to share resources and to get other people, you know, educated and interested. I think it's profoundly important for people and planets personally. And I, you know, can use all the help I can get to bring, you know, a larger audience into the space. which will yield buyers, which will yield landowner partnerships. I think that's, you the next is ecosystems and landscapes that we can partner with, you know, that we can acquire obviously, but we have a couple of different models for thinking about that restoring ecosystem health. Anybody who's interested in that, you know, we would love to be able to have a conversation with you and bring some of our subject matter expertise to, you know, how you can think about a legacy for your land that doesn't have to be philanthropic, that can also have a yield to it, right? Well, steward it in a way that I think is super important for the future generations. And then I think lastly, we need good people. I need people who have come from other areas, not just ecology and biology and the science side of things, which is super important in our world. But, you I need those folks who can help commercially develop and do kind of what I'm doing as a one-man band and transliterating this stuff to the broader financial market. So good people who are interested in the work we're doing, we're building team. and would love to talk to anybody who's interested in joining ours.
Guy:Fantastic. Well, Tripp, exciting times ahead. Once again, deeply grateful for your efforts with Pantheon and look forward to figuring out how we can all support as best we can going forward. So Tripp, cheers. Thank you. And chat again very soon.
Tripp:Always appreciate your insightful questions in our conversation. So thanks for inviting me on. It's been a pleasure. All right, cheers. Have a great one.
Guy: If you enjoyed this week's podcast, please leave us a rating and review on Apple and Spotify. It really helps us reach more listeners. You can also let us know what you thought via Twitter at ClimatePOSIpod, or email us at climate positive@hasi.com. I'm Guy Van Syckle and this is Climate Positive.