The Savimbo Project
Fair-trade carbon credits
A carbon reckoning is coming, a carbon tax seems likely, and the price of carbon credits is set to skyrocket as nations and companies alike seek to offset their carbon footprint. Savimbo’s fair-trade carbon credits will sell far above market price, here's why.
“The reason we should do a carbon tax is because it’s the right thing to do. It’s economics 101, elementary stuff.”
Photo by Pat Whelen on Unsplash
As extreme weather events continue to get more frequent and carbon reduction promises loom ever closer. Companies and nations are growing increasingly nervous about the risks that lie ahead.
For nations, the risk is clear: increasing extreme weather events lead to deaths, destruction, and loss of income. Growing public outcry coupled with looming carbon emission reductions is placing increasing pressure on politicians to take immediate action. But there is really only one thing they can immediately do: a carbon tax.
Taxing carbon-emitting companies for the perceived damage they are doing to the environment will help politicians to be seen to be punishing those responsible while generating funds for damages and future efforts. Rightly or wrongly, a carbon tax will pass the burden of the cost of climate change from nations to CEOs, and many high carbon footprint (carbon-emitting) companies are starting to realize they must offset this very real risk.
Climate change is a global game and companies can be charged by any country for the carbon they emit anywhere in the world. You only need one country to charge a carbon tax to severely impact the profitability of many international companies. Many companies are worried they may have to pay for their carbon footprint many times over.
What are carbon credits?
A carbon credit is proof that a certain amount of carbon dioxide (or equivalent greenhouse gas) has been removed from the atmosphere. Typically, a carbon credit is sold by the ton and allows a carbon-emitting organization to offset its carbon footprint to some extent (hence the name carbon credit).
For example, a commercial airline might emit 20 million tons of CO2 into the air in a given year. This airline might look to offset this amount by purchasing 20 million tons worth of carbon credits, which would (theoretically) make the airline’s carbon-footprint zero (carbon neutral) and so it will not be taxed.
The very significant risk that a carbon tax represents is causing many large corporations to proactively purchase carbon credits in large quantities to decrease financial risk. In 2021, McKinsey forecasted a 15x growth in the cost of carbon credits by 2030, and a 100x growth by 2050. Such a sharp increase in price demonstrates that supply is woefully trailing demand. So how is a carbon credit made?
Currently (and by a big margin) the simplest way to remove carbon from the atmosphere is to grow trees, billions of trees. We all learned in school that trees take sunlight and carbon (CO2) from the air and turn it into sugar and oxygen. Trees ultimately use these sugars to grow wood, converting CO2 into a solid form.
About 1/3 of the mass of a tree is carbon, all of which is extracted from the air. For example, General Sherman (the biggest tree in the world) weighs about 1,900 tons. This means General Sherman contains about 600 tons of carbon and as long as General Sharman is standing and healthy, this carbon will remain locked up in the tree.
And this is the catch - the tree only holds carbon while it stands, once cut down, rotting, or consumed by wildfires the CO2 is released back. This means it is not enough to grow trees. You need to guarantee the tree stays standing and healthy or the carbon credit is worthless because no carbon is locked up.
Companies will need to prove their carbon credits actually relate to standing trees to offset their carbon footprint. This typically means some sort of certification or standard and someone to enforce it. Not all standards are equal, some are low quality and others are premium. It all depends on where you grow the trees, what type of tree, how long they live, if it helps the native environment, etc.
There are many factors to consider and academics are still debating the details, but needless to say, companies pay a premium for carbon credits that are more reliable, better at reducing risk, and come with other ESG perks like improving communities, restoring wildlife, preserving biodiversity, etc.
What is a fair trade carbon credit?
Savimbo offers the most premium carbon credit imaginable: fair-trade carbon credits.
“Fair trade is all about improving lives, but we don’t do that through charity - there is no handout in the fairtrade movement. People are solving their own problems through Fair Trade.”
One of the best places to grow (or preserve) trees is the Amazon rainforest. Often called the world's lungs, the Amazon rainforest absorbs a staggering 25% (600 million tons) of CO2 every year — producing oxygen for us to breathe and slowing climate change. Unfortunately, carbon is not the only natural resource present in the rainforest and many seek to exploit its natural wealth for lumber, cattle, and minerals - which is driving an unprecedented rate of deforestation here.
A UN Report found about 1/3 of the Amazon rainforest is owned by indigenous groups, and almost half of the undamaged rainforest is owned by them. Indigenous peoples have lived in the rainforest for generations, they understand better than anyone how to co-exist with the rainforest, how it grows, how to care for it, and how to preserve it. And they are open to sharing its benefits in sustainable ways.
In the words of our indigenous partners from the Colombian Amazon:
“Well-managed ecotourism is beneficial both for the local population and for those who have the opportunity to get to know an ancient culture and feed on its worldview. When I say well managed, I mean that it must be a respectful tourism for the identity of those who open their doors to the world, as well as for the natural environment in which they live [...]. Becoming visible to the world will allow institutions and foundations to support them in the defense of their environment, both cultural and natural. ”
Savimbo works with Indigenous groups who choose to harness the enormous potential of the carbon they possess. Much like other fair-trade products (coffee or chocolate for example) we work directly with communities to give them a fair-market rate on their products and create local economies based on international reforestation needs.
Our local and indigenous partners initiated the Savimbo project. Asking us to build a company that could work with them to preserve and replant the Amazon rainforest, retain biodiversity, protect wildlife, while providing a fair income source to create a lasting peace! Savimbo does all of this, while providing a product that large corporations need: reliable, audited, quantified carbon credits with substantial ESG upsides. (Yeah, we’re happy about it too!)
Savimbo’s fair-trade carbon credits are a win-win for large corporations and indigenous peoples alike. The only people who lose out with our model are the middlemen, and that's fine by us!
The middlemen, and why carbon credits must be fair-trade!
As with any market, there are middlemen and the carbon credit market is no different. Typically, a middleman exists because the sellers and buyers struggle to deal directly with each other because of differences in geographic location, language, values, scale, etc.
Like many very successful fair-trade companies, the Savimbo project works by understanding the needs of both corporations and indigenous communities. One of our core values is trust, and we earn that trust by being transparent and results-driven: from the boardroom to the rainforest, Savimbo is a direct connection between these two disparate places to the benefit of both. Our fair-trade carbon credits improve rainforest communities and corporate profits alike, to produce a cleaner, better world, preserve life, and reduce the risk for all.
Just like fair-trade coffee, Savimbo is appealing to buyers and sellers alike and will sweep the market simply because we transact fairly with all parties in it.
“We can’t save the world by playing by the rules. Because the rules have to be changed. Everything needs to change. And it has to start today.”
Savimbo, a great green deal
A carbon reckoning is coming and a carbon tax seems likely. Companies are increasingly looking to offset the risk they face from emitting CO2 with carbon credits. The carbon credit market is predicted to grow 100x by 2050 for this precise reason. Savimbo is a premium fair trade carbon credit product, it benefits indigenous groups and corporations alike - and for this reason, its fair trade carbon credits will trade far above market price.
Those who reserve credits now will help indigenous communities, reduce their carbon footprint in objectively verifiable ways, and make a profit…
There is no reason that saving the environment, and good business are an either-or. At Savimbo, we’re proving that both are possible. Join us today!
Written by Leon Vanstone, PhD and Drea Burbank, MD. Leon is a recovering rocket scientist, and Drea is an MD-technologist.