Announcer:
From the Library of the New York Stock Exchange at the corner of Wall and Broad Streets in New York City, you're inside the ICE House, our podcast from Intercontinental Exchange, on markets, leadership and vision and global business, the dream drivers that have made the NYSE and indispensable institution of global growth for over 225 years. Each week, we feature stories of those who hatch plans, create jobs and harness the engine of capitalism. Right here, right now at the NYSE and at ICE's exchanges and clearing houses around the world. And now, welcome inside the ICE House. Here's your host, Josh king of Intercontinental Exchange.
Josh King:
The New York Stock Exchange has two large halls that anchor the thousands of events that happen here at the corner of Wall and Broad Streets, every year. Most listeners are familiar with the boardroom, but there's an equally extraordinary space on the floor just above the library, where we're recording this episode of Inside the ICE House today. It's called Freedom Hall and it's named after our enduring connection to capitalism, spanning more than two centuries, to the founding of this country and the free markets. Also, right upstairs is what we call the wall of leaders. And etched on the wall, among black and white portraits of the leading modern minds of business, are the following words. Here we salute those individuals who had the passion and insight to create a new business model or category, something that didn't exist before. Alongside that description you'll see, if you pay us a visit here, about 25 portraits, people ranging from Warren Buffett of Berkshire Hathaway to Mark Benioff of Salesforce, to Safra Catz of Oracle, to Phebe Novakovic of General Dynamics. Even Jeff Sprecher of ICE, all NYSE listed companies, of course.
That inscription is also a fitting description of the event taking place in Freedom Hall today, ICE's climate and capital conference. The event brought together industry leaders in the investment business in climate communities to discuss a wide range of climate topics, including strategies to align capital with solutions to measure and manage climate risk. It's a real world dialogue on technologies and solutions that's a fitting complement to the activities happening across New York City this week as climate week, the Clinton Global Initiative and the annual United Nations General Assembly get going. And you don't have to go farther than your TV set or your smartphone to see the unprecedented weather impacting billions of people across the globe. But you do have to dig a little deeper to see the many ways that innovation is spurring ways to slow emissions and even reduce the amount of CO2 in the air.
Some of the solutions being discussed at the NYSE today are so new that they haven't even been formally and launched or announced such as ICE's plans to host carbon credit auctions for GreenTrees. Each auction will represent the removal of the equivalent of 250,000 tons of CO2 from the atmosphere. Joining the podcast today to explain how GreenTrees and ICE are going to accomplish this is GreenTrees' co-founder, Chandler Van Voorhis. He's joining us fresh off the stage to talk about the tandem strategies of reducing emissions while looking to nature to offset the human impact on the planet. Our conversation with GreenTrees' Chandler Van Voorhis on the science of carbon sequestration, the economics of pricing nature and the solutions that ICE and his company are bringing to the market. That's all coming up right after this.
Speaker 3:
Connecting the opportunity is just part of the hustle.
Speaker 4:
Opportunity is using data to create a competitive advantage. It's raising capital to help companies change the world.
Speaker 5:
It's making complicated financial concepts seems simple.
Speaker 6:
Opportunity is making the dream of home ownership a reality.
Speaker 7:
Writing new rules and redefining the game.
Speaker 8:
And driving the world forward to a greener energy future.
Speaker 9:
Opportunity is setting a goal.
Speaker 10:
And charting a course to get there.
Speaker 11:
Sometimes the only thing standing between you and opportunity is someone who made the connection.
Speaker 12:
At ICE, we connect people to opportunity.
Josh King:
Our guest today, Chandler Van Voorhis, is the co-founder and managing partner of GreenTrees. The firm engages more than 600 landowners to plant over 130,000 acres of trees that have generated carbon offset credits equivalent to removing more than six million metric tons of carbon from the Earth's atmosphere. Prior to GreenTrees, Chandler was the co-host of GreenWave Radio, a nationally syndicated radio talk show on business and the environment. Welcome Chandler, inside the ICE House.
Chandler Van Voorhis:
Thank you, and it's great to be here.
Josh King:
Busman's holiday, you in front of the microphone again?
Chandler Van Voorhis:
Yeah. It's first time in a while.
Josh King:
How did you get into radio? What were you doing?
Chandler Van Voorhis:
I was head of a group called Alliance for environmental education and we were having a discussion with a board member and he said, "What are we going to do with all this education?" We've gotten environmental education in K through eight and basically 33 states, and it was voluntary in other 10 states. And we started talking about, what's business going to do with all this information that we're doing. And so we started to look around and say, that's a good question. What is business doing? And my business partner, who was a board member at the time, challenged me to go out and find a hundred stories that where businesses are doing something positive. And I came back with hundreds of stories. And so we, for seven years did, a radio show around the intersection of business in the environment.
Josh King:
From seven years on the radio to here at Wall and Broad Street today, you're just on a panel with our own managing director of utility markets, Gordon Bennett here at ICE. Can you give us a rundown of what was discussed and who joined you on the panel?
Chandler Van Voorhis:
Yeah, so Augustine from Conservation International joined me on the panel and really we were discussing looking at the different variations of nature-based solutions and how does the capital markets need to look at nature. And really had a enlightening discussion around what it means to the landscape, but also how the investment communities to be looking at this as a technology investment, as an infrastructure investment.
Josh King:
During the discussion you brought up the concept of an and plus mindset. What does that entail? How could it change our ability to fight climate change?
Chandler Van Voorhis:
Well, if you look at science, the science is telling us that we need to scale up nature and we also need to scale up our investments in the renewable and efficiency. And far too often, people have looked at offsets, this term offset, as kind of a bridge strategy to a low carbon world. But science is saying, well, no, that's not quite right. We really need to enhance nature. When you look at what science is saying and saying, we've got to reduce our missions moving forward through wind, solar, EVs, all the different approaches that are there, direct air capture. But how do you repair the past? How do you recalibrate what's already been put up in the atmosphere? And when you start to look at nature as a technology, mother nature's technology, which is trees, grasses, and soils, and you start to see that there's a genius of that, then how do we organize that in such a way that we can start to recalibrate that atmosphere while we're making this tremendous investments into a renewable world?
Josh King:
An important part of the distinction for our audience to keep mind is this difference between carbon reduction and removal. I've heard you describe it as offense and defense. Why is it time, Chandler, for us to play offense?
Chandler Van Voorhis:
Well, I've been in this for 26 years and we've spent a lot of time trying to save forests, and rightfully so. But we've spent very little time in terms of how we are going to actually go out and restore lands. And part of that is that it was easier when you've got an existing forest, to generate credits. The forest has already been built, you're just making a management change or you're protecting it. With reforestation, you've got to build the forest first before you can create the carbon and it's got a long period to it. And sometimes longer than the capital is willing to stay in that game. And so in a early on market, what happened is that the folks really gravitated around the shorter term, higher yielding credits, which was in the defensive side. Now we got to play climate offense. We got to get into river systems, we got to plant millions and billions and trillions of trees across the globe in different areas and really scale this up in a way that we can start to put points on the board instead of just being scored on.
Josh King:
I've been paying attention to some of these efforts. Salesforce and mark Benioff have a goal of one trillion trees. So when you use the plural and say, trillions of trees, is that possible?
Chandler Van Voorhis:
Yeah. There's three trillion trees that are in the world right now. So there is a global goal of called one trilliontrees.org, or 1t.org, which we're a founding member of in the US chapter, along with Salesforce. And really, it's how do you organize and plant those trees? But we can't get caught up in the act of tree planting by itself. The ultimate goal is to plant a forest. Trees come and go, but a forest is perpetual. And so we've got to really hone in on what the end goal is here. It's really to create a working forest for the long haul.
Josh King:
Offense, defense, you look at the Greentrees website, you're quick to use sports analogies, and maybe there's something about it that sort of stems back from the Van Voorhis family. Big sports family, I know your daughter, Hailey, plays football for Shenandoah University.
Chandler Van Voorhis:
She does. She's apparently the first girl in NCAA history to play other than a punter or kicker. She's a free safety for them. So we're quite proud of her and our son as well.
Josh King:
How has Shenandoah started this season already?
Chandler Van Voorhis:
Awesome. 3-0.
Josh King:
And got a lot of playing time?
Chandler Van Voorhis:
Not yet. She's a sophomore. They've got a lot of, because of the COVID, there's a lot of bunching up of some of the older kids that are getting one more year in. But I think her time's coming soon.
Josh King:
Were you a football player?
Chandler Van Voorhis:
I was not. I played lacrosse, I played tennis. I love football, but I would always play with her in the backyard.
Josh King:
In 2014, you began a Ted Talk saying your family calls you the Lorax with a calculator. And I want you to share the value of a tree and how we can use trees to build equity back into the planet.
Chandler Van Voorhis:
So if you look at a tree, a tree is 25% carbon, 50% water and 25% other things, glues, liggons, things of that nature. And the question is, how do you put a value on that? Ultimately, a tree has only had a value when a chainsaw hit it and turned it into lumber or paper. So it was very extractive moment when trees became valuable in our capitalistic order. As we started to put a value on the carbon component or the biodiversity component or the water storage, we're starting to value a tree as a tree. And when we do that, we're fundamentally enlarging the orbit of capitalism. And that's what is so exciting. And when I first got involved in this, the only time a tree showed up on the balance sheet is when that chainsaw hit it. Now, we've got land managers asking, well, is that tree worth more up than down? And the fact that they're asking that question is a fundamental change.
Josh King:
I gather your interest in education came from your father. But you said that business and the environment has really been in your DNA this time that you were the Lorax of the calculator. Where did the passion for conservation come from?
Chandler Van Voorhis:
I mean, just as a kid that I was very much into, I was a naturalist. I wouldn't call myself an environmentalist. I was a naturalist that really cared about the outdoors, enjoyed fishing, a little bit of hunting here and there, but hiking, and just really enjoyed that connection to nature. But always was just didn't quite understand why we were making some of the decisions around land use that we were and realized we got to value this differently. And when carbon came around in the mid '90s, when I first got involved and said, "Wow, this could be the conduit that we could attract private capital and we could start that journey of putting a price on what is largely been viewed as free."
So if you look, as I told the audience a few minutes ago, if you look at the Catskills and the fact that New York City invested to protect that watershed so that we have clean drinking water here in New York City, that investment is critical. And they were looking at an alternative where they were going to invest in concrete and water treatment facilities that would've been infinitely bigger.
But the fact that we invested in that ecosystem and planted trees and protected trees that were existing creates that perpetual supply of water. And so when we look at river system approaches, which is what we've developed with GreenTrees, it's about carbon. But it's also about water, it's also about biodiversity and it's also about people. We have 600 different landowners ranging from seven acres to 3,500 acres. They're school teachers, they're truck drivers, some of them are famous, some of them are not, but they're all looking at how they can actually generate new and diversified incomes on their land because their land is their portfolio. Whereas, people that are managing their retirements and are in stocks and bonds and they diversify, land owners diversify on their landscape. And what we're trying to do is give them more tools to do that.
Josh King:
Chandler you attended Centre College, the stage for the memorable Joe Biden, Paul Ryan presidential debates in 2012. Want to listen to a little bit of that?
Speaker 9:
You can cut tax rates by 20% and still preserve these important preferences for middle class taxpayers.
Joe Biden:
Not mathematically possible.
Paul Ryan:
It is mathematically possible. It's been done before, it's precisely what we're proposing.
Joe Biden:
It has never been done before.
Speaker 9:
It's been done a couple of times, actually.
Joe Biden:
It has never been-
Speaker 9:
Jack Kennedy lowered tax rates, increased growth. Ronald Reagan-
Joe Biden:
Oh, now you're Jack Kennedy.
Speaker 9:
Ronald Reagan.
Josh King:
That's Centre College. And perhaps neither Biden nor Ryan is Jack Kennedy. But Biden's climate goals have been described as this generation's moonshot. What drew you to this smallest school in the smallest town as the debate coverage described center?
Chandler Van Voorhis:
I didn't want a big university experience. I wanted something that had really roots to it. I wanted that smaller school feel. My father was head of Chatham Hall, which is a girls prep school. So I really understood the value of private education. And I understood the value of the right size. And to me, Center, and there was a particular teacher at Chatham Hall that had gone to Center that really turned me onto it. And I liked also that Kentucky is an interesting state. It's got some Eastern influence and it's also got Midwestern influence. And it's a really interesting mix. And it's obviously a very beautiful state. They've got great horses and fine bourbon.
Josh King:
Excellent bourbon, to be sure. And after graduating Center, you became president of the Alliance for Environmental Education, but soon your attention turned from education to the business of environmentalism. What was the idea behind GreenWave, and how did that platform grow?
Chandler Van Voorhis:
So much of what goes on in the environmental world is the sky's falling and bad news sell. But what we wanted to know is what are people doing to solve problems? In the environment, how is business innovating in solving these issues? And that quest to find out who is doing what and how we're moving. I don't want to know that the sky's going to fall at two o'clock tomorrow, I want to know who's doing what to solve it. And we found some amazing stories. We found stories where people were innovating around new technologies. We had economists on, like a Herman Daly and Bill McDonough from a design guy. Bill McDonough is one of the more interesting guys out there. And I had the fortune of having dinner with him last year.
His premise was this, is that we're all designers. And what we need to do is design the concept of waste and pollution out of existence. If you look at the fact that for every one pound of product in the United States that we generate, there's 33 pounds of waste in it. Think about that. The dynamic efficiency of arguably the greatest economy in the history of the world is 3%. What if it's six? What if it's nine? What does that world start to look like? And so as we start to look at this notion, and if you can design the concept of waste and pollution out of existence, then business can move faster. There's nothing to regulate. And so we started looking at things like that.
Josh King:
The same year you started GreenWave, you began working with carbon credits. And what did you first learn about natural capital and the advanced carbon restored ecosystem, or A-C-R-E, or acre?
Chandler Van Voorhis:
So that was a concept that my father and Carey, when we founded our company, really embedded from the beginning. We said, we've got to put a unitization structure around this. We don't know how to price water right now. We're learning how to price carbon. So think of it as a REIT. I own a REIT and in that REIT, all of a sudden Starbucks locates. Wow, value of that REIT goes up. Apple comes in, goes even further. And what we wanted to do is put an instrumentation around the land and then through the discovery process of the natural capital, we would start to price carbon and water and water storage and water quality and blue carbon, and conservation easements, and species, and all kinds of things. And we're starting to do that now. We are moving so beyond carbon right now. Even in GreenTrees, in our operations, we're doing some interesting things in nutrient mitigation and living shorelines and conservation easements that are really pushing the next evolution of this market.
Josh King:
So real world example, one of these 600 landowners, what's the baseline of evaluation and how do you enhance it through the work that you might do?
Chandler Van Voorhis:
I'll use an example in South Carolina, we're working on. I'll actually use two examples. One in South Carolina, one on the Eastern shore of Maryland. Eastern shore of Maryland, we have a client where we're doing what's called improved force management. So we're changing the management of existing force. We're doing a wetland and stream mitigation project. There's a solar project that we're not involved in the solar, but there's another developer in that putting a conservation easement on it. So think of all of these things as tools and a toolbox. And so instead of cropping and timbering, we're adding carbon, wetland streams, nutrients, conservation easements, biodiversity. In South Carolina, we're doing something very similar, but we're doing longleaf restoration, hardwood reforestation, IFM, a conservation easement, a wetland and stream mitigation. And I had the good fortune of working with Norfolk Southern and their tremendous team.
And they have a property also just west of Charleston, South Carolina, and we've done a tremendous amount of things there. They've done a wetland mitigation bank, they've done a carbon project. They're now doing five and a half miles of stream mitigation. They have a species bank for red-cockaded woodpeckers, highest amount on private lands in the country. And over time, they'll generate way more income than the value of that land. Again, this is 30 minutes from Charleston, South Carolina, a really fast growing market right now. So these markets can be very lucrative for land owners. And it's all about putting tools on the table for them. Some are going to pick up the hammer and the wrench, and some are going to pick up all the tools.
Josh King:
We're recording this conversation, Chandler, at the New York Stock Exchange, which is just hoping to launch natural asset companies soon. But you write in a Medium article that the idea that land had value really doesn't stem from what you and your dad were doing recently, but all the way back to the 1600s. Is there a fundamental difference on how we understand the value of nature or did it just take four centuries to have the ability to price it efficiently the way you guys have done?
Chandler Van Voorhis:
So William Petty back in 1600s really revolutionized this when he said, "We need to treat land as capital and to release its value requires labor." What we would argue today in this industry is that we need to widen our lens. We need to see the value that trees are providing. We need to incorporate that into the capitalistic order. And what's going on with the natural asset companies is an example of the evolution of this and how we're using tools from other parts of the capitalistic order and applying it into nature and pulling it in and embracing it. So I think we're really at the beginning of capitalism 2.0.
Josh King:
As we head into the break, recently last week tonight with John Oliver, investigated carbon offsets and set up their own project. Let's take a quick lesson.
John Oliver:
The bottom line is we have an offset system that places profits over science and the rules regulating it are just far too lax. And the reason I know that is, remember when I said five minutes ago, that I could set up a carbon registry? You already knew where this was heading, right? You knew if they had a loophole where I could set up a registry, establish whatever standards I wanted and start listing projects that I was going right through that loophole. Right? You knew that was going to happen. Well, I'm glad to say that you were correct. We set up Oliver's Offsets Carbon registry and I'm thrilled to announce an exciting new project that meets our exact standard. So please come with me. As you're about to see, we have trees in our studio now, trees that you can help protect while also offsetting your personal carbon footprints.
Josh King:
Chandler, one of the registries that John Oliver attacked was the American Carbon Registry that made GreenTrees its first approved forestry project. Did you see the ACR response? And do you have any thoughts on how the media is misrepresenting the work in the space?
Chandler Van Voorhis:
Well, this gets to why we need an a and plus mindset. What is going on is there's a number of folks that have been out there that are really trying to promote one solution against another one. And when in reality science is saying, we need both. Yeah, so I saw ACR's response. Unfortunately, I saw the John Oliver because I thought that there was a lot, obviously that's wrong with that. The standards that we go through and these standards, these registries just don't come out of thin air. They go through a peer review process. They go through a public consultation process. ACR went through the CORSIA market, which is the airline market. And it was the only registry that went through with no exclusions. So when we actually produce a credit, there's four levels of assurance that go. Takes nine to 11 months to go through this process.
I like to tell folks over the last 10 years, we've spent seven years in a state of audit and three years preparing for one. So we're always, it's around the clock operation. But what we do is we put the lands through a QA/QC process. We're looking at everything from the spacial to the documentation. We then get an approved verifier. Now these verifiers aren't John Oliver. These verifiers are people that have accreditation, ANSI ISO and accreditations. And they are approved by the various registries. Those registries give us the stable to pick from. We pick and then we have to rotate every so often. And they'll open up that meeting. They'll go through that nine month process. And at the end of the nine month process, the lead verifier goes through a internal peer review process and then it goes to ACR. And so that process goes through very significant levels of detail and scrutiny.
The last question in our last audit was why we were conservative on our GIS by 1.9 acres out of 133,572 acres. That's the level of detail that goes on. So yes it does get misrepresented. It's easy too because people are looking at offsets as well, it's delaying the transition to this renewable world. We thought about carbon and offsets back 25 years ago as a bridge strategy. But we kicked the can so long for 25 years. And then along the way, we realized nature's not an offset, nature's a technology. There's a genius to nature. And what we've got to do is employ that.
And so when I sat down with, this is at the end of kind of the Waxman-Markey Bill and the Obama administration, the late Jim Rogers, who was chairman and CEO of Duke Energy. And he said something that's always stuck with me. He said, "There's two forms of IP in this world. There's technological IP and then there's how you get to scale. And most technologies fail on how you get to scale. The thing with nature is she is scale. The question is how do we organize it?" And when we can take that approach of how we organize it, and we're looking at nature as a technology to repair the past and recalibrate, it's got to work in tandem with renewables, not as a circular firing squad, which is where John Oliver went.
Josh King:
After the break, Chandler Van Voorhis, the co-founder and managing partner of Greentree and I are going to discuss what makes a high quality carbon credit and how ICE plans to host two carbon credit auctions for GreenTrees in the fourth quarter of 2022. That's all coming up right after this.
Announcer:
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Speaker 16:
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Josh King:
Welcome back. Before the break, I was talking to GreenTrees co-founder and managing partner Chandler Van Voorhis, about his career and the growth of carbon offsets and a little bit of John Oliver. Chandler, in 2003, you started C21, the parent of ACRE Investments in GreenTrees. What was the business opportunity that you and your business partner, Carey Crane saw in the market at that moment?
Chandler Van Voorhis:
Well, we had looked at carbon as I was telling the audience here at the New York Stock Exchange, we'd looked at that carbon in 1996. And back then there was a consortium of 40 utilities in the Department of Energy, this was back in the Clinton administration, looking at carbon sequestration. And the way it was being done was people were buying land, reforesting it, selling the underlying land to fish and wildlife service and then keeping the carbon stream.
Said this isn't scalable enough. We need to do something that works with the private land and are not go out and buy all the land. And so that was the premise behind C2I, I was to go out and actually create a public private partnership that drove the scalability because in the US south, 90 plus percent of the land is privately owned. So you got to work with the private land under. Go out west, the biggest land owner is the US government. 68% of all lands in the Western part of the United States is zoned by the US government. But down south, which is arguably the best tree growing region of this country, we got to work with private land owners. And so what we did is build an aggregated model using that approach. And so we started in 2003 with the idea of developing this market.
Josh King:
Developing that market in particular, the south. Your reforestation efforts, Chandler, are focused on a less than obvious place. Let's take a listen.
Speaker 17:
America's secret jewel. A wilderness so rare it ranks among the most diverse places on the earth. It's rivers and creeks are home to more species of aquatic creatures than any comparable area in the world. It's forests boasts more kinds of plants than any in North America. It's not in Yellowstone or Yosemite. It's in the last place you'd expect it to be, the heart of the American South.
Josh King:
Why'd you focus on Mississippi Delta?
Chandler Van Voorhis:
It's an amazing conservation area. It is America's Amazon. And for all those reasons stated in that clip, it is a place that drains 41% of the United States. It is a major commercial artery. A little known fact about the Mississippi Alluvial is that there's more navigable waterways in that river basin than the rest of the world, combined. You take the amazing soils that are there and the access to port infrastructure. We over cleared our lands. We have a hypoxia zone, which is a dead zone, essentially at the Gulf of Mexico. It's the size of the State of New Jersey. And the reason we have that? We over cleared our forest, we're over fertilizing our farm fields. And that nitrogen and phosphorus is going down the conveyor belt called the Mississippi River and it's choking the oxygen out of the water. So the fishermen have to go out farther than the State of New Jersey to catch their livelihood.
So everything is linked to each other. And what we've been looking at is how do you take a river system approach and heal parts of that land? Instead of farming all the way up to a stream's edge, maybe we'll put in a 100 foot buffer or 150 foot buffer of trees around that. Farm smarter, not harder. Diversify your cash flows, heal the land, create biodiversity habitat. So another interesting fact about that area is it also has six of the 10 most poorest counties in the United States. It's a flyway for 60% of all bird species on the North American continent. It's a wintering ground for all the Neotropical songbirds coming up from Central America. It is a vital area from a conservation. So we said, we've got to solve this issue. And obviously, things grow well down there. So it's an area where good tree growth. But we're also going to get a lot of biodiversity, water quality, water quantity, and just social economic benefit from this.
Josh King:
Can a hypoxia zone the size of the State of New Jersey be reclaimed, be restored?
Chandler Van Voorhis:
It can, over time because what you've got to do is put in the filters, the natural filters, which are trees and shrubs and grasses. Any type of vegetation can help do that. Trees do it really well because it also shades the waterway as well. And it lowers the temperature of that water. But yeah, we can use our natural infrastructure and we can target it into areas to heal. We're now looking at Virginia, for example. The top two thirds of the State of Virginia has about 650,000 acres that are within 300 feet of a perennial stream that flows in the Chesapeake Bay, which is arguably one of the most valuable estuaries in the world. So if we go out and reline, those perennial streams that are flowing into that bay, we fundamentally changed the water quality going into that bay. And we're using carbon to help do that.
Josh King:
Talking about carbon Chandler, we went into the break talking about the misconceptions about nature based carbon credits. But there are varying values to an offset. What makes a high quality carbon credit?
Chandler Van Voorhis:
Well, it has to be one of the top standards. These standards are taking a lot of licks. In any growing market, people come in with sharp elbows and they're trying to create their place at the table. But American Carbon Registry has been in this for 26 years as well. They started out as environmental resource trust. Wiley Barbour, who was the executive director at the time, stood on the podium with Al Gore, received Nobel prize. And then Winrock International, Winthrop Rockefeller Foundation bought ERT and rebranded American Carbon Registry. They go through tremendous amount of rigor around the standards that we have to.
So when you get an ACR label and go through that process that I talked about earlier, that is quality. That is bulletproof tested. We have over 10,000 documents that someone is going through. This isn't all publicly available documents. These are things that the verifiers and the registry see. So when you get the John Olivers and the different media people that don't understand this, it's easy for them to poke fun at, maybe not quite understand the nuances of these markets and maybe they want to see a wind and solar world. And that's great, me too. But I also want to see nature enhanced because nature's going to be playing a significant role.
Josh King:
Talking about nature, Chandler, later this year, GreenTrees is partnering with ICE to host a carbon credit auction. ICE offers customers access to the largest and most liquid environmental markets in the world. But what does connecting to that network bring to GreenTrees? And why is it important to use market based solutions to create an asset class for natural capital?
Chandler Van Voorhis:
If we don't put a value or a price and value on nature, then it's always going to be zero. Anything's better than zero. So market based is the way to go. Otherwise, we're relying on your ethic versus my ethic. Price has a way to kind of channel and make people view things differently. You may not agree with that price, but at least it's above zero. So that's first and foremost.
Why we're partnering with ICE? ICE is a major infrastructure player, institutional player in capital markets in all kinds of ways and shapes and forms. And what this market really needs to do is it needs to make its next jump, it's next growth. And what that means is it needs some standardization. It needs traditional market infrastructure and connection. And we look at this auction approach as a way to help really standardize some of this process to educate more of the market around the differences between a reforestation credit and a red credit, and a IFM credit. We are looking at ways to broaden that message to a much wider audience. And also, we're looking at some price discovery around this. Right now, this has been all over the counter and it's not a lot of indexes out there that can start to you can reference and say, that's going to be where we think the price of carbon is. And so what ICE is doing in the future side is another example of something that we think is going to be key to the growth of this market.
Josh King:
I wanted to put a voice to one of the landowners whose land we've been discussing. Let's listen for just a second to Ricky Lowery.
Ricky Lowery:
We're here on our family farm in Yazoo County, Mississippi. The farm has been in the family since pre 1900s. We've had quite a flooding problem. It was a financial burden for us. My son lost his home. There are areas that should not have maybe ever been cleared up for farm because of poor drainage and lower ground.
Josh King:
We've been talking about the kind of estuary that Mississippi Delta is Chandler. But what's the value proposition for everyday landowners, a guy like Ricky, that we just heard from who sometimes I think you guys often refer to as first responders to climate change? And what impact is the introduction of ICE's auction going to have on someone like Ricky?
Chandler Van Voorhis:
It is going to give depth to the market. It's going to give upward price pressure into the market. When I hear Ricky's voice who has since passed away, and Ricky was one of the early champions. I'll tell you a funny story, a minute about that. But carbon is beyond just trying to stave off a 1.5 degree. Carbon is transforming lives and land. It's diversifying the income streams. We just made the largest distribution we've ever made in a single year in our company because of the upward price pressure. And in that for the first time ever is a public school system that we reinforced the land and brought them into the program. And they're going to be getting a carbon check. That's significant. And that's going to go and help the education of that particular county. It's probably a first of its kind.
And then there are stories where grandmothers say, "I'm going to use these carbon proceeds to pay for my grandson's tuition bill." I've got land owners, that carbon check helped me pay my taxes in a particular year. Another one said, "I reinvested it into doing more environmental sustainability practices on my land." So these dollars are meaningful. Yes, they're numbers. And we throw around 500,000 and we talk about price and we talk about all the science behind all this. And all that is very important from a macro level.
But when you get down to the human element and the transformation of that land, and I remember seeing Ricky's land as farm, and I've been back down there even this past year. And so it's amazing forest and see that transformation. And now as the next generation has got that land. And so these relationships that we develop with these families isn't just with the matriarch or the patriarch, it goes into their kids because this is a long-term asset. This is a long-term. So what does ICE mean to this? ICE means we're going to bring a lot of buyers to the table. We are going to create this market and this velocity into it. And all of a sudden, these farmers are going okay, it's not just a one off trade. It's not something where one part of the transaction comes, but the other part doesn't come. They're looking at it, this is a new commodity, a commodity that I can have as much comfort around it as when I grow soybeans, cotton and corn.
Josh King:
Is word choice important in how we talk about the mitigation of climate risk? For example, the industry could change the name of voluntary carbon credits without actually creating new mandates.
Chandler Van Voorhis:
Word choice is always important. We've been in a compliance market for a long time. Now the voluntary market, partly because these companies are coming out with enormous commitments. But word choice is important. Offsets is a term that I wish we'd do away with because it's a misnomer. We're not offsetting anything, we're removing or reducing. And that should be the new lexicon moving forward.
Josh King:
Outside of what Greentrees does, what practices are you most bullish on to achieve net zero and rewire the global energy system?
Chandler Van Voorhis:
I think from a mechanical side of things, where we're headed with some efficiency moves in the transportation, how do we optimize our transportation fleet? And this is something I know quite well because I'm working on it. When you look at the decision a shipper makes to truck something across the United States and if they put that same shipment on rail, they would go from four metric tons of carbon to one metric tons. So if we can optimize our transportation fleet and we can incorporate carbon into the total landed cost model that's going on with the transportation. We can really reduce significance. So I think that there is the opportunity to reduce hundreds of millions of tons just in the United States, by optimizing our transportation network.
Josh King:
As you wrap up our conversation, Chandler, do you have any thoughts about how creating equity for carbon offset provides the ability to bring equality? I mean, especially with native populations. For example, I came across this quote from Garrit Voggesser of the National Wildlife Federation Tribal Land Conservation Program, who said, I'm going to quote him here, "Selling carbon sequestration credits is an opportunity for tribes to restore their homelands and cultural traditions, as well as protect wildlife."
Chandler Van Voorhis:
Again, the carbon is a conduit. It's just how the business deal's getting done. But beyond that is that story that you just mentioned, what it means and what we call co-benefits in this. And that may be social economic, it may be cultural in some areas, it may be water quality, it may be biodiversity. The ability to go beyond carbon is really a discussion that some of us in the market are starting to have. It's what can we do next? How do we leverage this? How do we transform lives and land? How do we transform communities? One of the interesting things about carbon is it's rooted in real property. So if you look at what's going on in the growth of the federal government and largely state governments, where they tax the velocity of income versus a county government that taxes the stored wealth in property, well, if carbon's rooted in real property, we have a chance to actually create new income streams into the county level, which also is an important part. And that gets to Indian reservations, which have their own sovereignty issues.
Josh King:
Talking about what we can do next, as we finish up, on the precipice of launching your collaboration with ICE, what are you looking forward to next with GreenTrees and ACRE Investments?
Chandler Van Voorhis:
We are launching because our company, as large of the market share as we have, and as small as we are at the same time, we have been inundated with people around the world saying, how do we do GreenTrees in Tanzania? How do we do it in Costa Rica? How do we do this in the Caribbean? And we realized, wow, our small firm has 130 years of carbon market experience. We owe it to the world. We owe it to other people to give them the same tools that we're giving landowners in the United States.
And so we're building the ACRE IO platform and that platform is really going to digitize the whole process. We're going to help landowners in projects around the world to do all their setup documentation, all their quantification, all their insurance, all the verification process. And it connects into what we're trying to do with ICE here and into the auctions, access to the market and standardization. And so what we want to do is enable the people around the world that are looking to do something very similar to GreenTrees. That's what's next for us is how do we take what we have done over the last 20 some odd years and how do we leverage that, put the foot on the gas and do something monumental? Because ultimately, I want to be sitting here 10 years from now, looking at you and saying when the brass ring presented itself, we responded and we did good.
Josh King:
Enabling people around the world. Chandler come back in 10 years and let's see how you did.
Chandler Van Voorhis:
I look forward to it.
Josh King:
Thanks so much for joining us Inside the ICE House.
Chandler Van Voorhis:
Thank you.
Josh King:
And that's our conversation for this week. Our guest was Chandler Van Voorhis, the co-founder and managing partner of Greentrees. If you like what you heard, please rate us on iTunes so other folks know where to find us. And if you've got a comment or question you'd like one of our experts to tackle on a future show, email us at [email protected] or tweet at us @icehousepodcast. Our show is produced by Jess Tatem and Pete Asch with the production assistance and engineering, Ian Wolff. I'm Josh King, your host, signing off from the Library of the New York Stock Exchange. Thanks for joining us. Talk to you next week.
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