Interview with Diego Saez-Gil, CEO of Pachama about his company’s work for Microsoft: “We can’t disclose details of the partnership”

In January 2020, Microsoft announced that it “will be carbon negative by 2030”. The news was repeated widely and largely uncritically, although Greenpeace’s Elizabeth Jardim pointed out to BBC News that, “a gaping hole remains unaddressed: Microsoft’s expanding efforts to help fossil fuel companies drill more oil and gas with machine-learning and other AI technologies”.

REDD-Monitor will take a closer look at the gaping holes in Microsoft’s “carbon negative” proposals in a future post. This post looks at a start-up company called Pachama and its deal to provide forest carbon offsets for Microsoft.

On the same day that Microsoft made its climate announcement Pachama tweeted that it was working with Microsoft “on this ambitious goal by helping them support forest conservation and restoration projects validated with satellite and AI”:

On 3 February 2020, Mongabay published an interview with Diego Saez-Gil, founder and CEO of Pachama, under the headline, “Success of Microsoft’s ‘moonshot’ climate pledge hinges on forest conservation”.

According to Mongabay, Pachama will “closely monitor verified carbon offset projects to ensure Microsoft’s investment in the global carbon market is actually achieving forest preservation and emission reductions critical to slowing the rate of climate change”.

Saez-Gil told Mongabay that Microsoft “will soon announce its partnership with Pachama”. But Microsoft has still not made any announcement.

I sent some questions to Microsoft about the partnership with Pachama, but after almost two weeks, the company’s PR firm told me that Microsoft would “like to politely declined to respond on this one”.

REDD-Monitor also sent some questions to Saez-Gil. He thanked me for reaching out. He was keen to chat about “our work and the wider world of climate mitigation and nature conservation”. He added,

“I sincerely appreciate your work of bringing caution and accountability to carbon offsetting schemes. We have one shot at solving climate change and must assure we get it right.”

Which sounds kind of funny to me, given that it’s coming from the CEO of a company that sells carbon offsets. I suggested that rather than chatting with me on the phone, Saez-Gil should just answer my questions.

Here are Saez-Gil’s answers in full, by email. I’ll leave it up to you to decide whether Pachama and Microsoft are being transparent about their carbon offsetting partnership.

REDD-Monitor: Could you please describe what your company does. Where does the name Pachama come from?

Diego Saez-Gil: Pachama harnesses remote sensing (satellite images, drone images, etc) and artificial intelligence to verify and monitor carbon capture by forests. The purpose of the company is to protect our living planet and the mission we’re focused on is to protect and restore the forests to solve climate change.

The name Pachama honors Pacha Mama, the goddess of Mother Earth, revered by the indigenous people of South America (who happen to be my ancestors; I was born in Tucuman, at the north of Argentina and I’m a descendant of the Inca people).

REDD-Monitor: Pachama’s website lists nine forest offset projects, and will sell carbon offsets from these projects. (Currently clicking on the “Buy” button brings up this message: “Coming soon. You’ll soon be able to buy specific projects online. Please leave us your information and we’ll contact you.”) Carbon offsets are advertised on the Pachama website for US$12 in New England and US$3.60 in Brazil. Why is there such a big difference in price? How much of the price goes to Pachama as a commission?

Diego Saez-Gil: Price of carbon credits get set by the project developers. Projects in the US have the ability to sell in the California compliance carbon market and therefore have a higher expectation than projects on other geographies.

REDD-Monitor: How many carbon offsets has your company sold?

Diego Saez-Gil: We can’t disclose that information unfortunately.

REDD-Monitor: The nine forest offset projects already exist, are already selling carbon credits, and are certified under the American Carbon Registry, the Climate Action Reserve, the Verified Carbon Standard, or the Gold Standard. Please describe the services that Pachama provides to these projects.

Diego Saez-Gil: We validate the claims of these projects and are monitoring them via satellite to keep the accountable and give assurance and visibility to all participants in the market about the integrity of the projects.

REDD-Monitor: In its announcement posted on its website on 16 January 2020, about the company being carbon negative by 2030, Microsoft seems to be moving away from “avoided emissions offsets”. A graph of Microsoft’s pathway to carbon negative by 2030 shows offsets being replaced by carbon removal after 2020:

Microsoft states that, “Like most carbon-neutral companies, Microsoft has achieved carbon neutrality primarily by investing in offsets that primarily avoid emissions instead of removing carbon that has already been emitted. That’s why we’re shifting our focus. In short, neutral is not enough to address the world’s needs.”

The nine projects on Pachama’s website are all forest offset projects. The Mongabay article states that Microsoft “will pay forest projection projects at the rate of $15 per ton of carbon stored”. And in your interview with Mongabay, you say that, “They [Microsoft] have a big volume of carbon offsets that they want to purchase, but there aren’t that many projects, right? So hopefully, we can monitor and onboard new projects.”

That seems to be in direct contradiction with what Microsoft wrote on 16 January 2020 about “shifting our focus” away from offsetting. How do you explain this?

Diego Saez-Gil: I can’t speak for Microsoft unfortunately.

REDD-Monitor: What does the partnership between Microsoft and Pachama involve? Is Microsoft paying Pachama, and if so how much, and what for?

Diego Saez-Gil: We can’t disclose details of the partnership other than say that we are helping Microsoft source, validate and monitor forest conservation and restoration projects using our satellite and AI technologies.

REDD-Monitor: Why has Microsoft still not made any public announcement about partnering with Pachama?

Diego Saez-Gil: Again, can’t speak for Microsoft.

REDD-Monitor: According to Ecosystem Marketplace’s “State of the Voluntary Carbon Markets 2019”, the average price for Forestry and Land Use offsets was US$3.4 in 2017, and US$3.2 in 2018. How can you justify selling forest offsets to Microsoft at US$15, almost five times this amount? And US$15 is more than you advertise carbon offsets on Pachama’s website.

Diego Saez-Gil: Today, prices of carbon credits in the voluntary market get determined by the interaction of supply and demand. We don’t set prices, although we do hope to be able to bring more transparency to it.

REDD-Monitor: A Pachama press release dated 22 October 2019, states that “Pachama’s machine learning models have achieved less than 1.5 per cent error with 97.5 per cent confidence at estimating carbon stocks in forests of New England, demonstrating an unprecedented level of accuracy for forest remote sensing.” Could you send me the data to back up this statement?

Diego Saez-Gil: You can find below scientific papers that our lead scientist Elias Ayrey has published on the topic. We hope to publish more papers with new data that we have been collecting and processing soon:

REDD-Monitor: How transparent is Pachama’s monitoring of its offset projects? Will Pachama, for example, make the remote sensing data available to the public? Will monthly reports about each project be publicly available? Could you show me Pachama’s monitoring data for the two REDD projects in Brazil: Manoa REDD+ project, and Jari/Pará REDD+ project?

Diego Saez-Gil: We are still in beta development so we are not sharing publicly yet, but we hope to be able to have some form of public monitoring platform at some point in the near future.

REDD-Monitor: Do Pachama staff visit the projects to carry out field observations? If so, how are these visits organised, and who pays for the visits? How frequent are the visits? Are reports produced following field visits? Are these available to the public? If you don’t visit the projects, how do you anticipate addressing issues such as indigenous peoples’ rights?

Diego Saez-Gil: We have visited some of the projects although most of our focus has been on remote verification and monitoring. Being myself a descendent of indigenous people of South America, indigenous rights is a topic that I care deeply for and we hope to develop ways to assure their absolute consideration in this world.

REDD-Monitor: Pachama has raised US$4.1 million in investor backing. Where did this money come from, and what do you plan spending the money on? Has Pachama published any annual reports or annual accounts? If so, could you please send me copies.

Diego Saez-Gil: We are a private company and don’t release financials publicly. Our investors are individuals and seed stage funds mainly from Silicon Valley.

REDD-Monitor: According to Pachama’s website, the company’s address is 1435 48th Ave, San Francisco. Clicking on the address sends us to 1345, 48th Ave on Google maps. Which is the correct address? Both addresses look like residential buildings. Has Pachama got an office? If so, where?

Diego Saez-Gil: We are startup and most of our team members work remotely so our HQ is still on a residential building.

REDD-Monitor: Where is the company Pachama registered? (I looked on Open Corporates. Is this your company: Pachama LLC, and if so, why did you register the company in Oklahoma?) The terms of use for the Pachama website gives the address 450 Memory Ln, Boulder Creek, CA 94965 – is this the registered address of the company?

Diego Saez-Gil: We are a Delaware C corporation – as most technology companies in the USA – the name of the entity is Pachama Inc.

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