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Pachama: Carbon-credit startup puts a price on trees, market opportunity

Pachama: Carbon-credit startup puts a price on trees, market opportunity

  • Backed by Amazon and a fund led by Bill Gates, Pachama runs a marketplace for forest carbon credits. 
  • Carbon credits are generated when a forest is conserved or restored. 
  • As more companies pledge to reduce or eliminate their emissions, the market for carbon credits is expected to surge. 
  • Researchers challenge the efficacy of carbon credits for curbing deforestation and reducing global emissions.
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In late August, a forest fire, set by lightning and emboldened by climate change, whipped across the Santa Cruz Mountains in California, ultimately burning more than 85,000 acres. 

Diego Saez Gil’s home was among its victims. 

Ironically, it was in that home that Saez Gil dreamt up the idea for his startup, Pachama. Founded in 2018, the company aims to fight climate change — which makes wildfires more common and severe — by protecting forests.

“It is meaningful that now my house is taken by the consequences of climate change, and that those forests will need restoring soon,” Saez Gil, the company’s cofounder, wrote on Medium the day after his home was destroyed. “You can’t make our mission more personal to me now.” 

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Saez Gil’s startup is a tech company, but it’s not your typical Silicon Valley startup.

Pachama sells carbon credits, which represent the carbon dioxide that trees remove from the air. Forests that are protected or restored can generate credits, and companies can buy them to offset their own emissions.

The idea is that, in doing so, businesses can help curb deforestation while reducing their overall climate footprint. 

Though Pachama is just a few years old, it’s won backing from major investors including Bill Gates’ Breakthrough Energy Ventures, Amazon, and tennis

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