“Confessions of CEOs” is a series on how business owners are changing the service landscape. Today, we’re chatting with Paul Gambill, CEO of Nori, a blockchain that enables people to get paid for carbon dioxide removal. He shares his secrets on tackling climate change while receiving angel investment.
While most solutions today focus on the reduction of carbon emissions, Nori focuses on its complete removal. There are too many greenhouse gases in the atmosphere; the world needs to remove over 1 trillion tonnes to get back to pre-industrial levels. Currently, though, it’s too expensive to remove them. People require compensation to run the type of projects that take out carbon emissions from the atmosphere.
Nori helps fund these endeavors through its centralized marketplace and unlocks the source of carbon dioxide (CO2) removal, namely farmers. These heroes remove carbon, obtain verification through a third-party, then sell the interest in said removed carbon to buyers. Buyers cannot resell the carbon. We’ve developed a methodology that allows us to identify how much carbon is removed, allowing Nori users to observe their impact tangibly.
Back in 2015, I read an article about how climate scientists often suffer from depression because hardly anyone listens to them. I thought to myself that it’d be beneficial if someone addressed carbon removal. Within a year of starting a networking group on climate change, I had met key influencers in the field including Dr. Klaus Lackner (Director of the Center for Negative Carbon Emissions and a professor of sustainable engineering at Arizona State University) and Carbon180 (a non-profit that tackles climate change). I subsequently endeavored to find the perfect co-founders while exploring different business models and ideas on how to tackle emissions.
Why is climate change necessary?
Climate change is real. It’s not getting better any time soon. Unfortunately, people aren’t sufficiently empowered to take action on the issue. We have to drive to get to work, fly to see our family, heat our homes, we have to use energy, and there’s no way around that. We are interested in finding ways to restore the climate in a fiscally responsible way. The key is that people require incentivization to act. The easiest way to view this is an arithmetic problem. We are putting too many greenhouse gasses into the atmosphere and not taking enough out. Carbon removal helps create the necessary balance to roll back the effects of climate change.
Nori offers an entirely different investment asset class for the carbon market that requires significant coordination from farmers to scientists and researchers.
What’s wrong with the current emissions reductions system? How does Nori tackle these problems differently?
In carbon markets today, when a project issues carbon credits, they sell these credits to a broker who sells them to another broker who sells them to investors. That same ton of CO2 trades hands over and over again. That’s not a healthy life cycle. Once someone pays, it should disappear.
When a ton of carbon is sold through Nori, the CO2 is immediately retired. The carbon certificate doesn’t go to someone else; it ends right there. Trade helps build the capital around it, but we don’t want the carbon to be the traded asset. With us, the buyer pays for a ton of CO2 with the token; the token becomes the commodity, not the CO2. The token is just a medium of exchange, so we’re able to get the best of both the situations.
How is Nori maintaining focus on climate change despite receiving external investment?
Nori is a 50-year mission company. We’ve only partnered with organizations that agree with that long-term vision. We can’t allow anything to cause us to deviate from that mission, whether it’s a potential acquisition or taking the company public. Our token incentivizes everyone, from Nori founders to investors to farmers. By aligning everyone’s motivations and incentives, we maximize the odds of reducing carbon.
What is your #1 lesson learned so far as a startup?
Abstract complexity away. As entrepreneurs, we can’t expect everyone to spend as much time digging into details as much as the startup does. Customers just want things to be easier and solve a problem for them.
Who have been your biggest advocates/partners so far?
Our three best partners so far have been COMET-Farm (a platform for quantifying soil carbon), Granular (management software farmers use to track their operating data), and Techstars’ sustainability accelerator. We use COMET to create the new, easy-to-use standard for soil carbon; we’ve been working hand in hand with them for two years. Granular was the first agriculture company to believe in us; we’ve collaborated closely with them on helping their farmers get enrolled in the market. Techstars is just such a wonderfully supportive network and program that I really can’t recommend enough to other startups.
How have you gained investors’ trust?
Our amazing team. Our co-founders are world-class, and it’s not easy to find such incredible leaders. Co-founders need to agree on some fundamental things; this includes motivations behind the company and finding a balance between the mission and the economics of staying profitable. Having a sizeable venture-backed company may require you to give up some control; starting a smaller business may allow you to maintain control with less profitability. I recommend the book The Founder’s Dilemmas by Noam Wasserman to better anticipate and avoid the typical startup pitfalls.
When all is said and done, what does Nori hope to achieve?
Restore Earth to pre-industrial carbon levels. A clean world is a happy one.
Nori is a preferred partner on Beaze.