This infrastructure is not being built in San Francisco or New York city or Philadelphia. It's being built in Illinois, Indiana, Nevada, places where rural communities are really hurting from an economic standpoint. What if we gave those rural communities an opportunity to invest alongside the capital markets in these infrastructure projects so that they too could benefit from the financial return? I think that would make them much more interested in partnering Good morning, good afternoon, or good evening, wherever you are in the world. This is the Climate Confident podcast, the number one podcast showcasing best practices in climate emission reductions and removals. And I'm your host, Tom Raftery. Don't forget to click follow on this podcast in your podcast app of choice to be sure you don't miss any episodes. Hi, everyone. Welcome to episode 180 of the climate confident podcast. My name is Tom Raftery. And before we kick off today's show, I want to take a moment to express my gratitude to all of our amazing supporters. Your support has been instrumental in keeping this podcast going, and I'm really grateful for each and every one of you. If you're not already supporter, I'd like to encourage you to consider joining our community of like-minded individuals who are passionate about climate. Supporting the podcast is easy and affordable with options starting as low as just three euros or dollars a month. That's less than the cost of a cup of coffee. And your support will make a huge difference in keeping the show going strong. To become a supporter you simply click on the support link in the show notes of this, or any episode or visit tiny url.com/climate pod. In today's episode, I'll be talking to Larry seltzer from the climate fund. And in upcoming weeks, I'll be talking to Elizabeth Thompson from Visions 2030, Gagan Dhillon from Synop, Shravan Kumar from Gramener. And Devdut and Xavi from Mittilabs. So some really good episodes coming up. Don't touch that dial. But as I said, today's guest is Larry from the conservation fund. Larry. Welcome to the podcast. Would you like to introduce yourself? Certainly. And thank you for having me. My name is Larry Selzer. I'm the president and CEO of The Conservation Fund, America's leader in buying land for conservation and balancing economic and environmental outcomes. Okay, fantastic. And Larry, how did you get into this space? I've been passionate about the environment ever since I was a little kid. I grew up on the shore in New England, and we were either fishing or catching bait to go fishing for most of my childhood. I always wanted to be a marine biologist. And when I graduated from college, I was lucky enough to get to be a marine biologist. And that was at a time when the president, Ronald Reagan at the time, had just proposed opening the outer continental shelf for oil and gas exploration on the east coast. And the states didn't like that idea. They were afraid that an oil spill would hurt commercial fishing and tourism. They filed a lawsuit to protect the marine mammals and seabirds and sea turtles that were found off the coast. And I was deeply involved in collecting the data to understand those populations and think about how they would be affected by oil and gas exploration. What I found over the next seven years of being a marine biologist is that the decisions, even though everyone said they wanted to make their decisions based on the best available science, the decisions were largely made based on politics or money. And I came to understand that while I wasn't that interested in the politics, I knew nothing about money and how it really works in our system. And so instead of pursuing a PhD in science, I went to graduate school to learn about money. And when I was in business school, I met the fellow who had just founded The Conservation Fund, a true American hero, who was the first person to bring business and environment together. And I've been here now for 34 years. It has been just magical. Fantastic. And can you explain for people who are unfamiliar exactly what it is the Conservation Fund does? Our primary function is to buy land for conservation. And we work on behalf of public agencies at the federal, state, and local level, all across the country, all 50 states. And we buy important lands that the agencies have targeted for wildlife, for recreation, for cultural and historical importance. And we step in on their behalf, we acquire these lands, and then we transfer them to public ownership when the money is ready. In addition, we have a unique charter and that charter is based on both conservation and sustainable economic development and so working at the interface of business and environment, trying to balance economic and environmental objectives is where we like to play. Land is key to all of that. Land is critical for ecological health. But it's also critical for economic vitality. And so working on land puts us squarely at that interface and that's what we pursue. Okay, and The Conservation Fund is renowned for pioneering innovative financing partnerships. Can you elaborate on how those models work and maybe share a success story that illustrates their impact? One of the great challenges that we face is that there's never enough capital available when important lands come on the market. And keep in mind, we are competing against development interests, non conservation interests, and so we have to be able to move efficiently, effectively, we have to be nimble and flexible, all of the things that capital provides. And so we are always in search of new forms of conservation capital that will allow us to scale our mission. Interestingly nonprofits are not known for tapping the capital markets and using capital in the way that the private sector does every day. And yet in 2019, we decided to do just that. And we issued the very first green bond for conservation. It was a 150 million, 10 year taxable note. We used Goldman Sachs as our underwriter. It was, enormously successful in the marketplace. We were more than three and a half times over subscribed and it allowed us to accelerate our mission in a unique way, tapping into the tools of the marketplace to accelerate our conservation outcomes. Fantastic. And in today's world where we're constantly seeking sustainable solutions, what role do public private partnerships play in advancing conservation goals? Well, let me give you one great example. One of the biggest land conservation challenges in the country today is the loss of large, intact, working forests. And by working forests, I mean forests that are still being harvested. They're still on the tax rolls, so they support the tax base and the jobs in rural communities and they ensure rural vitality, which is critically important in a country the size of the United States, where we seem to be ever more divided between rural and urban centers. About 25 years ago, the forest products industry went through a major restructuring and land that had been held for over a century by the large vertically integrated pulp and paper companies came on the market. In all, over 90 million acres of land was sold. It was the largest private transfer of land in the history of the United States. It was like a tidal wave and the conservation community was totally unprepared for that scale of disinvestment. And almost none of those lands were protected. Today, we still lose about a million acres a year of these intact working forests. And keep in mind, these are not just any lands. These are the lands that provide us with clean air to breathe, clean water to drink, opportunities for recreation. And they, they support more than 2 million jobs. And these are jobs that can't be exported overseas. These lands are part of the essential infrastructure of the country. And we decided to step into that breach and, and figure out a new solution to the loss of our intact working forests. And 12 years ago, we launched a brand new model that had never existed before where we could aggregate capital the same way that a private equity firm aggregates capital. We would use that money to acquire forests when they come on the market, and they're almost all sold by investment banks at auctions, so you have to be ready and you have to have your money at the time. We had to build an operating company so that if we were the successful bidders, we could continue to manage these lands in a sustainable fashion, but keep the jobs and the tax base intact. And then we had to figure out how we could recover our capital investments so that we could roll it into the next forest when it came on the market. And that's just what we've done. We've built a business called The Working Forest Fund. We've deployed over a billion dollars. We just announced last week that we acquired our millionth acre of forest. In fact, as a nonprofit organization we're one of the largest timber operators in the United States, which is a remarkable statement given the fact that people don't view nonprofits as generally being up to the task of running businesses, but we believe we're in the business of conservation. And this is a very successful, financially regenerative model that allows us to roll capital from one project to the next. And we've targeted 5 million acres of the remaining forest land in the country because that's what the studies show is of the highest conservation value. It can still be managed to provide the economic vitality that rural communities need and the products that all Americans desire, but these are lands that really provide the greatest conservation benefits. Fantastic. And on the intro call or the prep call that we had, you mentioned that the environmental movement needs to shift from saying no to saying yes to effectively respond to climate change. Can, can you expand on this idea and provide examples of how that shift can be implemented? Let me give you a little history as to why I made that statement about shifting from no to yes. And then I'll give you a specific example, which has to do with addressing climate change. The environmental movement is about 120 years old now in this country. And it really began when Teddy Roosevelt was president at the turn of the 20th century. And at the time there was, there was no organized framework for conserving land, but industry was damaging the landscapes, particularly out West in, in significant ways, harvesting all of the forests, mining for silver and gold. Roosevelt was dismayed by all this. And he took action. He was a man of action and he created the National Forest service, the the U. S. Fish and Wildlife Service. He greatly expanded the National Park Service. And today that network of protected lands, frankly, is the envy of the rest of the world. That lasted for about 50 years until after World War II, when the country began to industrialize in a very accelerated way. And we had other problems, mostly industrial pollution problems. Rivers ran different colors depending on what dye was being used. If you got in your car in Pittsburgh, at the end of the day, you had to turn your windshield wipers on to clear the soot. And so a whole new movement emerged that was about stopping pollution. It was about stopping bad things from happening. And for the next 50 years, the environmental movement grew up in that mindset. And frankly, we perfected the art of stopping things. We perfected the art of saying no, but we developed almost no capacity to say yes. And I think now is a pivotal moment for the environmental movement to figure out how to get to yes. And let's look at climate change as a great example, an existential threat, I think, for the planet, but certainly a pivotal moment for the environmental movement. If you go around and ask almost every environmental organization in the country, are they all in to address climate change? I think you'll get a resounding, positive response. They'll say yes to that. And yet, we as a movement, fight almost every project that would address climate change in the country today. Think about it. For 170 years our nation's energy policy was buried deep underground, fueled by things that happened 250 million years ago. In the future, our nation's energy policy is going to be driven by things that happen on land, things like wind and solar. And the transmission capacity to bring that renewable energy to the grid. The Inflation Reduction Act contemplates nearly a million miles of new or upgraded transmission capacity. 65,000 miles of new pipeline for carbon capture and storage so that carbon dioxide can be injected underground. The scale of the infrastructure that's going to be needed to address climate change is mind boggling. Think about the last great infrastructure project in the country. It was completed in 1956. Eisenhower was president. We didn't have a Clean Water Act. We didn't have a Clean Air Act. We didn't have a National Environmental Policy Act. It was called the Interstate Highway System, and that totaled 46,000 miles. Compare that to a million miles of transmission capacity. So the infrastructure is just mind boggling and real will require an entirely different set of conditions to actually get built. Right now, we have outdated laws. We have an inefficient permitting system. We have NIMBYism or not in my backyard syndrome. It's rampant. And certainly those provide hurdles to building out the infrastructure we need to address climate change. But one of the impediments to this infrastructure is one you might not have thought of before, and that is the environmental movement. We seem incapable of accepting the fact that building this infrastructure, which we desperately need involves impacting millions of acres of land, and we have to come to terms as a movement with the trade offs that are going to be required. It doesn't mean we accept every project, but it means we must pivot to a position where we are, in fact, fighting for something, rather than just fighting against everything. And to me, I think that's the most important change for the environmental movement. Now, industry is very well funded. The inflation reduction act provides all of the capital we need. What would it take for us to shift from a position of no to a position of yes. I believe it would require us as a nation to link the building of infrastructure to the conservation of resources. And if they were paired, if they were inextricably linked at equal scale with equal urgency, then I think communities and the environmental movement itself would become much more supportive of the infrastructure required. Okay. How do you balance though the tradeoffs between conservation and economic development, particularly in areas where communities rely heavily on natural resources for their livelihoods? So in 1970, a new addition to the U. S. tax code came into existence, and it allowed something that didn't exist previously, which was called a Conservation Easement. And a conservation easement is a permanent deed restriction that travels separately from the land itself. It's held either by a public agency or a nonprofit, but the easement can be structured to allow for continued economic activity. Such as forestry, agriculture, ranching. And so we have an opportunity to think differently about land conservation. It doesn't necessarily have to be a public agency, a government agency that owns and manages lands like a national park. It can be private land. that has a conservation easement attached to it, which means it can't be subdivided, it can't be converted out of forestry, for example, or out of agriculture, and it can't be developed into hotels or shopping centers. But it allows for the continued economic activity that those rural communities or landowners depend upon. That is an opportunity for us to engage private landowners At a scale and in a way that is meaningful for both ecology and economy, and it allows landowners to continue their vital economic activities that provide the goods and services we need and provide the taxes and jobs based job base that rural communities demand, but it protects the public interest values at a scale and then a level of sophistication that I think is equal to the task of matching up with the scale of infrastructure that we need to build to address climate change. Okay. And what do you see as the biggest challenges or opportunities in aligning land conservation efforts with the growing demands for renewable energy infrastructure? Well, as we've talked about just a little bit before, I think the environmental movement needs a bit of a reboot. I think we need to get our heads around what infrastructure is actually needed to address climate change in a meaningful way and then figure out how we design solutions. Right now, we're more focused on fighting projects and that can be important in certain circumstances, but by and large, we need to wrap our minds around what it looks like to be solution oriented, action oriented and to be a little more nimble and a little more flexible in how we define outcomes. The second this is a big country and we have a lot of land and it is entirely possible to design solutions that can accept infrastructure and protect the critical public interest values like endangered species or recreation or cultural and historic sites. And if we come together and engage early in that process, then I think we can find solutions that make sense. Right now industry pursues its path to get permitting and doesn't engage until the lawsuit comes in like a guided missile from the environmental community. And by that time, the terms of engagement have been defined in a way that is unproductive. And I think accepting the fact that we both need to succeed and coming together early and often is probably a much better path Okay, fair. Looking ahead, what are the top priorities for the conservation fund in the next decade? How do you, how do you plan to achieve the ambitious goal of protecting 5 million acres of working forest? Every year in this country, about two and a half billion dollars worth of forest land changes hands. And not all of that is threatened with development. Not all of that has extremely high conservation values, but a significant portion of it does. And so, we have mapped out those forests that we think deserve our attention over the next 10 to 15 years. Our biggest challenge is capital. And these are very large properties. The smallest properties we generally focus on are 10,000 acres. And if you think about the average price of an acre of timberland in this country is about 2,000 an acre. The price tag gets pretty high. The biggest project we've done was well north of $400 million. It was 100, 000 acres in Washington State. And so we have proven our ability to operate at scale and bring in private sector for profit partners in a joint venture model that has never been done before, but our biggest challenge with the forest land is one of capital. And so we are very aggressively exploring new joint ventures, strategic alliances, funding mechanisms that in another circumstance would probably resemble much of what the Wall Street crowd would pursue on a daily basis. We need to bring those tools, that level of sophistication, that ability to move at scale and at pace into the environmental movement. And nonprofits if they add the appropriate capacity are fully capable of, performing in that space. And part of what we're trying to do is prove that it's not only possible, but that it's an exciting place to be. Okay. And with climate change accelerating, how do you see the role of conservation evolving? What kind of innovative strategies are you excited about that can help us build resilience against environmental challenges? There are two really that we're focused on. So if you think about the infrastructure and you think about addressing climate change. There are two things that I think cause people to jam their foot in the door to stop progress on these infrastructures. The first is, if I own a farm or a ranch and you're going to run a pipeline or a transmission line across my farm, I see that tomorrow. I see the injury to my land tomorrow. And yet you're telling me that the benefit is sometime out in the future, something I can't touch and feel. It's called addressing climate change and and so I understand that maybe at an intuitive level, but at an emotional level at a physical level, there's asymmetry in that equation. The injury to my farm is today. The benefit is to some other group of people out into the future. And the second thing is you're telling me that the transmission line that runs across my farm goes for a thousand miles, let's say to bring wind energy from the Midwest to the coasts. And yet the mitigation for that impact on affected resources is 200 acres in some place I don't know. And that doesn't make sense to me. And so one of the things that we're focused on is pulling the benefits of infrastructure forward so that the impacted communities, the people whose land is affected, can see those benefits in the here and now, and they will be in a much better position to address the trade offs. How do they view infrastructure versus benefit, the cost and the reward? And the second thing is to make those benefits equal to the scale of the infrastructure that's going to be built. That is another asymmetry. You can't have a thousand mile transmission line and then tell me that 200 acres of habitat was all it took to account for the affected acres. We need to think in terms of scale. And that's where that tool of a conservation easement becomes absolutely essential. Because if you're thinking about scale, you are by definition addressing private lands, and we want those lands to stay in private ownership and in economic use. And the conservation easement is a, is a perfect tool. So what we're trying to do is reinvent the mitigation, if you will that infrastructure will require and link it to something that is absolutely essential for communities and for the country as a whole. Right now, we have a crisis in biodiversity. Never before have we been losing so many species so fast. In fact, we've lost 3 billion birds in the United States over the last 50 years, primarily due to habitat loss. And this is a crisis that the current administration is trying to pursue through something called 30 by 30. Protect 30 percent of the nation's land by the year 2030 to protect biodiversity. Well, what if we brought that bold vision of land protection, of land conservation, together with the needed vision of infrastructure development to address climate change? Then I think we have something that the American people will get behind because they'll see that infrastructure development necessary to address climate change results in protecting the critical lands and waters that we need to protect our wildlife and forests and, and species. And so The Conservation Fund is trying to pioneer that connection at, at scale, at pace, and we're having some great success doing that. But that's a vision that we're going to go to the rest of the country to try and express in a way that people can support. The second is, you have lots of private capital investing in infrastructure and all of the returns, the economic returns of those investments flow outside of the mostly rural communities where the infrastructure will get built. This infrastructure is not being built in San Francisco or New York city or Philadelphia. It's being built in Illinois, Indiana, Nevada, places where rural communities are really hurting from an economic standpoint. What if we gave those rural communities an opportunity to invest alongside the capital markets in these infrastructure projects so that they too could benefit from the financial return? I think that would make them much more interested in partnering. Definitely, definitely. The Conservation Fund employs what are called or what you call climate smart conservation strategies. How do these strategies help communities and ecosystems adapt to the impacts of climate change? First of all, protecting land itself is a climate mitigation strategy, particularly if you're dealing with forest land, agricultural land, intact ecosystems. Secondly, protecting land at scale provides migration corridors that animals need to move. And with climate change, we're going to have a massive south to north migration of species in the United States, as lands in the South become hotter and drier, plants and animals are going to need to migrate north and creating these conservation corridors permanently protected is an adaptation strategy. Importantly, though, we need to think about the economic vitality of rural communities. Now, certainly if you put a wind farm in a community or on my farm, I get a residual of the revenue stream and, and that helps me. But I think that the infrastructure developers need to think differently about community benefits and what role they play in making sure that rural communities have appropriate health care and education, transportation, opportunities and jobs. And these are things that companies, infrastructure developers, for example, have not often thought about. They think about the environmental impact and not the community impact. There's something called a community benefit agreement, and it's becoming more commonplace. As people explore what role companies should play in the future of communities. And The Conservation Fund wants to play a leading role in shaping those so that they are effective and efficient, so that they deliver real value to rural communities in terms of quality of life and economic opportunity, and don't overly burden the companies that are investing infrastructure and need to make a real return. Okay. Left field question. If you could have any celebrity or fictional character as a spokesperson for the conservation fund, who would it be and why? That's a wonderful question. I think if, if if we could have a fictional character. I guess I would think about Tony Stark, and the reason I say that is that I think the scale of the challenges that we face today are beyond anything that we have contemplated in the past, whether it's biodiversity or climate change, water quality, rural economic development, the pace of technological change, and the need to change the way we think about identifying and implementing solutions. There's no character that comes to mind better than Tony Stark at thinking outside the box, bringing people to a new vision of what's possible. And I think that kind of leadership, fictional or otherwise, is desperately needed right now at the political level, in the private sector and frankly in the independent sector, which I am part of. Larry, we're coming towards the end of the podcast now. Is there any question I didn't ask that you wish I had or any aspect of this we haven't touched on that you think it's important for people to think about? Well, following on my great support for Tony Stark as the, as the leader of our new movement, I do have one issue that I think a lot about. And that's the issue of risk. Okay. If you go back to the beginning of the philanthropic movement in this country. Philanthropy emerged to take the risk that government couldn't and the private sector wouldn't. In other words, philanthropy was society's risk capital. It was about trying new things, about experimenting. About putting capital to work in ways that would create new opportunities, new vision, new solutions. And I think over the last hundred years or so, we have strayed from that vision. We have become too risk averse. And right now, the challenges that we face really cry out for getting back to that original space of taking risk of embracing opportunities that may not pay off. We can't be content with protecting the status quo when the status quo is in a state of decline. Saying the status quo works for forests when you're losing a million acres a year. And these are the lands that help us address climate change and provide drinking water for 250 million Americans. That is not a good place to be. We need to take risk. Part of that risk is in partnering with people we have demonized in the past, industry. Part of that risk is in experimenting with new capital raising strategies, which The Conservation Fund is doing every day. And part of that risk is reimagining what nonprofits are capable of. Just like we created an operating company to manage now over a million acres of forest land. These are about taking the risks that the country needs. And I think philanthropy and the nonprofits that they support would really benefit from thinking hard about why they came into existence in the first place and what's going to be needed to get the job done. Okay, great. Fantastic. Larry, if people would like to know more about yourself or any of the things we discussed in the podcast today, where would you have me direct them? Our website is a perfect place to learn more about The Conservation Fund, the work we do, and frankly, our exceptional team that's www. conservationfund. O R G and we would welcome anybody coming to check out what we're doing. And I hope join us in this great mission. Fantastic. Larry, that's been really interesting. Thanks a million for coming in the podcast today. Well, thank you. It's terrific. And I love what you're doing. Okay, we've come to the end of the show. Thanks everyone for listening. If you'd like to know more about the Climate Confident podcast, feel free to drop me an email to tomraftery at outlook. com or message me on LinkedIn or Twitter. If you like the show, please don't forget to click follow on it in your podcast application of choice to get new episodes as soon as they're published. Also, please don't forget to rate and review the podcast. It really does help new people to find the show. Thanks. Catch you all next time.