Reforestation Spurs a New Economic Model

Monica Silva is known as the mother of the seedlings. She wakes up most mornings at 4 a.m. to catch the bus to Turmalina Farm to care for what she calls “the children.”

“When the seedlings get here, they are like little babies. They’ve endured long trips, and many arrive damaged. It’s my job to help prepare them to be planted,” she said.

Monica Silva waters seedlings at Turmalina Farm. (Photo Credit Nahal Mottaghian)

Ms. Silva works at Turmalina’s nursery in Mãe do Rio, Para in Brazil, watering and tending to plants for Mombak, a Brazilian startup supported by The Rockefeller Foundation and focused on generating high-quality carbon credits through reforestation of the Amazon.

Peter Fernendez and Gabriel Silva co-founded Mombak with the vision of creating the world’s largest, high-quality carbon removal platform by purchasing or partnering with landowners to transition land use from cattle pasture to native reforestation.

“It is an honor to be a part of something that is not just business,” said Ms. Silva. “It’s a part of the future of our children and our grandchildren.”

The Mombak Model

Brazil is home to 60 percent of the Amazon Basin which produces 20 percent of the world’s oxygen and 16 percent of its freshwater. But over the last 50 years, Brazil’s Amazon has lost about a fifth of its forest cover to deforestation.

Global deforestation emits 8.8 billion tons of carbon annually on average, damaging not only ecosystems but the global economy, which relies on goods and services generated by nature such as food, raw materials, pollination, and water filtration. The World Bank estimates that by 2030, the global economy could suffer $2.7 trillion in losses due to the collapse of certain nature-based services.

In the Para region of Brazil, where cattle ranching is the main revenue stream for farmers, Mombak has created a model that makes reforestation profitable. The company partners with farmers willing to sell or lease a portion of their land. Mombak then supplies the seedlings, employees, and land managers necessary for reforestation.

Through data analysis of land parcels, Mombak calculates the carbon removal potential of each project and sells high-quality carbon reforestation credits to companies that want to offset their emissions. Farmers receive a percentage of the revenue from those sales. This creates a new and passive revenue stream for farmers that can be three to five times more profitable than cattle ranching.

“We are taking land that would have been cattle pasture forever, land that would not have been turned into forest, simply because there’s no economic benefit. We’re turning it into native forest for the purposes of carbon capture, and funding it solely through the sale of high-quality carbon removal credits,” said Mr. Silva, Mombak’s Chief Financial Officer.

The History of Cattle Ranching in Brazil

Large-scale deforestation of the Brazilian Amazon began in the 1960s when citizens were incentivized to use Amazonian land for profit. About 70 percent of that deforested land became cattle pasture to support Brazil’s beef industry. Brazil is one of the world’s largest beef exporter.

“The mindset back then was to create economic value by removing the forest and doing something with the land,” Mr. Silva said. “Today we are left with mostly degraded pasture with only a few cattle on it.”

In 1965, the Brazilian government enacted a forest code requiring Amazon landowners to preserve at least 50 percent of their land as protected rainforest or allocated for reforestation.

But historically, compliance was weak due to a lack of economic benefits for reforestation. Mombak creates a path for farmers to achieve environmental compliance while building revenue from a new market, diversifying their income beyond cattle ranching.

Karine Schmid and her father Sadir discuss the impact of partnering with Mombak on their revenue stream. (Photo Credit Nahal Mottaghian)

“We are facing a big problem with cattle pricing,” said Sadir Schmid, a farmer who partnered with Mombak to lease half of his land for reforestation. “Right now, we’re working just to maintain our herd because cattle prices have dropped significantly. We are practically paying to work.”

Schmid owns a 600-hectare (1,485-acre) cattle ranch. Mombak is planting 400,000 trees on the land it is leasing. Schmid was considering retiring before he met with Mombak’s representatives.

“I was really tired from maintaining the pastures,” he said. “It was a lot of work, and I didn’t have the resources to sustain it. At first, I was a bit skeptical but after doing some research and talking with Mombak’s team, I felt more comfortable.”

Schmid still maintains his cattle ranch on half the land while also receiving a passive income from the now-reforested land managed by Mombak, providing generational wealth creation and keeping him in compliance with environmental regulations.

“We can already see the progress,” said his daughter Karine. “The trees are growing and wildlife is returning. It feels like we are creating something meaningful for the future.”