Mike Townsend: Today's conversationis with Merit Valdsalu. She is the CEO and co-founder of Single.Earth.Single.Earth is a nature backed economy to save the world. They're issuingtokens to landowners to create a incentive structure for owning land withoutdestroying it for logging or farming or other purposes, they have Amazonrainforest.

Mike Townsend: In their economy, theyhave rainforest or they have forest in Estonia and other parts of Europe. Theyhire our team of about 70 people. They've raised about 8 million in VC funding.And we talked about specifically how they're doing what they're doing, what isthe tokens or the incentives for creating a sustainable regenerative forest.

Mike Townsend: Token structure. Wetalked about nuclear and other sustainable energy options. The trajectory ofEurope in relationship to the war currently going on in Russia, energy needsthat are happening there and much more. So if you enjoy this conversation,please give us a thumbs up or a share deeply appreciated.

Mike Townsend: If you havesuggestions for other guests, please send those over as well. Here is Merit Valdsalu.  

Mike Townsend: All right, Merit.Well, I'm excited to be chatting with you. I love what you're working on.Single.Earth is an initiative. You started heading us down a direction ofintegrating cryptocurrency, token economics into the world of broadly likeclimate change. What can you, let's start off by, can you tell me what theproject is doing today and then what you guys hope to accomplish in the future?

Merit Valdsalu: Hi. Yeah. First ofall, thanks so much for inviting me here. Very excited to be here, to tell youmore about what we do. So what we do at Single.Earth is while we create theworld's first nature backed currency, which is called the Merit. But thecurrency is not directly backed by nature as an asset.

Merit Valdsalu: It's actually mintedbased on the work nature. So nature provides us with a lot of different what'scalled the ecosystem services. So it does a lot of good things that makebasically this planets habitable for all of us. So providing us with fresh airand water and the food weed, but also doing things like removing CO2 from theatmosphere and holding biodiversity.

Merit Valdsalu: And these are all thethings that nature. That we basically use to meet tokens based on, so these arethe algorithms that we use to meet these tokens. We started doing that becausewe understood that. Well, although we all depend on all these ecosystemservices none of these services have ever had a price and nobody has ever paidfor these services.

Merit Valdsalu: And what we have beenpaying for instead is for destroying all of these services. So the only way hownature has been monetized until today has been as raw material. But weunderstood that if we want to give or assign nature value outside of its likephysical properties that we can see and feel in the nature, we actually need tosomehow bring that to the digital world, to create the value or represent thevalue that nature brings to the world besides the raw material properties.

Merit Valdsalu: So that was kind ofhow it all started. It obviously started from a very small problem that westarted solving for us. So here in Estonia, a lot of well, basically half ofEstonia is covered with forests. So it's a very small country, but we have alot of forest here. And at some point we started seeing more and more of theseforests being cut down.

Merit Valdsalu: And it caused a lot ofdebate in the society. We're cutting down too much of our old forests and, andis it destroying the biodiversity in the country and so on and so on. And thenat some point we understood that. Well, we need to figure out a systematic way,how to tackle that. Just saying to land owners, Please to cut down your forest.

Merit Valdsalu: Doesn't really workbecause well, they have made a financial investment. They have purchased uspurchased forest, for example, they want to receive some money in return atsome point for that. So we understood that we need to create new businessmodels for landowner to create these incentives, to keep the forest growing.

Merit Valdsalu: And obviously we quitesoon realized that it's not just forest and it's not just Estonia. It'sactually all kinds of land use all over the world that is currently only basedon monetizing nature as raw material. Whereas nature is doing so much more thathasn't had a price yet. And obviously this is where web three and all thiscrypto space comes in because this is allowing us to assign very easily valueto things that haven't had financial value.

Mike Townsend: So. . Hmm. And wasthis a concept that you came up with and you're sitting around thinking, okay,they're cutting down these forests. Like, what was the set of the logicalarguments that you sorta went through in your head? Because I would certainlythink that the means of collecting the data, motivating people to get paid inthese tokens.

Mike Townsend: Like there's a lot of,you know, humps to overcome which we can talk about in a minute, but early onwas. Was this a concept that you had iterated through a few times? Or was this justsomething that kind of hit you?  

Merit Valdsalu: No, I think it took uslike two years to come up with the entire concept because at first, well, we wedidn't start off as a crypto company.

Merit Valdsalu: So we started actuallyas a, as a startup. So we actually went to a hackathon. It was called thefuture of wood. So we started finding new ways, how to value wood and all ofthat. At the very beginning, we knew that if we want to assign value to nature,that hasn't been. The blockchain makes a lot of sense.

Merit Valdsalu: But at that time weactually thought of this as a way just to you know, have this data used assomehow as a database, basically, so that it's very traceable and it's easy touse. It's scalable and all of that. But at that point it was actually theprevious crypto winter back then we didn't want to even say that we are usingblockchain out loud.

Merit Valdsalu: So we just started asa very simple. Concept, we can use tokens as a way, how to account for theecosystem services that nature does. And at the very beginning, we thought thatwe were just gonna use it as a way, how basically in a similar way, how todayall these carbon credit systems work, like we just Quantify the amount of goodthings that nature does.

Merit Valdsalu: And then at some pointa company's going to purchase that and we're gonna burn the token and that'sit. That's kind of the, the entire business model. However, at some point weunderstood that it doesn't really work like that. Well, it, it can work likethat to some extent, but it's not going to solve the big problem.

Merit Valdsalu: It's not going to.Help us to switch to a fully sustainable future that we actually need toachieve. And it's actually more complex than just, you know, assigning vital tonature. It's also thinking about who is actually going to buy the tokens. Andif the buyers today are enough to actually create this systematic change.

Merit Valdsalu: So we understood thatif we only think that. Businesses are the ones who are going to pay for fixingclimate change and biodiversity loss. Then we are probably wrong. They're notgoing to do that. Mostly because they have a very certain amount of money thatthey can spend on projects like this.

Merit Valdsalu: So if we want to getmore financing into nature protection and finding climate change andbiodiversity loss, we need to come up with something that scales beyond justthe business model of C. Putting money somewhere to kind of compensate fortheir own wrongdoings. And then it, I think it was basically two years intobuilding the company.

Merit Valdsalu: When we finally hadthe courage of actually starting to think about, well, we have this amazing wayof tokenizing nature. We have the tokens, we have basically all thetechnological solutions already more or less implement. why don't we actuallyroll this out as an actual cryptocurrency. And once we kind of started thinkingabout that, because we just, at some point wanted to expand the way how we canroll this out to a wider audience.

Merit Valdsalu: We also understoodthat, well, this is going to add a new layer to what we're doing, and that isthat if we roll this out as an actual currency, we're able to engage with thebasically entire population eventually. So we can create a new financialsystem. That is based on how much nature can sustain.

Merit Valdsalu: And that is somethingthat is actually going to solve climate change and biodiversity loss because bylimiting the amount of tokens that we create based on nature we do that basedon the real time data. So we actually have an Oracle that is basicallyreflecting the work that nature is doing in the real world.

Merit Valdsalu: Based on that we canlimit the amount of tokens in circulation to how much nature can sustain. Andif this starts to work as an actual currency, we can also limit the economy tohow much nature can sustain. And that is the ultimate sustainable economy thateverybody's talking about. The net net neutral net zero economy.

Merit Valdsalu: That doesn't make moregreenhouse gases, then it the nature can absorb or doesn't use more rawmaterial than nature can also sustain. So, so these are the things that kind ofcame along the way. It also took us kind of More courage to, to take that stepbecause we understood that this is going to be a whole new game.

Merit Valdsalu: So it's not just aboutselling to companies, something to like a compensation instrument. It'sactually bailing a whole new financial system that now places. Nature at thecenter of everything. But then again, once we had come up with this idea, itkind of made so much sense that we were, we, we couldn't go back.

Merit Valdsalu: Like how can we just,you know, again, go back to just selling credit to companies that is actuallynot helping nature and the climate and all of that, that much. If we canactually come up with a crazy idea which is obviously a huge leap of faith, butif it works, it's going to have a huge impact on the world.

Merit Valdsalu: And that is kind ofthe solution that everybody is looking for today.  

Mike Townsend: Where do you get thedata from to measure how, you know, you use the word services a as somethingthat I think like trees are doing to inhale CO2 and exhale oxygen how, yeah.How do you gather that data?  

Merit Valdsalu: That is a very goodquestion.

Merit Valdsalu: So when we started, wekind of expected that this information is somewhere because like nature iskeeping all of us alive. There are thousands of satellites orbiting around.Obviously, there must be some place where people are tracking all the thingsthat nature is doing at this point of, so like how the planet is working, butthen we realized, well, it's not like there's no place where you can go andcheck.

Merit Valdsalu: Like, what is thisforest behind my house doing to make this planet habitable? . And then weunderstood that if we want to build a very scalable system that is easilyaccessible to all land owners across the world, we need to start from that. Weneed to describe how nature works and we need to describe that global volume.

Merit Valdsalu: So we had this verybig scale as a vision at the very beginning. So we understood. Well, let'sbuild a digital twin of the planet earth. So there, there must be a way how todescribe all of that and bring this information to the digital world. So westarted from taking satellite data. So we use satellite data to basically look atwhat is the, what is the natural resource that we are looking at?

Merit Valdsalu: So right now we workwith forest. Eventually we will be working with wetlands, grasslands or landtypes. But unfortunately we can't measure carbonation from the satellite. Sothis is why we are building these global models based on open data that we haveand big data analysis and machine learning to describe how these ecosystemservices work.

Merit Valdsalu: So obviously weweren't able to do that with a very small team. It's quite ambitious thing todo. So that's why we hired an in-house science team. So we. About 20 people whoare full-time working on building this digital twin. So it includes in colleges,climate scientists, but also data scientists who are collecting all these kindsof data.

Merit Valdsalu: So some of the datasets are like global data sets. Some are very local. So integrate all of thesetogether to build this global models that describe power nature works. Butobviously this is something that is never going to be ready. So there's newinformation being published all over the world and which is continuouslyintegrating all of that into our system to make the models more and moreaccurate.

Merit Valdsalu: But why we needed tostart from that is because this is the way how we meet token. So this is theOracle. So we have this digital twin of the world and the simplest way, how togenerate tokens for us right now is like every time a hundred kilograms of CO2is captured in a biodiverse forest. Weit one token to the landowner.

Merit Valdsalu: And this is like theeasiest way in the next phase. We will also integrate biodiversity to carbonstocks and other ecosystem services to that. But we started from something thatpeople. Have learned to quantify and understand that this is something thatneeds to be quantified and valued. So we start from CO2 in nature.

Merit Valdsalu: And yeah, and what'sreally important is that we actually issue the tokens to landowner. So thelandowner have a wallet. They get the tokens there and that is also somethingthat was very fundamental important for us at the beginning, because weunderstood that the only way how the forest will remain intact, if, is if theland owners receive financial gain out of it.

Merit Valdsalu: So, so that was kindof. The starting point, like we understood that the problem needs to be solvedfrom the landowner first for the entire system to work.  

Mike Townsend: And is there a anticipatedor existing input of value into the system? You know, if you issue people,tokens, they have tokens. Is there, you know, that's the, that's the issuanceof value?

Mike Townsend: Is there an input,like, are people buying into these tokens raising the value of the token?Either. Are people doing that nearby or do you anticipate that being funded bygovernments or, or some, some other groups like yeah. Does that question  

Merit Valdsalu: Who buy potentially?

Mike Townsend: Right, right, right.Cause if, if they're issued, but you know, just a, you know, you have athousand landowner that are getting issued tokens, the tokens aren't gonnahave, there's not gonna be a closed loop loop.

Mike Townsend: A valuation in thecurrency. It's like a, you know, circuit. That's not complete. Yeah. But you,you get my point.  

Merit Valdsalu: Yeah. So, so whathappens next? Once we've issued these tokens to the landowner that well,somebody needs to buy them. And the, the simplest use case would indeed be thesame what companies are doing today as well, which is they buy the tokensbecause they want to do that.

Merit Valdsalu: They do something goodand show to do well, that they're doing something good. So they buy the tokensand we bring these tokens and they receive the certificate. And which kind ofsays that they have protected that much for us, which sequesters that amount ofCO2 and holds this type of biodiversity.

Merit Valdsalu: And they can put thatinto their ESG reporting. And that's very easy for. But where it gets moreexciting is where individuals can also purchase the tokens and they don't haveto burn them. They can actually buy and hold the token. Why would they buy thehold? The tokens is well, obviously, because they want to save the world.

Merit Valdsalu: So that's a very goodway, how to finance nature protection directly to landowners. But there's alsoan opportunity to win from this financially. So when I mentioned that the tokencan always be used by the companies which means that there's always a utilityvalue for the token. So the lowest price that token will always have isbasically the utility value.

Merit Valdsalu: So it's like thecarbon biodiversity, the ESG instrument value that it represents. So this isbasically the floor value of the token. Now the, the token doesn't however,necessarily have like a, a ceiling of the price. So the token value canincrease. If, for example, the utility value increases then naturally the tokenvalue will also increase because it can always be sold to somebody for a higherprice.

Merit Valdsalu: There's also apossibility that it will increase speculatively. So if people start to buy moreand more of it than this, then the token price will go up. But what's also, Ithink very unique to our system is that we also have a burn mechanism that willalso help us to. Basically increase the value of the tokens, but the burnmechanism actually happens in a quite unique way.

Merit Valdsalu: So for this to under,for you to understand how this works well, first of all, we need to start fromthe point that we always generate the tokens based on the work that naturedoes. So nature is actually constantly giving us more and more token. So it's,it's a, it's an ongoing process. And then for as long as nature is doing thesegood things, they will generate more and more token.

Merit Valdsalu: If we issue this outas a currency consumers. Take these into their wallet and go and startpurchasing their daily coffee or food or whatever they purchase with theirmoney. Then every time they buy something, a small fraction of that is alsoburned. And that is because like if we generate tokens based on the way naturegenerates these ecosystem services that we consume a daily basis, then at theother.

Merit Valdsalu: We need to, wheneverwe, we consume something we're actually using nature and the ecosystemservices. So this is the place where the tokens need to also be removed fromcirculation. So the more we use the tokens, the more we consume things, themore of this will actually be taken out of circulation as well.

Merit Valdsalu: And then again asnature creates new tokens, then we can again start consuming once for, for aslong as the. We have used up the tokens that nature was able to generate forthe time. And as these tokens are burnt and taken out of circulation, thenobviously the rest of the tokens in circulation will gain in value.

Merit Valdsalu: And that is kind ofthe entire point of the system. So if we are using too much of nature, thenthe. Value of all tokens in circulation will become more and more expensive,which means that it becomes more and more expensive to consume things. And thatshould naturally give us the gap or a limit to the economy that we can't affordto use more nature that nature can actually sustain.

Merit Valdsalu: And that is a verydirect link that we currently missing in our daily lives, because we don'tunderstand when we've used up too much when we consume too much. Is it okay tohave one coffee a day? Should I, should I cut down my coffee? Am I flying toomuch? Is it like three flights? Is that fine?

Merit Valdsalu: Should I cut it downto two or one? So we don't actually have this, this information in our dailytransactions and daily lives. And I, I don't believe that we're able, ever,that we will ever be able to kind of calculate all of these things in ourheads. We need to have a very systematic way that would help us to make thesedecisions in this very simple form, which this currency can also help us toachieve.

Merit Valdsalu: I hope that this ismaking sense.  

Mike Townsend: Yeah. Yeah. Well, I'm,I'm basically hearing you say that if there is going to be a open marketparticipant, And the ownership of nature. If you can, if you can own animals,you know, like you can in agriculture, if you're, if you can own forest, likeyou, you can, in Estonia, you can, where I live in Oregon, you can many placesin the world.

Mike Townsend: Then how do you createan incentive system for the ownership of plants and animals to becomeprofitable without destroying them in the process? And I think there there's acouple things I wanna highlight one. There's this concept of the tragedy of thecommons. Like you could picture this. If you had a hundred farmers, each onewants to produce the most possible yield they can, every year, they also know theydon't want to exploit the soil.

Mike Townsend: But you know, maybethey're all feeding off of you know, the same river, right? So they, they wannause the most water they can individually. And if they, if they use too muchcollectively, they use up all the water and then no one can produce any, any.So there's like, usually that's the purpose of a coordinated like a farmer'sGuild.

Mike Townsend: There's somecentralized organization that says, okay, farmer X, you get this much waterbased on the size of your plot. And so on. Like there's a coordinated,centralized effort for the distribution of limited resources. And that, thatseems to be what we're doing as a species. Right. We're we're pushing, we'renot for the most part.

Mike Townsend: This is not a freemarket. We're not pursuing this aggressively in the free market, because wecould recognize that the power of the centralized governments possess in likepreserve making declarations to preserve nature, or at least incentivizingnegative taxation on utilizing like carbon credits, for instance.

Mike Townsend: So I think there's,there's two things. One, it seems like the centralized government approachesban certain activities. Like you can't. Waste in like Boston in Massachusetts,for instance, used to be disgusting. Like the Harbor used to be growth. Youcouldn't go in it. That was like 50 years ago. They instituted local governmentpolicy on dumping and putting shit in, in the water.

Mike Townsend: Now it's like, youcould almost drink outta the water. It's amazing. And so there's definitelyexamples of that all across the world. I tend to think, or I, I, I'm not sureI'm convinced, but it, it seems to me. If we really value our forests, thenhave them be protected by the government there. Like there is no ownership offorests and that should be the direction as opposed to, let's try to makeforest ownership without cutting the trees down profitable.

Mike Townsend: But that, that in someways it doesn't square with your model. What, what's your. Reaction, like,would you push for that direction too? Or how do you sort of think it?  

Merit Valdsalu: That's actually a verygood question. So if I think of like the ownership structures around the world,they're so different. Unfortunately, I actually can't say that like with sometype of ownership, the, the outcome for, for us is actually better.

Merit Valdsalu: So there's a lot ofgovernment owned for us around the world, which are destroyed basically at thesame rate or even faster than some that are in private owner. There's a hugepressure on local communities who are actually also using local governmentallens. But there's a huge pressure on them financially to still destroy nature.

Merit Valdsalu: So I think there issomething to kind of think about like, what are there is some connectionbetween who owns the. But I think the sad part, at least right now is thatgovernments don't also make, always make the right decisions. Especially interms of land ownership. I think at some point when there is an idealgovernment that kind of has the sustainability in mind, it might actually makesense.

Merit Valdsalu: But right now I thinkI don't know if, if there's any country where we, that we could take as anexample where they actually do everything right. And nature is really, trulyvalued for everything that it does. There are actually even examples from fromfrom some of the rainforest owners we've been talking to in Brazil who actuallyhave shown us maps that I haven't checked, but according to them, they, theyhave like these maps where they compare illegal logging in governmental ownedlands and in private ownership and where they make the statement that isactually.

Merit Valdsalu: Like more of theillegal logging is happening in the governmental owned land because they don'tdo so much nature protection. Whereas private owners have a very high financialreason for protecting their forest. So there's no illegal logging there becausethey are literally. Physically protecting their forest there.

Merit Valdsalu: So I think it's like,it depends a lot on the country. Unfortunately the land ownership and the landmanagement is like, it's so different across the world. So there is no unifiedsystem for that. So the one thing that we kind of have figured out that kind ofconnects all landowners regard of the type of geographic location is wellmoney.

Merit Valdsalu: Well, everybody wantsto receive some kind of. Return on that. So, so this is where we kind of hookedourselves. So if that's the main driver of forest cover loss, whether it's dueto forest industry or, or if it's due to the expansion of agriculture, it'sstill about like, who pays more. If we are able to pay more.

Merit Valdsalu: For the to thelandowner, then they are more likely to make the decision to keep the naturalresources intact. And that is also something that we have learned during theprocess. So we started talking to landowners and well at first you, well, wehad like this kind of fear that, well, how are we going to talk to like thisbig.

Merit Valdsalu: Forestry industrypeople. They're probably going to laugh at us. And at some point you understoodthat. Well, most land owners do not wake up in the morning thinking, oh, yes, Iwant to cut down a forest today. They actually use this or see this as abusiness. If they're able to earn their money from somewhere else, they'reactually very open to that.

Merit Valdsalu: So, so yeah, I think Ithink it's a mix of different things. So the owner, how they, how much theymake money and all of that and how easy we make this for them. So so yeah, thisis where technology is helping us a lot. So we, we try to make it as easy forthem to make this alternative decision as possible.

Mike Townsend: It seems like worstcase scenario is the government protects the land, but they do a terrible job.So you have a massive black market of probably. Just terrible stewardship ofthe land, you know, they're going through destroying all the trees. Instead ofI was doing some research on this, the Oregon, the state I live in, they allowa lot of logging and there are certain rules.

Mike Townsend: Like you can't log ahundred acres within a certain distance of another. Plot of land that hadalready been logged within five years, you have to leave like 10% of the, thetrees standing. There there's, there's other things like that, but there'sthere's thoughtful consideration into the regeneration of the forest.

Mike Townsend: I'm not claimingthey're doing it right, but I do think that the government oversight incooperation with private companies to enable like a, a regenerative sustainablesystem makes the most sense to me. I, I see other examples of this, like in, infire prevention in, in the, in the Midwest or the west, the United States likefires a really big deal.

Mike Townsend: And there's a lot ofinfrastructure buildings that have been built in, in really dense forest areasthat have naturally occurring fires. And so when we put out fires all the time,of course, the underlying fuel builds up the dead wood. And then you get thesemassive infernos that destroy the. Because it's just not a naturally occurringphenomenon to have it be that hot and, and burn with that much fuel.

Mike Townsend: So I, I think it'slike the pendulum is swinging now to realizing, okay, we can't. If we put ouremphasis on stopping the, the things that we don't want, like Def deforestationthe wildfires, if, if we wanna stop it entirely, we're gonna pay a massiveprice for that, because it's just gonna come back and, and just the whole,like, there's just gonna be massive repercussions on the negative side.

Mike Townsend: So it's like thebalance, like there has to be enough wood production for people to buildhouses. Right. I mean, otherwise, like what do we do without wood? There's allsorts of real genuine. Foundational needs for wood. So I see it as a balanceand I, I wonder how it looks on the profitability of owning land without anyforestation.

Mike Townsend: Like, do you, are youmore on the side of, you want to minimize forestation, not forestation loggingas much as possible, or do you see kind of a happy equilibrium meeting themarket or. . Yeah. What's your thoughts on that?  

Merit Valdsalu: We actually allow twotypes of forest management. So if somebody wants to go in for fullconservation, this is perfect.

Merit Valdsalu: Like they don't haveto do anything. They can just earn the tokens by not doing anything. Butthere's also like, like you mentioned, like people still need raw material aswell. So we actually allow taking some raw material, but we are only allowedthat with selective cutting. So that means that you can take out some of the,of the trees there.

Merit Valdsalu: But you have to keepthe entire ecosystem there. So the ecosystem of the forest has to remainintact. And that is because like There are like big problems that we're facing,which obviously one of them is climate change. And then carbon circulation isreally important to tackle that. But there's also other things such as thebiodiversity loss, which is something that is according to some scientists,even worse than climate change right now, and is threatening humans and thelife on this planet at, at least as as roughly as climate change.

Merit Valdsalu: But that is somethingthat we don't really as humans understand. We Don. Feel that we're losingbiodiversity around us. Like we don't understand how many bird species we'velost during the past decade. we just naturally become accustomed to the numberof birds that we have around us every year. And that is something that isdirectly related to destroying ecosystems as a whole.

Merit Valdsalu: So if we remove someof the trees from the forest, then the habitats for these animals and birds andinsects still remains there. If you completely clear cut it. Even if we. Refor.So we replant the trees there. It still is gone for a few decades. And if we rereplant like a monocultural for us there, then it's never going to be mm-hmm.

Merit Valdsalu: never going to be thesame as it was. So it's a very, very complex issue. That is why we can't justfocus only on tokenizing carbon there as well. And this is why we're buildingthese complex systems that actually also includes biodiversity and eventuallylike socioeconomic aspects and all of that as well.

Merit Valdsalu: So yeah, it's, it'ssomething that we will continuously be working on to get like the. The fairvalue of nature, but also enabling humans to use some of the resources thatit's providing us with because that's also clearly a necessity. Mm.  

Mike Townsend: And, and how do you,how do you come up on climate change more generally speaking, do you feel likewe are, you know, we're recording August, end of August, 2020, do you feellike, Hey, if we put all the right, you know, we drive electric cars, wetokenize forest, we're doing all the right things.

Mike Townsend: We're on a good path.Are you more pessimism? What's your general disposition.  

Merit Valdsalu: So I'm actually verylike I, I think I'm a very realistic person. So if I look at the numbers, so Iknow that we need to cut our emissions global emissions by 45% by 2030. Sothat's in eight years. And if we look at the governmental commitments likethat, governments have made across the.

Merit Valdsalu: then we are on a pathto increase our missions by 14% by 2030. So that is kind of giving us the, thehint of how bad we're actually doing. And I think the worst is that we don'treally have control over climate change. We don't like we do have climategoals, but we already know that we are not going to meet them.

Merit Valdsalu: So there's a lot oftalk, but not enough faction. The other thing is that the same similar type ofgoals for biodiversity laws have also been set. So in 2010 governments had setdecades worth of. Biodiversity goals. So they came up, came together again, 10years later in 2020, and they understood that we had, like, we didn't meet anyof the goals that were set in 2020 2010.

Merit Valdsalu: So that means that wealso don't have any control over biodiversity to us, even though we are awareof these problems, we know how to solve, solve them. We just, just don't dothat. And I think what's. Worse is that we are not able to meet any of thegoals. One by one. We don't even have a clear system of getting or fixing allof this as a system systematic way.

Merit Valdsalu: Like we don't know howto. Rebuild our economy in a way that we would not end up at the same placeagain, or that we wouldn't, you know, consume too much as we do right now everyyear. So this year I think the world overshoot day. So the time when we hadused too much of the natural resources was I think in July.

Merit Valdsalu: So we are already pastthat point. Everything that we consume today and tomorrow will be already toomuch. So I actually have to say that we are already, we are doing worse thananybody, or like the majority of people actually realize.

Mike Townsend: Is this a I, the, fromthe limited research I've done on this, there seems to be a wide range ofmodeling.

Mike Townsend: And, and it seems the,the, the debate seems to typically come down to not whether or not we're usingmore or less than what different people say we should. What is the accuracy ofthe modeling because, you know, I certainly by the referencing by the models,you're referencing, we're way past that there seems to just be, and maybethat's just the best that we have with where we are today is there's just awide range of modeling is that I would imagine that that's, that's the, that'sthe primary cause for debate as.

Mike Townsend: How, you know, on, onsome level, we also have to recognize that human beings are, technology's justmoving towards lower emission. Like electric cars are just better in everysingle way, regardless of climate change than internal combustion. Electrictrains are better than coal trains and steam trains and gas drains.

Mike Townsend: So I, and there's allsorts of other examples of this where like people we're having a conference.You know, podcast software and all these other softwares, and this I'm notflying to Estonia to meet with you. And this is happening all over the place inso many different industries. And so there, it's kind of interesting to me tosee, okay, we are, things are naturally just happening in this same directionon what is the interve intervention intervention necessary.

Mike Townsend: And could thatintervention have far reaching negative? External externalized repercussions.You know, like I saw one that was like slow down the cargo ships across theworld. And the impact of that is like, may, maybe that's good for the emissionsof, of that ship. Maybe the outcome of that is people starve to death.

Mike Townsend: May it's hard and it'shard to like externalize those things, but I'm curious your just thoughts onthe, on the degree to which we can predict the impact of our collective decisions.  

Merit Valdsalu: Yeah I think that issomething that has been holding us back a lot. So we debate a lot about theaccounting, like how, who has to account for what?

Merit Valdsalu: And we kind of a lotof the debate around this climate and carbon goes and ESG and everything isabout like, oh, we accounting everything precisely. Can we actually claim thatwe made this impact, but eventually I think we will, we will be able tocontinue these discussions and just see the world collapsed by the time.

Merit Valdsalu: Instead of actuallylike we should be taking action right now. So I think that is like the mosttragic part of what we are doing right now. So there's a lot of debate anddiscussions around something that has been very obvious for sciences fordecades. So they have been telling the world about this for tens and tens ofyears.

Merit Valdsalu: So I think it's, it'skind of like more we, we should be focusing a lot more on taking action thanjust discussing these things. And I think, unfortunately I do believe that weare going to do, we are going to be forced to do some real changes to the waywe live. So there are already very interesting things happening in the world.

Merit Valdsalu: So there's obviouslyan energy crisis here in in. Which is of course also due to the war that'shappening and all of that. But I just, the other day I was reading about theKosovo where the electricity consumption or energy consumption is already beingcontrolled by the government. So every six hours they switch of power.

Merit Valdsalu: Just to make sure thatthere's enough for them for the next hour. So every six hours to switch it offand then they turn it on again. And I have actually been wondering, like atsome point there's going to be similar things happening because of climatechange and biodiversity loss and all of that as well.

Merit Valdsalu: So the more we delayour decisions today, the harsher all. Later decisions will be. So at somepoint, maybe we have to switch off the power for some time, just because we'renot able to generate enough power. I think what's also interesting is that alot of these technological solutions are actually there.

Merit Valdsalu: They just haven't beenscaled enough. They haven't received enough financing and funding to scale. Wecould debate about the reasons for that, but at some point there's, again, noreason, or like no point in debating around that is just like, it is now timeto make these right decisions because time is literally running out.

Merit Valdsalu: Also when thinkingabout technology, like there's a lot of things that are already working todayand then a big part of all this climate action that we think that we're doingis actually hoping that some technology that has not been invented or is notworking today will start to work at some point.

Merit Valdsalu: And we kind of haveplaced our, our bets on that, that it will start to function. You probably knowthat technology is not like, it doesn't always work like that. You can't thinkthat something might work, but eventually like five years later, youunderstand? Well, it didn't work. So I think that's also something that we willsee in the future.

Merit Valdsalu: So some of thesolutions we have been hoping that would work are, will prove that they willnot work. . So I unfortunately think that we are in a quite difficult positionand I think what's, what's the most important part is that we all have tounderstand that nobody else is going to fix climate change and biodiversity andall of that for us.

Merit Valdsalu: So it it's going to bethe entire human is going to be involved in this and it's going to. A lot fromall of us. So we need to change our lifestyles until we don't have the technologicalsolutions that help us to do everything sustainably. And this is kind of takingus back to what we're building with Single.Earth.

Merit Valdsalu: So a system thatwould. Kind of inherently be sustainable that would kind of help us to move intothis very sustainable system where you can't consume more. And that would kindof be the basis of this really balanced life, where we can use all of theecosystem services, but not too much because that's the only way we cancontinue on this planet.

Mike Townsend: What percentage ofpower production, energy production do you think should come from nuclear powergeneration?  

Merit Valdsalu: Oh, that's a goodquestion. So nuclear power generation is actually a very good question. So I,that is something that I have, I had my doubts about, but looking at where weare heading, I think the biggest threat is not switching to nuclear at somepoint.

Merit Valdsalu: So if I think this isone of the technology that we should be implementing really. I think, I thinkit should be one of the, like, inside our like renewable energy portfolio, Ithink they should definitely be there. And depending on the location that couldalso be solar or wind power or hydro power.

Merit Valdsalu: So all of these shouldbe combined depending on the place. And I think nuclear is also a part of thesolution. It's very scalable. It can be solving a lot of the energy questionsin very many areas.  

Mike Townsend: So do you think like90%? 95?  

Merit Valdsalu: 80?  

Merit Valdsalu: Possibly, possibly, ifwe are able to get to that point then possibly.

Merit Valdsalu: So one of the thingsthat we see here in Europe where some of the countries are switching off thenuclear power plants is that we see more and more of these biomass energy,which means that this forest are taken down, turned into Bo pellets and thenburnt Jesus. Is that Germany? Among other things, Germany is switching off thethe plants and there's a lot of countries that are actually using biomass.

Merit Valdsalu: And it's actuallywhat's. the craziest part of that is that in the European union, it's actuallyconsidered green energy. So you might even get like bonuses for that, or likeyou like doing something green for that. We actually just,  

Mike Townsend: this is where I thinkwe're crazy because this, this is where like, okay, we, it's not about, it'snot about pushing forward on slowing cargo ships.

Mike Townsend: It's like, we're,we're, we're kind of insane thinking that cutting down forests, destroying. Thebiodiversity and then burning wood releasing CO2 from that burn and callingthat sustainable and shutting off your nuclear power plants, and then realityjust buying a ton of petroleum on the side anyways.

Mike Townsend: It's like, yeah, Idon't know. I, so I, yeah, I, I don't see, I don't hear any knee jerk reactionto nuclear. To me, it seems pretty black and white. It's like, there's gonna bea continued development of the technology. The technology is freaking amazing.Appellate this size is basically the amount of energy you need in yourlifetime.

Mike Townsend: And you just, yeah, Idon't know. I don't know exactly what the best answer is on long term viabilitywhere you just buried in the ground or like these things shut up, but eitherway it just, I don't know. It just seems like in terms of energy production tonot be going in and China's going hard in nuclear, like they're building.

Mike Townsend: I, I think the numberI heard was a hundred that could be off don't quote me on that, but they'rebuilding a lot of nuclear and yeah. So, yeah, that's very scary efficient.  

Mike Townsend: And where are you guysnow in terms of the product, do you have, how bigs the team, how much tokenshave been issued? Like how many landowners are on the platform?

Mike Townsend: Just gimme a sense ofscale and progress so far.  

Merit Valdsalu: So right now we are ateam of a bit more than 70 people. So roughly one third of us is scientists. Sothe climate scientists, ecologists data scientists who are building the digitaltwin, then roughly one third is actually the developers software engineers.

Merit Valdsalu: We're building all ofthese things. And then one third is the business side. So the marketing supportonboarding all of that. We're also a licensed company here in Estonia. So weactually have this virtual asset service provider license. So we do all of thisKYC and, and onboarding things that are required by the law.

Merit Valdsalu: Where we are in termsof the token issues we have minted the first 8.5 million tokens. We have mintedthe tokens to lands that are located landowners located in Europe but also inBrazil. So we have a huge Brazilian rainforest in our portfolio a beautiful,intact 100% biodiverse rainforest.

Merit Valdsalu: And then we have a lotof mature forest in Europe that are actually quite rare here. So verybiodiverse and very nice. And we have actually made the first transactions,although we haven't, like as of today, we haven't publicly opened to sale yet.So we. Closing the waiting list at the end of August, and then starting thewaiting list sales on the 1st of September.

Merit Valdsalu: And then duringSeptember, we will be doing this waiting list sales to the people who havejoined. And then towards the end of September, we will also make this publiclyaccessible at the fir in the first phase, the tokens will be hold held in ouron our platform in the custodial wallet. So this is the first phase of rollingthese out and then.

Merit Valdsalu: Towards the end of theyear, we will also make it possible to transfer, to tokens, to external walletsand exchanges and all of that. So we actually start with a fixed price, whichis three euros per token. The price discovery for us. Was a huge thing that wehad to work on quite a lot. And in the end we understood that it like, likewhere do we get the price from is not from the existing carbon or biodiversityprices that you could find on the market.

Merit Valdsalu: But we actually had toturn to the landowners to understand what is their expected return on theirinvestment. And from there we made the calculations on what would actually berequired for them. To be able to keep the forest growing. So it has been a longprocess. A lot of our team has been kind of hired to figure all these thingsout.

Merit Valdsalu: And now we're at theplace where we actually have all these puzzle pieces together, at least to theextent that we are able to make the first transactions and start scaling thisboth from the supply and demand site. That's awesome.  

Mike Townsend: So 70 people workingon it for years. Pre-launch who's funding this, or how much money have you guysraised?

Merit Valdsalu: We raised the searound last summer that was led by equal ventures, which is a Swedish beforethat we also raised a pre seed from icebreaker VC, which is a finish venturecapital firm. So they have been helping us to build all of that. And I thinkthat was kind of also like we, we.

Merit Valdsalu: Did the seed roundlast year, which was a very nice time to fundraise. And I think the best betthat we made was hiring our in-house science team. I, I don't think we would bekind of crazy or bold enough to do it perhaps today with these marketconditions. But at that time it made a lot of sense.

Merit Valdsalu: And I think that islike one of the. Biggest assets that we have. So we're able to scale our tokensupply very fast. So there are other companies who are also in the nature basedclimate solutions and organization space, but they usually don't have their ownsupply. So this is how we're actually very different.

Merit Valdsalu: So I mean, rent ourown tokens and we can do that. Thanks to the science team  

Mike Townsend: And 7 0 70 people onthe team. How much, how much have you guys raised?  

Merit Valdsalu: It was 7.9million  

Mike Townsend: Awesome. Solidprogress. So yeah, I hope this was a great conversation. I very much enjoyedit. Are you active on Twitter? Medium. Are you writing anywhere personally?

Merit Valdsalu: I am. I am. I'm tryingto be more active. I do I am active on medium on Twitter. We have a discordchannel. I am on LinkedIn, so I try to be as active on social media aspossible. I love discussing all climate change, biodiversity loss and all thesetopics related to that, especially from the anger, how technology we three andall of that can actually help us to achieve these crazy goals.

Mike Townsend: Well, congrats on allthe progress so far and hope you guys succeed, obviously for the betterment ofeverybody, but really enjoyed it.  

Merit Valdsalu: Thank you for havingme. All right,  

Mike Townsend: Mar bye. Bye.

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