Subsidies, Permits, and Carbon Rules Shape Whether Conservation Markets Work

Holly Fretwell framed the session around a practical problem for environmental entrepreneurship: environmental benefits are often broadly shared, property rights can be unclear or incomplete, and the transaction costs of turning conservation into exchangeable value can be high enough to block the market from forming.

That is the working definition behind Hoover’s “enviropreneurs,” as Fretwell described them: mid-career conservationists building projects that run through markets and producing environmental benefits as an outcome. The point was not to defend markets in the abstract. It was to examine where they succeed, where they struggle, and where mandates either help, frustrate, or substitute for missing market conditions.

The three businesses onstage each tried to make a different environmental benefit financeable. RESILIFT is trying to make flood adaptation cheaper and more scalable by bringing sensing and, eventually, automation to structural house lifting. Mast Reforestation is using carbon removal revenue to fund post-fire reforestation, including the burial of fire-killed trees. Cultivo is mobilizing institutional capital into degraded grasslands and ranches, initially through carbon credits and increasingly through other environmental attributes.

Fretwell’s central premise was that these companies make theory visible. They have to find a payer, reduce the cost of exchange, and operate inside policy systems that may not have been designed for the environmental outcome being sold. In some cases, the missing market is a technical problem. In others, it is an insurance subsidy, a permitting gap, a carbon-accounting rule, or a public-land leaseholder who cannot get a simple “yes” from the state.

Maiky Iberkleid described RESILIFT as a climate-adaptation technology company focused first on flooding. The underlying physical intervention is not experimental: lift a house above the base flood elevation onto concrete piers, and floodwater can pass beneath it rather than through it. Iberkleid called structural lifting a “silver bullet solution” for homes exposed at base flood elevation.

The problem is the industry around it. Structural lifting is expensive, slow, and difficult to scale. Iberkleid said there are roughly 200 structural lifters across the country, mostly family businesses with small local territories and little competition. There is no union or trade school pathway. In his account, becoming a structural lifter typically requires about 10 years of field experience, leaving no obvious mechanism for expanding supply quickly.

RESILIFT’s first product, the Residential Structure Lifting System, or RLS3, is meant to reduce that bottleneck. The system creates a sensor-based, two-dimensional map of a house while it is being lifted, giving the operator real-time information about the lift. The goal is to flatten the learning curve: if a computer can tell the operator what is happening and what may be going wrong, the operator may not need a decade of experience before being insurable or trusted on a job.

The company’s slide showed the core contrast: a flood-susceptible house at grade versus a flood-proofed house raised on piers. It also made clear that the same sensing system is being sold into a small ecosystem of users, not only to the person operating the hydraulic jacks.

The longer-term plan is to incorporate automation, connecting the sensing system to the hydraulic jacks that perform the lift. The system would not merely describe the lift; it would operate it.

The first strategic assumption behind RESILIFT was wrong. The company began as a tech-enabled construction company, assuming that homeowners facing serious flood risk would pay to lift their houses. Iberkleid cited 18 million homes in the United States with a one-in-four chance of total asset loss, representing about $8 trillion in property value and $500 billion in property taxes at risk. The initial expectation was that some group of homeowners would simply want the job done.

That was not what the company found. RESILIFT segmented the market into high-net-worth, middle-income, and low-income homeowners. When it approached high-net-worth homeowners, Iberkleid said the repeated answer was that they already had flood insurance through FEMA’s National Flood Insurance Program. In his telling, those homeowners believed that if flooding occurred, FEMA-backed coverage would help pay for a new house. Moving down to the next group produced the same answer.

Iberkleid argued that the flood-insurance subsidy undermines the private incentive to invest in structural lifting. He said 95% of flood insurance policies in the United States are issued through FEMA’s NFIP program and are heavily subsidized. His formulation was that homeowners are “basically being given almost free flood insurance,” which prevents the market from recognizing investment in structural lifting.

That forced RESILIFT to pivot from a construction-services model to a technology model. The aim became lowering the cost of lifting enough to make the math work: from roughly a quarter-million dollars per house to about half that. The company is also watching a shift in government adaptation spending. Iberkleid pointed to Army Corps of Engineers projects in New York and FEMA projects in Florida as examples of public bodies moving from reactive disaster recovery toward proactive home lifting.

His policy preference was blunt: if he had a magic wand, he would eliminate NFIP, while doing so carefully for people who currently depend on it. The program, in his view, creates perverse incentives that make adaptation harder to sell. He also argued that proactive flood resilience has a strong fiscal case: each dollar invested before a disaster saves roughly $7 to $8 in post-disaster recovery. With FEMA “$20 billion in the red,” he said, the economics are straightforward; political will is the unresolved problem, especially because flooding cuts across red and blue states.

Grant Canary described Mast Reforestation as a carbon project developer, but one built around a vertically integrated reforestation supply chain. Mast owns Cal Forest, which Canary said grows the majority of California’s conifer trees, and Silvaseed, which he described as the seed bank for most of the western United States except Weyerhaeuser. That ownership matters because, in his view, the reforestation supply chain is not merely weak; it is “completely broken.”

Mast’s slide showed the business model as a sequence of field operations: a burned forest landscape, decked logs that would otherwise be pile-burned, an excavated chamber, a sealed vault with sensors, and replanting. The visual point was that Mast is not only planting trees. It is turning the disposal of dead biomass into the financing mechanism for reforestation.

Instead of pile-burning fire-killed trees, Mast buries them in high-clay soils where, Canary argued, they will not compost and release methane or carbon dioxide. The point is to create the “does nothing” condition familiar from a compost bin without aeration: the material stays put for a hundred years or potentially several thousand.

That burial generates carbon credits. The revenue then funds reforestation. Canary’s example was a 2,000-acre mother-daughter ranch in Big Horn County, Montana, affected by the 2021 Poverty Flats fire. The family did not have the several million dollars needed to reforest thousands of acres. Mast took what is normally one of the most expensive parts of reforestation — dealing with fire-killed trees — and turned it into a revenue generator.

The company reforested 125 acres for the family. The benefits Canary emphasized were not only carbon-related. The ranch uses silvopasture, so shade matters for cattle health. Hunting leases and visits by Boy Scouts and Girl Scouts are sources of revenue that depend on having a landscape people want to enter. The family also cared about aesthetics and stewardship. “The number one thing they wanted,” Canary said, was “their forest back.”

His sharpest disagreement was with the assumption that burned forests will naturally return. Canary said he wanted to offer a “grumpy forest policy expert” response to the “grumpy economist” claim that forests come back on their own. In his account, they increasingly do not. More severe fires destroy seed sources in the soil and in tree crowns. He said forests once could be counted on to return about 90% of the time, but that confidence has dropped sharply. When forests fail to return, invasive species such as Himalayan blackberry and Scotch broom can take over, creating additional fuel risk.

Mast’s own history reflects how hard it is to scale reforestation through technology alone. The company began as DroneSeed, went through Techstars in Seattle in 2016, obtained three precedent-setting FAA waivers for heavy-lift drone swarms, and secured five patents for deploying seed vessels across burned landscapes. But Canary said the company could not achieve the survival and establishment rates it needed. It “beat nature,” but not by enough.

The deeper constraint was seed and nursery supply. The company did not initially understand how dire the seed supply was, because the industry had long assumed that forests burned and then regrew. Climate change and longer dry seasons changed the premise. Canary urged the audience to think of forests as being in a kiln: the longer the dry season, the drier the wood; the drier the wood, the better it burns. Warmer nights also reduce the period in which forests can “relax after the kiln.”

He said survival and establishment rates have fallen from around 90% to about 40%. That pushed Mast from aerial seeding toward owning and rebuilding the supply chain.

The second major shift was financial. Mast initially tried to use ex-ante reforestation carbon credits: credits based on carbon that would be captured in the future by trees planted after a fire. The company worked with Climate Action Reserve on a Montana project and expected buyers to purchase and retire those credits against prior emissions. But between 2020 and 2024, Canary said, carbon accounting evolved in a way that effectively eliminated that model. Retiring future carbon removals against past emissions became unacceptable.

The accounting logic made sense to him in principle — “maybe you shouldn’t take future revenues against prior expenses” — but it created a financing problem. Reforestation takes decades. If a forest takes 60 to 80 years to grow, the net present value of future carbon, in Canary’s phrase, is effectively something one might as well set on fire. Mast therefore shifted toward biomass burial, where credits can be issued much sooner because the carbon is already in the trees and is being stored.

That model better fits venture capital than long-rotation forestry. Canary said Mast took fire-killed trees from the start of construction to issuance of credits in nine months. He also said the company had regained product-market fit, pointing to delivery of more than 4,000 tons bought by Bain & Company, RBC, and BMO. By contrast, forestry timelines can be seven to 10 years in high-productivity southeastern forests, 20 years in productive West Coast timberlands, and 60 to 80 years in lower-productivity lands from the Rockies across much of the United States. A 10x return in 10 years, the standard venture frame he invoked, is hard to reconcile with those biological timelines.

Manuel Piñuela described Cultivo as an infrastructure platform that mobilizes capital into grasslands, specifically U.S. ranches. The company’s starting point is the scale of the asset class: the slide stated that grasslands cover 40% of the world’s land area, that the United States has 660 million acres of grazing lands, loses an average of 2.5 million grassland acres per year, and has 27,000 ranches larger than 5,000 acres.

Cultivo’s premise is that degraded ranchland can be treated as a distressed asset and converted into a performing natural-capital asset. Piñuela emphasized that ranchers are not customers, buyers, or investors in Cultivo’s model. They are partners. The company enters partnership agreements with profit-sharing mechanisms, leaves the land unencumbered, and ensures that ranchers benefit first from capital and operating expenditures invested in the land.

The customers are financial institutions. The company began with “family, friends and fools,” then high-net-worth individuals, then asset managers, and now pension funds. Those investors want a return. Cultivo’s first projects generated that return through voluntary carbon credits, especially credits created from increases in soil organic carbon.

The operating theory depends on changing the ecological performance of the ranch. Cultivo’s slide showed the basic carbon pathway: plants absorb carbon dioxide to make carbon-rich leaves, stems, and roots; soil organisms feed on dead leaves and roots; carbon is locked underground, though some carbon dioxide is released back into the air. The same slide linked grassland regeneration to jobs, food security, water, carbon, landscape resilience, and natural services.

Cultivo uses machine learning and data to identify ranches where intervention can have significant impact. The company then invests to retain more water, increase soil moisture potential, increase biodiversity, and support perennial grasses with deeper roots. Those roots add carbon to the soil, creating soil organic carbon that can support carbon credits.

Piñuela repeatedly returned to transaction costs. Cultivo’s platform is meant to originate and diligence projects at scale, using data and sensors to underwrite both the credits and the total investment. The company also invests directly in the physical requirements of regeneration: wells, water troughs, piping, and other systems that move water across the landscape. Some ranches, he said, effectively become piping companies as they distribute water.

The grazing system is another core intervention. In the absence of native herbivores, Cultivo uses cattle to mimic the impact of a natural herd. Traditionally, ranchers move cattle across physical paddocks in adaptive multi-paddock systems. Cultivo has moved toward virtual fencing, putting collars on animals and using artificial intelligence, combined with local grounded data, to create grazing plans. The cattle move in response to acoustic signals. Piñuela said Cultivo is the largest deployer and investor of virtual fences.

The business case is broader than carbon. More ground cover helps capture more water. Better forage can support more animal units and strengthen food security. Project design can create firebreaks and other resilience features. Landowners want a higher profit share and a shorter path to that profit share; investors want returns; carbon buyers want durability. Piñuela argued that the incentives can align around regeneration.

But Cultivo’s first strategic assumption was too broad. Piñuela said that when the company began seven years ago, he believed — “with a lot of ego” — that the platform could analyze any biome across the planet. That proved wrong. Investment-grade natural capital assets require detailed data. Forests, grasslands, and wetlands are each complex. The company narrowed first toward inland ecosystems, then further toward grasslands.

It also narrowed geographically. Cultivo began in Latin America and Africa, but institutional capital, especially pension-fund capital, was too risk-averse for the country-level risk involved. The company shifted toward North America — Mexico, the United States, and Canada — and especially the United States. Piñuela said the pivot massively reduced the pipeline four years ago but allowed the company to deploy more capital by matching the asset, the risk, and the customer.

There was a cost to that pivot. Cultivo had engaged communities in Latin America, Africa, and some in Southeast Asia, then had to step back and try to connect them with NGOs or other actors. Piñuela acknowledged a ripple effect in those communities. The narrower strategy was better for the business and its investors, but not costless for people who had expected participation.

The regulatory problems described by the three companies were not all straightforward prohibitions. Often, the obstacle was that the relevant public body lacked a template, precedent, or incentive to say yes.

For Cultivo, the problem arises when ranchers own deeded acres but also lease land from state land offices or federal agencies, especially the Bureau of Land Management. The durability of carbon and regeneration practices matters to investors and offtakers: the longer the practices persist, the more durable the carbon outcome and, in principle, the higher the value of the credit.

That means ranchers need their landlords — state or federal agencies — to acknowledge or approve participation. Manuel Piñuela said the pleasant surprise was that agency officials were not saying no. The difficulty was that they were not saying yes. There were few precedents and no standard documents that let them approve the arrangement confidently.

His “Christmas shopping list” was modest: a predetermined contract that would help officials in each jurisdiction say yes. He did not argue for a top-down federal solution. In fact, he said the document should emerge from the ground up, because the demand is coming from ranchers and communities rather than being imposed on them. Regulation, in this case, is not necessarily blocking the activity by command; the paperwork simply does not exist to unlock it efficiently.

Grant Canary described a different permitting problem: state-by-state inconsistency. He said U.S. wildfire increased from a 2.5 million-acre 10-year average in 1982–92 to about 7.5 million acres today, which he described as “an extra New Jersey” lost each year. In Montana, he said Mast has identified roughly 68 million tons of fire-killed trees, narrowed to six to eight million tons when excluding public lands and areas not accessible by roads. Mast’s first project was 4,000 tons.

The state-permitting contrast was sharp. Canary said Montana permitted Mast’s biomass-burial project in a couple of weeks. The state asked whether the project would affect groundwater; Mast said no. The company then had to handle communications, sage grouse compliance, stream-effect permits, and other normal requirements. By contrast, Canary said Idaho — often praised as a state where projects can move quickly — can take around 24 months to permit the relevant activity as a non-municipal landfill.

Mast also faces legal-adoption constraints on private land. Getting a Montana ranch family to sign legal documents may involve three generations around a kitchen table. Mast uses conservation easements for five acres out of a 2,000-acre ranch and provides an endowment of a few hundred thousand dollars, invested to pay for site visits that verify the stability of the carbon vault over the next hundred years or more. But conservation easements can raise hard family questions about burdens on the next generation.

For RESILIFT, the regulatory and policy barriers are different. At the federal level, Maiky Iberkleid made NFIP’s effect on incentives the central issue. At the local level, he contrasted Florida, which he said has streamlined permitting for home lifting, with New Jersey, where he said the permitting process became more complicated after Hurricane Sandy and many destroyed homes were rebuilt the same way as before. In his view, the local process can worsen the risk by making adaptation harder.

Both Mast and Cultivo rely on carbon in different ways, and both treated carbon markets as useful but unsettled.

Manuel Piñuela described carbon as an “amazing catalyst” at the ranch level. It pays for the J-curve of regeneration — the period when capital is being invested before the ranch’s fundamentals fully improve. But he did not present carbon as the whole business. As the asset improves, the ranch itself can become more valuable and other revenue streams can strengthen. Cultivo’s task is to ask whether the ranch-level revenue streams are healthy enough to provide cash yields that keep families and communities together with a higher-performing asset rather than a desertifying one.

He said he believes carbon will remain, though he would not predict the size of the market. He sees signs of convergence between voluntary and compliance markets locally, federally, and globally. Cultivo’s business shifts between markets to pursue the best internal rate of return.

He also pointed to a non-carbon pathway. Cultivo is managing what he described as the largest initiative toward a cattle supply chain in the United States for McDonald’s, a publicly available program whose name the transcript renders inconsistently as “Gracie” and “Gracey,” deploying $200 million into ranches across the country. He said those investments are for environmental attributes, not carbon credits, though the evidence base is converging with voluntary carbon markets.

Grant Canary objected to generic skepticism about “carbon credits.” Saying “I don’t believe in carbon credits,” he argued, is like saying “I don’t believe in interest.” The category is too broad. He said there are roughly 180 types of carbon credits across three buckets: nation-state, compliance, and voluntary markets. Mast operates in the voluntary carbon market, and it is selling captured carbon storage rather than avoided emissions. Trees have already captured the carbon; Mast buries the biomass and secures it, which Canary compared to direct air capture’s process of capturing carbon chemically and storing it.

He argued that the voluntary carbon market lacks clear guardrails. In his view, government creates markets by setting the playing rules. Without those rules, the current system has multiple registries, repeated diligence layers, and multiple parties asking for the same information. Canary named registries, registry contractors, buyer consortiums such as Frontier or Symbiosis, ratings agencies such as BeZero, Sylvera, and Calyx, and the buyer’s own review process. The result, he said, is cost and duplication without necessarily adding value at every step.

Canary’s expectation is that the voluntary market will become a compliance market. He pointed to California emissions-disclosure rules as a step toward measurement of scope 1, 2, and 3 emissions. His admonition was not to shame companies reporting and trying to act, but to shame the companies reporting nothing and doing nothing. “Measured gets done,” he said.

Carbon accounting, to Canary, is not administrative trivia. He compared the creation of generally accepted carbon-accounting principles to major historical advances such as the printing press or the cotton gin. The accounting rules determine whether environmental outputs from a 2,000- to 10,000-acre ranch — water retention, air purification, biodiversity, carbon storage — can become valued credits rather than uncompensated public benefits.

An audience question asked how companies like these pitch venture capital and what they learn from investor evaluation. The answers were less about storytelling than about matching time horizons.

Grant Canary said Mast has raised venture capital, but the fit depends on the product. Venture capital often wants a 10x return in 10 years. Forestry may take 7 to 10 years in the fastest productive forests, 20 years in West Coast timber, and 60 to 80 years in lower-productivity lands. Biomass burial changed the fit because Mast could complete construction and issue credits in nine months. Other carbon methodologies may not work under a venture timeline.

He also distinguished among project finance, venture capital, and private equity. Mast considered biochar, which Canary said is responsible for about 90% of carbon-removal credit deliveries. But for fire-killed trees, he saw problems. Building a $20 million, $50 million, or $100 million plant with a 20-year life can create pressure to move from burned forests into green forests to supply the plant. A small mobile biochar unit would process low volumes for years, even running multiple shifts. Canary said biochar may be a good fit for agricultural biomass, but not for Mast’s fire-killed-tree problem. Biomass burial was born from that project-finance reality.

Manuel Piñuela said this is his fourth venture and that scars from prior companies shaped Cultivo’s structure. Grassland regeneration does not fit the ordinary VC time horizon. Cultivo split its capital stack: corporate venture capital can invest at the holding-company level, while project-level funding comes from other sources of capital with a lower cost. That structure avoids mismatching investor expectations with the pace of land regeneration.

Maiky Iberkleid said RESILIFT faces a related scaling issue. The company is unlikely to grow as quickly as traditional venture investors require. It has had more productive conversations with double-bottom-line investors who want a return but also value climate adaptation or conservation. One investor’s analogy stuck with him: the firm does not look for home runs, it looks for base hits, and RESILIFT sounded like a base hit.

The common thread was not that environmental businesses cannot raise private capital. It was that the asset, revenue timing, and investor must be matched precisely. A ranch-regeneration project, a buried-biomass carbon project, and an automated house-lifting technology do not have the same capital needs even if all are environmental businesses.

The practical comparison across the three companies is sharper than a general argument for markets or mandates. Each entrepreneur described a different point of failure in turning environmental value into a transaction.

For Maiky Iberkleid, the failure is partly an incentive problem. RESILIFT is trying to sell adaptation to a market in which, according to Iberkleid, many homeowners believe subsidized flood insurance will absorb enough of the downside. The environmental and fiscal benefit of avoiding flood damage may be real, but his account suggests that the private signal to elevate a house is weakened before RESILIFT’s technology ever reaches the job site. The same government system that helps households recover can make it harder to create private demand for prevention.

For Grant Canary, the failure is partly a supply-chain and accounting problem. Mast is operating in landscapes where Canary says forests cannot be assumed to regenerate, seed supply is thin, nursery capacity is constrained, and carbon rules have moved away from crediting future removals against past emissions. Mast’s answer is to shorten the revenue timeline by storing carbon that trees have already captured, then using that revenue to finance reforestation. But Canary’s broader claim is that landowners will not produce public benefits at scale unless the market has credible accounting rules and pays them for those outputs.

For Manuel Piñuela, the failure is partly a transaction-cost and risk-underwriting problem. Cultivo’s ranchers may want to participate, and institutional investors may want durable returns, but the project must be specific enough — by biome, geography, data quality, and legal permission — to be investable. Piñuela’s pivot away from a global, all-biome platform toward North American grasslands was not a retreat from ambition so much as a narrowing of risk to match pension-fund capital.

That distinction matters for policy. Iberkleid’s critique of NFIP is that it masks risk and weakens private adaptation incentives. Piñuela’s request for predetermined approval documents is that they would reduce the cost of saying yes to ranch-led regeneration on leased public land. Canary’s call for carbon-market guardrails is that they would reduce duplicative diligence and help buyers trust what they are purchasing. Those are not the same regulatory prescription.

Canary’s broader warning was that unmanaged environmental systems will not necessarily self-correct. Forests, he argued, are increasingly caught in feedback loops. Globally, he said, wildfire acreage is down because grassland fires are down, but forest fires are rising sharply. Arctic forests are warming faster; tropical forests are becoming less humid because of logging and fragmented land ownership. In the car-repair metaphor he used, fire needs spark, air, and fuel. Warming increases lightning strikes; fire-killed forests leave much of the carbon still standing or lying as fuel; invasive species retain less moisture through summer. The result, in his view, is a repeating cycle.

Fretwell’s opening frame held through the examples: environmental markets do not form just because environmental benefits exist. They form when the benefit can be measured, when rights and permissions are clear enough, when transaction costs are low enough, when the buyer trusts the claim, and when the timing of revenue matches the timing of capital. In these cases, the missing piece was different each time: insurance incentives for flood adaptation, supply chain and accounting for post-fire reforestation, and risk narrowing plus legal permission for grassland regeneration.