Figuring out the carbon market with Danny Takhar

There’s a lot of existentialism when it comes to solving climate change, but there’s a lot of optimism too. For Danny Takhar, this duality is perhaps what prompted him to leave his career in digital marketing and pivot towards a cause that felt much bigger than his day-to-day with a life-long disease.

“I'm able to take my mind off of what I'm going through, personally, with my health, and put my effort towards something that's positive,” said Takhar. “[One] that I can see and feel.”

Life after search engine optimization

Takhar was an experienced digital marketer, initially starting up a business to support companies with search engine optimization and lead generation. But a motor vehicle accident, later followed by diagnosis of a rare, advanced-stage spinal disease — ankylosing spondylitis — left him looking to do a different kind of work.

“One of my doctors said, ‘Listen, you know, I'm worried about you — what are you going to do for work?’” said Takhar.

Soon after, he tells me, a Bloomberg article on carbon credits caught his attention. He grew interested in the carbon market ecosystem and embarked on a 14-month, self-guided research journey that would eventually lead to the start up of Climate Carbon — a full-service broker of carbon offsets, renewable energy credits, and carbon dioxide removal.

“I ran into a mentor from Germany, who told me, ‘Don't get in it for the money. There's plenty of money, but get in it for the change. You'll see,’” said Takhar.

The entrepreneur quickly found the work meaningful, largely because of the positive impact it had on communities and livelihoods around the world.

“We're big proponents of [supporting] [...] Africa, India, Pakistan: the [regions] that need funding the most, that may not be polluting the most,” said Takhar. “Pakistan, for example — they're only producing one percent of the world's emissions, but they've got flooded in. There's no aid. It's unbelievable.”

Brokering climate projects

At first, Takhar was frustrated by high brokerage fees in the projects he saw in his research.

He wanted to ensure that as a broker, he could ascribe a higher percentage of funding to the carbon projects that pay back to the communities who were developing them. While he didn’t disclose the specifics of his brokerage fees, the “good” standard in the industry hovers at about 60 percent of the sale returning to the community-based project developers.

“We're focused on high-quality projects that have community involvement, and a big chunk [of the sale] going towards them,” said Takhar.

The founder spoke at length about the diversity of projects he’s been involved with at Climate Carbon, from renewable energy credits to fund villages in Zambia or tree planting projects in the Canadian Prairies. And there’s no shortage of notable buyers, either.

“We had reached out to Volkswagen, sent them across a list — they're interested in four to five projects that we have access to,” said Takhar. “Even though Volkswagen, they've cheated the system before with their Dieselgate, [...] everyone's hammering on them to do more. It's good to see that they're doing more.”

Takhar emphasized that he doesn’t sell to just anyone. Take the oil and gas industry, for example. Despite public goals to reach net zero, recent clawbacks on those claims by industry titans have generally left the ecosystem skeptical of their willingness for true emissions reductions, including Takhar.

“We're very picky about the oil and gas industry, because they do a lot of carbon credit trading,” he said, referring to speculation that jumps the price of the credit, allowing the trader to profit upon sale to another party. “They don't do the retirements, and the retirements are needed to get those emissions lower.”

A fraught market with good intentions

The ecosystem as a whole grapples with difficulties around the legitimacy of emissions reduction. One of the largest carbon credit registries, Verra, recently came under fire for issuing credits that The Guardian found to be worthless earlier this year. It’s a discretionary challenge for Takhar, who has to decide on which projects to support in a supply-constrained market.

“We get a lot of people from Papua New Guinea reaching out to us, that have land from 1,000 hectares to 7,000 hectares each, but their government was caught fraudulently selling documentation,” said Takhar. He opted not to pursue this project.

Trust is a large element of the work, and Takhar’s trust has also unfortunately been misplaced. Although he received training from the Greenhouse Gas Management Institute to support his due diligence practice and maintains high standards of literacy on market developments, fraud still gets through, particularly given the fragmentation of the market.

“We did do one renewable deal and, unfortunately, it was a fraudulent deal,” said Takhar. “There's a lot of commissions owed to us for it — it's gone into the Oregon courts. I don't believe I'll get a single penny out of it. But it taught me a lesson — you can't just believe anybody, and to tighten up the KYC [know your customer].”

But Takhar is still convinced that this is the change he wants to facilitate, given the greater proportion of positive impact that he sees relative to the negative ones.

“I have a disability that’s not curable,” said Takhar. “So the longevity of life is — it's difficult to say, but I don't know if I'm gonna be here in four years or five years. So I just want to make a positive change. And, yeah, I want to be my legacy [to be] that I did something to save a life or save lives.”

His company was recently acquired by New York-based Bluesphere Ventures, a decision he made out of both an interest to scale the impact of his work and to be better supported in his operations.

“I've got a small daughter, a three-and-a-half-year-old daughter, and I've got a 16-year-old son,” said Takhar. “And the disability has taken a big toll on me. So [the company is] just something to pass on to the next generation.”