Wil Srubar, PhD Founder and Managing Director | Salmeron Barnes Founder and Managing Director | Adam Orens Founder and Managing Director | Michele Grieshaber, PhD Strategic Advisor
Think Wood: As an organization, what is Aureus Earth? How do you answer that question for those who are new to carbon accounting and financial solutions?
Aureus Earth Leadership Team: Aureus Earth monetizes the built environment’s ability to combat climate change. Our central focus and mission are to decarbonize the construction industry by providing financial incentives to builders and developers, encouraging them to use carbon-storing materials, like mass timber, in non-residential and multifamily buildings. Aureus Earth quantifies and values the carbon stored in the building project, then issues carbon offsets on the basis of the amount of biogenic carbon stored in the building. The carbon offsets can be monetized and sold to help reduce the cost of building with mass timber.
What kind of team did you need to develop this new way of quantifying carbon storage?
We certainly have a unique team with a robust set of expertise spanning alternative construction materials, finance, and strategy. Together, we’ve worked on a model that we think is a win-win for those who want to build with greener materials and for those who wish to purchase carbon offsets that are demonstrably transparent, high quality, and durable.
So, are you creating a new carbon market?
We are not a carbon market, but we do work with carbon marketplaces and exchanges to essentially sell offsets that are generated from the projects we support. We do that by financially incentivizing the choice of climate-positive materials and verifying and monetizing the carbon stored in the mass timber elements.
Who would buy these carbon offsets?
They can include individuals, corporations, or other organizations that wish to offset their current or past carbon emissions through voluntary action—and in some instances, companies are legally mandated to offset their emissions.
How will this work for architects, developers and other building professionals? What are the steps to issue the carbon offsets for a mass timber building?
Aureus Earth issues carbon offsets on the basis of biogenic carbon stored in a mass timber building. The first step is carbon storage calculations. We quantify how much carbon will be stored through the use of mass timber used in structural elements—which are unlikely to be altered for the duration of the building’s lifetime—as we want to avoid leakage. The stored carbon is then converted into carbon offset equivalents based on our Mass Timber Building Protocol (MTBP). Aureus Earth matches these carbon offsets with potential buyers of carbon offsets and provides the proceeds to the building owner.
So can a developer or owner get a cash rebate for choosing a carbon-storing material like wood?
Aureus Earth helps builders and developers offset the green premium associated with sustainable building materials, such as mass timber. The offsets we issue can be retained by the building owner or sold on a carbon market. In the latter case, the builder essentially gets a “cash rebate” for choosing to use a carbon-storing material like wood.
You completed a pilot of the program with the University of Washington’s Foster School of Business—providing carbon offsets for the newly completed Founders Hall mass timber building as a proof of concept. Can you elaborate on that project?
In the UW Foster School project, Aureus Earth demonstrated how to use a sound and vetted scientific method to figure out the amount of carbon stored in a building and do what we call an end-to-end transaction. We demonstrated a few novel concepts with this pilot. First, we demonstrated that science-based methods can be used to calculate the amount of biogenic carbon stored in mass timber for a specified—and guaranteed—period of time. Offsets were issued on this basis, taking that amount of carbon stored and then subtracting emissions from harvesting, manufacturing and transporting the timber. Second, the carbon in the building can be considered as physical property, like a mineral or wind right. So, we worked with a premier title company to create title and access rights to the carbon that were recorded with county authorities and could serve as the basis for transferring the asset to another party. And third, the process was audited by a well-recognized audit firm to verify the whole process.
Why are you starting with mass timber buildings and why are they a good choice for this incentive program?
Aureus Earth prioritizes new construction methods and practices that can turn buildings into a positive force to reverse climate change. Mass timber has the potential to do just that by cutting emissions from cement and steel production. And buildings constructed with mass timber can be thought of as carbon sinks that hold onto carbon for the lifetime of the building and beyond. When it’s time to take the building down, the reuse of mass timber elements is likely to be attractive in the future, creating a secondary market for the mass timber and keeping it out of landfills.
Are there minimum standards a mass timber building must meet to be part of the program?
To qualify, a project must use mass timber such as CLT or glulam and be a commercial nonresidential or multifamily residential building of over 20,000 square feet.
How much does this service or process cost? Can it offer savings in the long run?
Building owners do not pay to work with Aureus Earth, instead, they receive revenue for the carbon offsets that represent the amount of carbon stored in their building project. One great benefit of this program is it can reduce the green premium sometimes associated with using more materials that store carbon. As the market for high-quality carbon removal offsets grows, the amount of the green premium that the offsetting revenue can address will improve even more. Today, we’ve found that even a small percentage of the cost is enough to provide building owners with a reason to consider climate-positive materials, like mass timber.
How does this program compare to other green building programs? Will it be something a building owner or company can promote as part of its commitment to fighting climate change?
We believe there is a market for buildings that store carbon and we’re looking at developing programmatic recognition as we scale. In the meantime, buildings that work with Aureus Earth can get the dual benefit—the offsetting revenue from working with Aureus Earth and the ability to apply for LEED or BREEAM certification as well. The difference is in the Aureus Earth case they will get paid. For the other certifications, they must pay a fee.
Most folks in the building industry agree we need to tackle climate change—but why are carbon-storing incentives just as critical as energy and operational efficiency?
Think of it this way—there are estimates indicating that the equivalent of a New York City will be added to the planet every 35 days for the next 40 years. That equates to at least 600 billion square feet of new buildings every decade or more. Without intervention, without these types of incentives and carbon-storing materials, conventional construction will eat up nearly two-thirds of the remaining global carbon budget alone—if we are to meet the 1.5 degrees Celsius target limit.
Tackling climate change can be overwhelming, especially for the upcoming generation of professionals. Any words of advice?
AE Team Member Michele Grieshaber: As a researcher and university lecturer, I’ve been asked this exact question. It can be overwhelming hearing bad news about the climate, especially as a young person—and it might sometimes be hard to feel hopeful. First of all, I will say this, and I cannot remember where I read this, so it’s not my original idea: to address climate change we are looking for a silver buckshot, not a silver bullet. In the case of Aureus Earth, we are tackling one important component and that’s improving the amount of carbon stored in our buildings. Others are looking at major boosts to energy efficiency or alternative fuel sources. And outside the building industry, efforts are being made as well. I believe we can find some solace in the cumulative effect of many different solutions.
What is the future outlook for Aureus Earth?
Aureus Earth wants to move beyond the carbon offset to the carbon asset. We are currently exploring how we can transform biogenic carbon stored in mass timber construction into a real, transferable, and depreciable asset. In the next decade, we believe real-estate-backed, climate-positive financial instruments will become the next “mineral rights.”