Introducing MAHI

The Toha Network is piloting an innovative payment mechanism to support the regenerative economy.

MAHI is a digital token that enables payments for work in service to nature and climate. 

Through the purchase of MAHI, money moves from funders to frontline communities to repair and regenerate local landscapes. In return, MAHI gives confidence to funders that work was done, and can be used to secure rights to impact data (see our post on Toha’s dual-token system).

In te reo Māori, the Indigenous language of Aotearoa New Zealand, mahi refers to work, labour, and accomplishment. As an investable token, MAHI enables the funding and recognition of nature-based work that, all too often, is neglected by today’s economy. This includes farmers regenerating their land, whānau exercising kaitiakitanga on whenua Māori, or conservation groups working on a community restoration project.

We cannot afford to neglect this work any longer. We need all hands on deck to address the urgent challenges of climate change and biodiversity loss. By mobilising and coordinating funding, Toha hopes to foster the regeneration economy to enhance the quality and resilience of Aotearoa’s landscapes.

How do MAHI buyers know that work was done?

Verification is core to the Toha system. 

This is because future generations won’t thank us for misallocated funding. We need to invest effectively and competently. We need to know that funds are well spent, work is completed, and outcomes achieved. Otherwise, the confidence of funders, recipients and other stakeholders will drift away. 

MAHI mobilises data to prove that work was done. As such, MAHI enables the verification of actions, rather than outcomes. This makes MAHI an instance of action-based funding (also known as output-based funding) which supports activities such as nature repair and restoration, land stewardship, and invasive species management. 

The allocation of MAHI for frontline work is guided by pledge templates, designed by experts and knowledge holders, which set out the activities that must be undertaken to fulfil the pledge. For example, a community group might make a pledge to ecosource native seeds using the template that Ron Taiapa, Te Whare Wānanga o Awanui ā Rangi, has already developed for the Toha system. The community group then undertakes the activities which are specified in this template, and collect data that enables the verification of work. As such, each pledge is not only a commitment to regenerative action, it is also a commitment to collect data that enables proof of work. MAHI funds both types of work – that is, both making impact and collecting data. 

All actions and measurement data in the Toha system are reported with evidence. This may be photos with geolocation and time/date metadata, receipts for costs incurred, or lab results. Before any MAHI payments are released, the action and incurred costs are verified using this data. Also, to ensure that data is trustworthy, the identity of Toha Network members is authenticated by collecting and triangulating data. Toha’s data verification and authentication processes were tested in the East Coast Exchange (ECX), a regional test-case of the Toha system which launched in February 2023 (learn more in the ECX’s Programme Rules and Privacy Policy). Over time, Toha will extend these processes to include automated fraud detection, trust scoring, and peer-to-peer verification to sustain trust at scale.

If MAHI is only about action, what about outcomes?

MAHI is an instrument of action-based funding. This is distinct from outcome-based funding where payments are conditional on achieving pre-specified outcomes that result from such activities.

There is a longstanding discussion over the relative merits of funding actions versus outcomes. It is well-known that, even when it is administered competently, action-based funding doesn’t necessarily result in positive outcomes or impact. This is why many funders prefer outcome-based contracting, or payment for results, because it ensures that funding is strongly linked to measurable impact. Also, in Aotearoa New Zealand, the lack of data on outcomes is identified as a funding barrier for community conservation. Robust data on outcomes and impact may strengthen the confidence of funders.

MAHI is not designed to fund or track outcomes, but the wider Toha system is. This is a topic for future posts, suffice to say here that MAHI indirectly supports the development of outcomes-based funding processes in two ways. 

Firstly, the use of pledge templates ensures that the activities funded by MAHI sales are consistent with best-practice, as formalised by our template developers. This is no guarantee of successful outcomes, but each pledge template will prescribe activities that experts identify as strongly correlated with success. 

Secondly, MAHI will serve as a stepping stone to outcome-based funding in the Toha system by generating revenue, some of which will go toward R&D for impact data technologies. Currently, global and local markets lack sufficient infrastructure to implement outcomes-based funding at scale. For instance, standard metrics for biodiversity assessment are still emerging, and there is a shortage of market-ready measurement tools to cost-effectively track indigenous flora and fauna. However, a percentage of the revenue from MAHI sales will be earmarked for template developers to create that infrastructure, including the measurement tools which enable the verification of claimable impacts. We discuss this further below.

All that said, it is important to note that outcome-based funding has pros and cons, just like action-based funding does. For instance, it is characteristic of outcome-based funding to reallocate risks downstream onto project managers and workers. This can be useful for realigning incentives, but can also impose unfair burdens and demands on frontline communities. At the very least, careful design is critical. However, these risks have also prompted calls for greater use of action-based funding, such as direct funding of stewardship activities for Indigenous communities, as a just alternative to outcomes-based mechanisms like carbon credits and biodiversity credits. This is what MAHI enables.

How are the proceeds of MAHI sales used?

In the long run, we want as much of the proceeds of MAHI sales to go to frontline action and trust work as possible. Our aim is to minimise the level of intermediation and institutional layering to the greatest extent possible.

In the pilot phase, however, Toha needs to direct a portion of the proceeds to the development of the digital public infrastructure (DPI) that underpins the system, including our impact data technologies. This is critical for building the capabilities to implement outcome-based funding in the future. Ideally, the Toha system will collect a combination of data on action and outcomes, because this will initiate feedback loops that make nature-based work more effective and efficient over time, enabling Toha members to learn from what’s worked and what hasn’t. 

The stacked area chart below is indicative of what we believe to be a self-sustaining business model for the pilot phase of the Toha system. Over time, as impact data technologies are developed and platform infrastructure is built, we can dial down those system-level allocations.

In effect, we need to keep building the ship while we’re sailing it. Early investments in MAHI not only fund nature-based work, they also fund the system’s capabilities to measure and verify the outcomes that result from that work. Consequently, MAHI plays a critical role in the evolution of the Toha system toward better measurement of outcomes. We will publish an open platform roadmap soon that identifies what elements of digital public infrastructure are already built, and what additional capability needs to be agreed by the Toha Network.

What is the bigger picture for MAHI?

The aim of MAHI is to foster the regeneration economy. 

The regeneration economy is not something new, rather it is something that already exists. It includes every farmer who is trying to leave the land better than they found it. Every kaitiaki who is fulfilling their duties to improve the wellbeing of the land and its people. Every forester who is trialing forestry systems that build biodiversity as well as carbon. Everyone working on nature-based solutions for flood risk management, erosion stabilisation, coastal enhancement, and urban green infrastructure.

In short, it encompasses every commercial and social enterprise that directly depends upon the flourishing of nature for its own economic flourishing. In other countries, efforts have been made to articulate and quantify this economy, albeit under different names: 

• A pioneering US analysis of the ‘restoration economy’ defined it as ‘the economic output and jobs that are… created through environmental restoration, restoration-related conservation, and mitigation actions’. It concluded that, in 2014, the US ecological restoration sector directly employed ~126,000 workers and generated ~US$9.5 billion in economic output annually. It also found that the restoration economy supported as many as 33 jobs per $1 million invested, much more than the oil and gas industry at 5.2 jobs per $1 million invested.

• NatureScot, the public body responsible for natural heritage for the Scottish Government, undertook an assessment of nature-based jobs and skills in 2021. NatureScot found that jobs in the nature-based sector contributed about 195,000 jobs or 7.5% of Scotland’s workforce in 2019 (likely a conservative estimate). Furthermore, nature-based jobs also grew at more than five times the rate of all jobs in Scotland between 2015–19, accounting for one-third of all job growth in Scotland in this period.

In Aotearoa New Zealand, it is past time to recognise the regenerative economy as a distinct economic sector. It has similarities to the care economy, which encompasses healthcare, education and childcare, both paid and unpaid. It also overlaps with the infrastructure sector, insofar as natural infrastructure is often the most effective and cost-efficient way to manage public challenges like flood or erosion management. Like these sectors, the regenerative economy can, and should, develop vocational pathways that enable career progression through roles like project management, environmental research and data analysis, policy and planning. 

Above all, nature-based work should be supported by fair compensation. This enables more work to be done, and therefore the growth of a skilled workforce to repair and care for landscapes and seascapes. MAHI cannot guarantee funding for jobs for nature, but it can be an enabler, giving funders the confidence that their funds will make a measurable difference. 

Further reading

Marie Brown (2018). Transforming community conservation funding in New Zealand. The Catalyst Group. 

Jobs for Nature: a New Zealand Government programme to create jobs while ensuring environmental benefits.

Green Jobs for Nature: a regenerative economy website managed by the UK’s Chartered Institute of Ecology and Environmental Management.