Can blockchain technology stop global warming?
See: Crypto and Climate Change: Can Blockchain Technology Stop Global Warming? | Crypto Mile
Blockchain technology has been hailed as the future of global finance, but now a new subsection of the cryptocurrency ecosystem, called Regenerative Finance, is claiming it will solve the imminent threat of global warming.
In mid-November, heads of state met at Cop 27 in Egypt to discuss a framework for dealing with the immediate threat of global warming.
However, the commitment of nation-states to tackle what could become an existential threat to humanity remains vague and indecisive.
Environmental and political activist George Monbiot gave a damning assessment of what was achieved at Cop 27, saying: “Our leaders had one last chance to stop climate collapse. They failed every one of us.”
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Can blockchain-based industries at this late hour intercede and offer a more effective and efficient alternative to the prevailing “greenwashing” that has stalled efforts to mitigate climate change?
This week’s episode of The Crypto Mile checks in with Paul Gambill, CEO of carbon removal marketplace Nori, to find out about Regenerative Finance, or ReFi, which aims to use the innovations of blockchain technology to help the world transition to a low-carbon economy .
What is ReFi?
Yahoo Finance asked Gambill to provide a definition of Regenerative Finance, or ReFI, he said:
“It really started to take off in 2021 with the idea that we can use blockchain and crypto tools to create platforms … that help solve climate change and other environmental problems.”
UN IPCC report on climate change
According to a recent UN report on climate change, global temperatures have already risen 1.1ºC above pre-industrial levels, and by 2030 an estimated 700 million people will be at risk of displacement due to drought alone.
The report explains how the world is on a “fast track” to disaster unless action is taken to reduce the amount of CO2 in the atmosphere.
UN Secretary-General António Guterres has warned that it is “now or never” for the world to limit global warming to 1.5 degrees.
The UN’s climate panel (IPCC) said that reductions in the amount of carbon in the atmosphere can be achieved through scalable changes such as the electrification of transport and increased carbon uptake and storage through the use of nature.
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One way to incentivize industry to reduce its carbon footprint is to put a price on carbon and create “carbon markets” where companies can pay for CO2 removal to offset their emissions.
Paul Gambill argues that the challenges facing the carbon market can be solved “elegantly” with blockchain technology.
Speaking to Yahoo Finance, he said: “In 2015, when I first researched this space, I looked at how big the market was.
“I read analyst reports to try to understand how much money people were paying for carbon and how many tons of CO2 were being paid for.
“What I discovered is that there are both primary and secondary sales of CO2.
“Why would you want to sell a tonne of CO2 more than once? Once the action is done, the CO2 is cancelled, it’s removed and the benefit to the planet is done. Why would you want a secondary market after that?
“So, if we want to have a real significant impact, we need to redesign the carbon market from the ground up using blockchain technology that can transparently show that every dollar spent on carbon results in net new carbon coming out of the atmosphere.”
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Nori, a blockchain-based csolution for removing arbon
Nori is a crypto platform that connects companies that use technology or farming techniques to remove carbon from the atmosphere with companies that want to become carbon neutral, or even carbon negative.
Nori has created a carbon removal marketplace, starting with regenerative agriculture projects that store carbon in the soil, to help repair the planet’s climate.
Using the Nori method of CO2 sequestration, when carbon is removed from the air, an asset called an NRT, or Nori Removal Ton, is created.
This is actually an NFT that is sold from the supplier (a farmer who removes tons of carbon from the atmosphere) to the buyer (a company that needs to offset the carbon footprint) it goes into the buyer’s digital wallet. It is non-transferable and is owned by the buyer forever and is visible so that the company can demonstrate to its stakeholders that it has fulfilled its carbon removal obligations.
Nori founder Paul Gambill said: “Nori has been around a lot longer, before there was even a thing called ReFi.
“We started in 2017 and what we are is a carbon removal marketplace.”
“It’s a recognition that climate change is a pretty simple problem. In fact, there’s way too much carbon dioxide floating around up there in the atmosphere.
“Carbon is not evil or immoral or anything like that, it’s just in the wrong place and we need to move it.
“If we want to get people to move carbon, we need some kind of incentive to do it.
“What our marketplace does is we connect the people who are moving carbon dioxide out of the atmosphere with buyers, which are companies and businesses that are trying to become carbon neutral.
Carbon removal
Gambill states that there is only one commercially viable and scalable method of removing carbon from the atmosphere at present, and that is through “soil organic carbon processes”.
Explaining the ‘soil organic carbon’ process, the Nori boss said: “This means that farmers change farming practices in a way that ends up building up the organic matter in the soil, increasing the amount of microbes and fungi in the soil. This is called regenerative agriculture that increases the amount of carbon in the soil”
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How to use decentralized finance to invest in ReFi measures
One way investors can get involved in ReFi is to use decentralized finance platforms like Cargo Finance and become a liquidity provider for regenerative economy initiatives like Toucan.
Co-founder of Cargo Finance Jaasir Ali explained: “An investor can deposit Nature Carbon Tonne from tokens from toucan.earth or Moss Carbon Credit tokens from moss.earth and start receiving returns together with cUSD or Celo starting today.”
In light of the collapse of FTX and subsequent freezing of customer withdrawals on several crypto lending platforms, Ali emphasized that users are always in control of their money when using DeFi products such as Cargo Finance. Funds always remain on individual wallets and can be withdrawn at any time.
He added: “ReFi is a growing industry, where circular economies and nature-backed assets are being realized. There are a number of blockchain projects promoting community development around these ideas, such as Celo and ChangeBlock.”
Rebalance the Earth
Another example of an initiative using blockchain technology to “leverage technology and communities to protect keystone species and support ecosystems” is Rebalance Earth.
Yahoo Finance spoke with crypto influencer Sang Vu who described Rebalance Earth as one of the more viable blockchain use cases in the ReFi space.
She said: “The goal of Rebalance Earth is to protect African forest elephants, which contribute significantly to carbon capture and sequestration, valued at $1.75 million per elephant over their 60-year lifespan by the International Monetary Fund (IMF).
“Given this high value, entities that need to offset their carbon footprint can finance the conservation of the elephants via smart contracts on the blockchain.
“This creates a triple win situation: for the elephants, who are listed as critically endangered, for the local rangers and communities paid to protect the elephants, and for the entities that have to offset their carbon emissions.
“There is also a convergence of advanced technology: Blockchain Tokenization, Internet of Things (IoT) sensors and AI to track the carbon capture and sequestration process.
“I see that the convergence of such advanced technologies will be crucial in the fight against climate change to create transparent, traceable, traceable systems and processes that incentivize the right behavior.”
A study published in Nature states that forests where elephants live capture and store 7% more carbon compared to forests where they are not present.
In September 2020, the International Monetary Fund (IMF) published research estimating that each elephant contributes more than $1.75 million worth of carbon sequestration services over a 60-year lifespan.
