Nation States are very ineffective at combatting climate change. A borderless problem warrants a global decentralized solution. Open Forest Protocol has a blockchain native product for monitoring, reporting and verifying carbon credits earned by protecting forests.
Climate x Crypto: Decentralizing Climate Solutions
Every February, thought leaders in the blockchain space convene at ETHDenver to showcase solutions to pressing problems. Currently, nation states are the main bodies coordinating actions to mitigate climate change. Not surprisingly, attempts to stem climate change are fragmented and largely ineffective.
Regenerative Finance or ReFi is a new mechanism producing promising results. ReFi sits at the nexus of climate, crypto and future. It blends the best climate change solutions with cryptography tools.
The scientific community knows that trees and forests capture carbon. They are the lungs of the Earth, absorbing CO2 and emitting O2. Cutting down trees is a two-fold setback. Annually, the world loses a forest the size of Greece.
Until recently, the financial community did not recognize the benefits forests provided to the global community. This ‘tragedy of the commons’ is a problem in economics that occurs when individuals neglect the well-being of society in the pursuit of financial gain.
To date, pricing carbon is the most widespread effort to incorporate the commons into the marketplace. Carbon credits are still a voluntary piece of the marketplace though. In theory, credits incentivize corporations to preserve forests or to replant trees. In practice, carbon credits are a small piece of world financial markets.
Seventy percent of global GDP flows through corporations who have a goal for ‘Net Zero’ carbon emissions. These corporations will first look to reduce emissions in supply chains and operations. Once they streamline operations, they will look to offset the remainder of their emissions by purchasing carbon credits.
This increased interest in offsetting should lead to higher quality offsets and higher costs for offsets. Forecasts have the carbon market growing to $50 billion by 2030 and $500 billion by 2050.
MRV or monitoring, reporting, and verifying is a crucial part of pricing carbon credits. The legacy system is slow and expensive. Instead of taking years to verify a project, it can now be done in 40 days. How? With ReFi!
In six months of existence, ReFi has captured 5% of global carbon credits. Climate solutions are officially on chain! Now, there is an immutable record of a verified asset/tree whose performance is monitored. A universal standard of accounting for carbon credits exists.
The Open Forest Protocol will launch a dashboard in May to track this market. It will have a very simple user experience [rare in the blockchain space] that allows the average person to interact with the blockchain.
Under the hood, there will be more complex crypto tools such as tokens, minted Open Carbon Credits and a carbon backed currency. Tokens will incentivize auditors to verify projects and their performance. Blockchain users will be able to trade credits for other commodities. The network of users will receive dividends from using this carbon currency.
All this opens the door for more organizations to participate in the carbon market. Already, Celo offers nature backed currencies. Nori allows farmers to sell carbon removal assets on a blockchain. Open Forest Protocol knows Klima DAO wants to buy more Open Carbon Credits.
Suddenly, a $50 billion carbon credit marketplace is closer than ever.
Join the Open Forest Protocol as a project operator or validator.
Follow #ReFi on twitter.