How Ethereum Is Giving Sovereignty to Natural Resources

Transcript

sorry for the delay uh it appears that my macbook the actual like plug-in didn't work so i'm gonna do a very abbreviated version of this talk so that the panel is ready so basically i'm covering a number of web3 projects that are working on one reducing carbon emissions but also getting to the point where we can actually remove 1.5 trillion tons of carbon so let's just set the scene uh let me make you all depressed a bit in 40 years an area the size of europe has been deforested at this rate the world's rainforest will be gone in 78 years like let's hope that doesn't continue

and then a report from the un estimated that dozens of species are going extinct every day with as many as 30 to 50 percent extinct by 2050. 21.5 million people have been displaced by climate change related disasters since 2010 and on average every month we eat one lego of plastic which is about 44 pounds in a lifetime so what's happening uh on october 31st or in about a week and a half is a lot of people 20 000 in total are gonna meet in paris or actually in glasgow to discuss the paris agreement's one and a half degree target reduction but very few countries actually have

policies in place to hit those targets so people estimate voluntary action through the carbon markets will need to increase by 15 fold and even 100 fold by 2050 from the existing 2020 levels so how do we actually get to negative emissions well for every carbon ton we emit we need to remove one carbon ton and then we need to actually remove 1.5 trillion tons by 2050. so it actually is not simple here's some estimates that mckinsey presents but in all we are not on the right track since we're emitting about 40 billion tons or 40 gigatons of carbon dioxide a

year so if it's business as usual i guess we'll have to see what happens but if we actually want to hit those goals we need to be removing 1.5 trillion tons by 2050. so yeah this would have worked but it was a gif each it's a nice visualization of what one metric ton looks like one metric ton is about 33 feet in diameter so it's so it's essentially a big ball and if you were to imagine 50 million tons which is what new york city emits in a year as an image it would essentially reach the clouds and cover all of brooklyn

you'll have to check out the video on your own but there are ways in which web 3 is already approaching these and these these methods actually align with a lot of carbon reduction methods so one you have voluntary carbon markets two you have reforestation and aforestation so you know where there is force removed adding forests and where there aren't forests adding forests and there's also regenerative agriculture and then finally something i want to talk about which is a recent trend is green currency so starting with voluntary carbon markets first it's worth knowing what a carbon credit is but it is certified it's a certified certificate that represents the quantities of greenhouse gases that have

been kept out of the air or removed from it so one carbon credit is supposed to equal one metric ton of carbon dioxide granted not every carbon credit is created equal and there are some better carbon credits than others but it's traded on an open market and there are a number of different markets the current weighted carbon price right now is about 35 and has been increasing pretty much steadily since um about 10 years ago and there's actually a lot of benefits so the reason why i'm talking about voluntary carbon credit markets is because the other option would be a carbon tax but let's talk about voluntary markets because

one they they're actually you know a way of infusing private capital into things that benefit biodiversity pollution prevention public health improvements and job creation and it's also been increasing you know at least 20 in 2020 and it's a 272 billion dollar market however some would argue that a lot of the carbons credits that are trading are just going back and forth and they're never retired so i'll tell you a little bit about retiring in a second red plus that's this is just an acronym for reducing emissions from deforestation and forest degradation projects so it actually is missing to have

but red plus accounts for about 53 of total issuances and retirements this is an example of um it's it's in the state of akker brazil and it's an example of a red carbon credit there are some problems though so the market is characterized by low liquidity scarce financing an adequate risk management services and limited data availability so there are two main standards of issuing carbon credits there's the gold standard and vera's vcs vera represents you know three quarters of all carbon credits issued gold standard another 20 and then there's some other issuing bodies

however what happens is a lot of co2 certificates trade hands many times and even a lot happen off book and then some are purchased to add to a balance sheet and then never retired so according to mckinsey you can see from this chart actually only half of carbon credits purchase in the last year were retired so let's say you're an oil company and you want some positive pr you could purchase a ton of carbon credits not retire them add them to your balance sheet and then sell them later if they increase in price this isn't actually solving a problem this is actually what gold standards registry looks like you can you know select issuances retirements you can go by the vintage

the quantity the type of project the issue and state and you'll notice that there's not a lot of information on some of these and some of them don't even actually have enough environmental monitors checking them so why web3 one it can solve a double counting problem it anything that is issued as a carbon credit or a token really on ethereum if it were to be retired it could actually be burned and that would be captured on chain this you know i'm here at an ethereum conference so i don't need to go too much into this but anyone who's played around with yield farming mechanisms understands that you know with rewards you incentivize a lot of activity and liquidity

and the other great thing though is you can create through an erc20 contract or something else the standardization are standardized carbon credits which are tradable right now carbon credits largely exist uh well either through vera but besides that there isn't really a standard that is globally traded and then finally you know with open source software and composability you can build upon other ideas that people have come up with before you so i heard actually folks from the toucan protocol are here i'd love to speak with you after but two cam protocol recently just actually on monday launched a carbon bridge and so they're using polygon network

which is an evm compatible side chain whatever your semantic preference is but what it does is it allows people to port over their carbon credits and tokenize them on polygon currently they're only offering carbon credits from the vera registry um but in the future they're going to also offer the gold standard and other registration bodies but what it also does is it enables you to pool these tokens and create price discoveries so their first pool is actually called bct this is this is an example of what it looks like um but yeah so you can actually start moving your carbon credits that exist on

registries over um and so they launched on monday this was from a couple hours ago they already have 6.3 million tons of carbon now tokenized on polygons so they've really they basically use bct as a base carbon ton and so one carbon ton equals one bct but it's pretty amazing so in a couple days 6.3 million tons are now issued on polygon and ethereum which is 12 remember that picture i showed you earlier that's 12 of new york city's annual carbon emissions so it's not insignificant and now you have to ask why is all this

being bridged over um on the two-cam protocol i was actually speaking with someone earlier who mentioned that a lot of it is you know to earn rewards from another protocol and application called climadow i i also think there might be a few klima or climadow folks in the crowd i'd love to speak with you but what they do is they are essentially creating these pools um so there's a climate bct pool there's a bct usd pool and for staking or bonding you can earn climate rewards so it's a pretty you know flagrant transparent defy idea of how do you incentivize liquidity you offer yield yield tokens and reward but the idea is that you're going to

earn compounding interest and then long term if you're holding climate which is backed by carbon you're also benefiting from the increased pricing of carbon credits and as i showed you earlier carbon credits have been going up over time it's a pretty simple defy interface you connect your metamask wallet or use wallet connect to connect to a polygon network you can redeem the a clima bond carbon which is bct from the two cam protocol or you can stake clima it's really um awesome as of today you can now get clima on sushi swap and

yeah essentially taking climate right away so i want to talk about number two is reforestation at a4 station i think i have like maybe two minutes left so i'll be quick um one example is rewilder so this is a project that is essentially instead of working with voluntary carbon markets they're like let's just use money to buy land in uh in brazil and so they're selling nfts the nfts are available as of this week you can buy them for a minimum of one eath all the way up to 30 eath and what they do is they give you a portion of this land that they're going to buy they estimate that you know 25 000 dial will give you a small um

hectare of land in brazil it's also a non-profit entity and then they're using some of the funds to basically pay for rangers to make sure that the land is actually being protected and there's no you know deforesting going on another great example is nori so nori is they just raised another four million dollars from placeholder ventures but their plan is to actually focus on croplands and cover crops so here's an example a farmer provides an operating data to nouri saying that they're provide that they're using this methodology which could actually reduce uh 4.8 gigatons of carbon dioxide annually it's then very verified by an

independent third party and then once that's verified it goes through further verification through a usda funded to uh it's like an open source software tool to determine the soil organic carbon content and then nori issues a certificate based of the amount of co2 they sequestered and it's called the dory carbon removal tons or nrts and then the nrts are sold for nori so it seems a little complicated but it essentially involves a person you know claiming that they've used a farming practice that reduces carbon getting nrts in return and then swapping those nrts for nori which can be sold for cash here's an example of the carbon renewable it includes 16 nrts which can be sold on

an open market for 16 norae tokens i'd be remiss to not mention my own project so i'm also working on a dow that is essentially giving street trees in new york city an ethereum address you can read about it more on jamesbech.mirror but yeah it's an open source map that each tree represents an ethereum address time is up one final one final closing note so um a number of projects especially stable coin projects are talking about how they're using carbon credits and also repurchase and rewilded land to back uh stable coins um so cello is entering the x prize

competition it's 100 million prizes by elon musk and they're actually intending on having 40 of the seller reserves to be backed by carbon credits maker dow roon christensen recently had a proposal and he made it was a case for clean money it's a long winding post but two things i found interesting is that they're going to be using projects like centrifuge to use real world assets and safe productive climate aligned assets or for example corporate bonds they also you know have talked about ideas of backing dye with status signal nfts that represent these climate-aligned assets so

i'm gonna skip through um but you know i just wanted to have one closing notes so money is pretty abstract i'm here in the ethereum community because it's we get to think about money every day but this is kind of a call to think about how we embody the money we transact with daily and what it what backs it and what represents it thank you you can read this post in more detail jamespec.mirror.xyz follow me on twitter i work at consensus so if you have questions about metamask or infura i'm also happy to talk thanks everyone and thanks to the organizers you