Building Web3 Native Infrastructure for the Climate Crisis

Transcript

ladies and gentlemen I will follow up with a new presentation by Max Max uh the floor is yours thank you so much so good morning everyone um I know it's an early morning for you guys on day two of ethereum CC so appreciate you guys being here uh really excited to share some of these uh ideas and sort of structures with you so my name is Max I'm the founder and CEO of a company called carbon base and today we're talking about how do we build Next Generation carbon registries so at a high level um for me personally the key desire for us is actually to create a stable economy over the next few years that can successfully employ millions of people

and drive billions of dollars into the carbon removal space this is kind of the key kpi that we wake up every morning and measure ourselves against in order to do this we need to think about kind of the macro Trends powering our society today that was not here a few years ago and I think we're actually at this amazing Tipping Point between institutional awareness and action large financial and corporate participation and finally Sovereign wealth fund and Central Bank activity so for you guys in the space who have heard about carbon credits but haven't really seen this ecosystem in detail this is a one slide visualization of how this whole thing works there are four key types of players in the carbon markets there are people who are the

Registries who actually do all of the hard work auditing and verifying the claims made by project developers we have what I call carbon miners people actually who spend a lot of time effort and money putting carbon and ground and actually trying to get recognition for it we have Brokers people who actually help Finance some of these projects today and actually also do a lot of facilitation and sales and finally we have the buyers the buyers the logos we recognize people like Salesforce shell PWC Microsoft actually spending money on buying carbon but I want to focus here keyly on this idea of a registry these Registries are super powerful entities they are kind of the central banks of the carbon economy space the reason for that is that they

have the decision and the ability to choose what types of activities result in credit creation right you use a blockchain metaphor they are the definition of the economic protocol they have the ability to decide if your action is worth being economically incentivized or not and the mechanical things they do are that actually they evaluate the projects they physically mint the credits on their holding of the account they facilitate the account management they allow you to transfer credits between entities and also they provide an auditorial of Destruction showing people that there actually has been credit retirement at some point these four entities constitute 97 of the entire carbon creation space today so let's look at this on a map right

where are these activities happening and where are the Registries located and if you look at this map in you know very quick uh understanding you see that there's concentration on the Registries here in the United States and one in Switzerland this is kind of where the world is today these huge circles I've drawn in South America and Africa and in Asia do not have local Registries this to me is a major area of Interest right because if you look at the coloring of the map this is where project development is happening on the ground you see a huge dense dark colors in the developing and EM markets of the world so if we look closer at this this is actually something I find absolutely fascinating the majority of the projects registered on Vera and gold which

together constitute about 90 something percent of the current markets are concentrated in Asia right look at this 69 of projects that Vera come from Asia 75 of the projects come from gold however all of the project developers have to come to the west and then basically get in line to get Authentication so what are we doing we're hoping to fill this relatively large gap and actually provide closer to home experiences for the project developers out east and also accelerate and speed up the process dramatically so first of all I just want to mention you know as a Chinese looking person I spent some time in Asia recently and I think that there is this incredible need to decarbonize if you look at the right

hand so left hand graph you see that China alone constitutes 27 of global emissions compared to about 11 for the United States India alone counts about 6.6 emissions bigger than Continental Europe right and Indonesia is bigger than Russia and then Japan and Brazil are kind of comparable so if we were to add these four countries together China India Indonesia and Japan would have about 40 plus percent of global missions in four countries the second is an owner you know sort of State this in explicit terms the desire for China to decarbonize as a country is a game-changing event you know I wrote a master's thesis in 2016 about the political economy of U.S and China as

they try to decarbonize and my thesis takeaway right my tldr was that if and when China actually decides to really aggressively go after decarbonization this is going to move the rest of the market and the reason for that is because China's policy structure is set up in a way where the business interest cannot hold back the will of the policy right in the U.S you have a very strong lobbying committee you actually have the ability to serve change the agenda for the legislator based on your economic requirements in China the government is not opposed to steamrolling through economic interest on the way to policy destination and climate change is going to be a tension between the corporate interest and the government interest so I think you know that's kind of how I phrase this particular phenomenon

second as most you guys have seen this space we expect huge market growth right right now the carbon Market industry is roughly one two three billion dollars we need to get to like hundreds of billions of dollars in the next six seven years so I expect there to be far more institutional guardrails and also um sort of requirements to help companies actually facilitate and get on this journey so just kind of break down a few technical slides you know a lot of people we present to actually come from the climate change and environmental Finance world the first question to ask us is is a blockchain necessary right I've heard a lot of fancy you know ridiculous use of blockchain is this actually something that we need for ourselves

and my answer is actually climate change is the killer application for blockchain it is the ability to participate in a globally recognized Market that involves some of the biggest players in the world that also is not a security these carbon credits are digital Commodities and finally has ability to actually help hundreds of millions of people's lives like through an economic design system that's really what the thing of blockchain is good at or blockchain compared to AI is to be a data scientist AI is an efficiency tool AI is one person plus AI Suite equals output of 100 people here is one blockchain system helps coordinate the activities of 100 people to be more far more in sync and related to one another

so thinking about this from a sort of structural feature perspective and there's something I'd love to do a q a with you guys on what are the things we can uniquely do if we have a digital native registry compared to a traditional registry and I mean we've had conversations with go standard and Vera and they're fantastic people they are pioneers actually in creating the opportunity for us to even Define value in a carbon space but here's four things I think you can do you can't do today the first is you can have a digital native account system today it costs entire you know takes time and effort to maintain the registry accounts for individual corporates but if you think about how easy it is for you to set up a metamask account we can actually generate individual wallet addresses for every individual person on the planet

and every corporation on planet basically for free and that's something that I think can easily add address systems for hundreds of millions of people the second is creating a publicly available evidence Ledger and here there's a reference to the guardian article that came out a few you know months ago sort of cast a dark light on the sort of problem of over issuance my view is that sunlight is the best disinfectant and what that means is that if you are able to put whatever you're doing publicly for you know everyone to see and give out even a bounty system for people to find errors with your system then you will have a lot of people actively participating to make sure that whatever you put in public is

going to be real transparent and credible third is obviously there's going to be a lot of ways to do digital mrv so you have far more data Rich inputs actually verifying and securing your issuance of claims I think this is also something we can you know very easily understand and the fourth one the one I'm most excited about is the concept of developing our carbon App Store so today there are no really readily usable apis on top of these Registries and as a result the only people who can really participate in the registry activities people who actually wake up in the morning go to the registry website and try to figure out how to buy some credits right that's a very small percentage of people if we have the Uber lime you know ubereats like deliveroo all these kind of like consumer facing

applications with 100 million users already embed uh one cent five cent Ten Cent ability for you to neutralize your meal your transportation your housing Logistics you can actually have way larger user engagement and we're not gonna get there by actually forcing everyone to go and calculate their carbon footprint and then do something individual action by it we have to embed ourselves into the lifestyle stream of the human being and this is what the App Store model really allows us to do so a few more things uh we're spending a lot of time on building an active recording process for building trust we think that this is going to allow us the digital transformation tool is going to allow us to boost the consumer carbon economy market which today is still very small and limited

um and we also hope to create and stimulate this like larger economic cycle you know here just show of hands how many of you guys in the audience today are carbon neutral personally is anyone got one two three yeah okay that's three people right and this is like the refi early morning crowd right this is like kind of the the church if you will how many guys have a company that is carbon neutral about three people as well so this is where we are today if you take a survey of the world you probably have this equal distribution maybe three to five percent of the population are actually either individually or corporally carbon neutral and so our goal is we got to get that number to like 50 and the rate we do that is actually through economic incentives giving people actually rewards either socially or economically

for the very Act of purchasing credits themselves um a third part and this is something that we're newly developing uh in great interest actually is to actually create a pipeline between the banking world and the Green Financial product world and what I mean that in particular actually is the idea of tokenizing the green bonds so for those guys who are not coming from sort of large-scale traditional Finance green bonds have evolved as a tool actually to put value into company actions that go to the carbonization and there's kind of like a whole you know sort of DLT system that works behind this but I want to show you a few pictures of scale like today we are issuing relatively about 300 to 400

billion dollars of green bonds every day the entire volunteer carbon market today is let's say five you know billion dollars if we can actually find a way to bridge these two worlds together we can drive far more Capital into the space so this is my very simple you know uh Elementary School rendition we have uh 2.5 to 3 trillion dollar green Bond space and we have a voluntary carbon space I generously put it at about 20 Bill and today if you look at the issuance of the green bonds there are very little overlaps between these two economies um our view is that we can actually merge these circles together and hopefully drive a lot more digital green bonds actually support and finance the carbon projects behind the scenes and embedded in this is not only carbon

credits but we think of it as mitigation outcome instrument it's a much larger umbrella term it also includes things like renewable energy like you know certificate performance energy performance enhancements and a bunch of ratings you can actually put onto the bond insurance itself so finally I'm really interested in making a public plea to all of you guys here to work with us actually to build climate awareness in Asia as you saw before from my big slides I think there's a very large need to do this and Europe has some of the best ethical and social constructs to mobilize people actually to participate in this so this is an area where I think there's a lot of potential Market over here and knowledge you know where we're

sitting in Paris and these two things added together can be very useful so thank you very much for the presentation about three minutes left for Q a um I just want to say that you guys are fantastic for being here and thank you so much for caring about the climate cheers [Applause] foreign thank you I'll definitely talk to you hi Max I'm a great presentation

um what's your opinion on the UN framework um the itmos or the yeah I think itmos are going to be a huge game changer because they actually allow us to have country level carbon issuance that's then registered at the UNF Triple C um and you know we are very keen to see more country level you know uh credit issuance as well um I think that it's going to be 30 50 of the total you know sort of volunteer carbon Market in the future you can shot it I think yeah good I was saying I'm sorry I was late but I got a glimpse of what you're doing and I

think it's quite complimentary this is often said web 2 it's about competitors while web trees about collaboration and I think there's a lot of space for collaboration here we work with and Bank Farmers that are 70 of the way of the unbanked population it's Millions 1.2 billions actually they're excluded from the carbon markets because of the scale so it would be very synergic to find a way to tap that is southeast Asia Africa and Latin America the markets and voluntary markets growing I think it's a huge opportunity so congratulations on on your job thank you so much yeah love to talk to you more about agricultural farming's cases okay one last question

there's a guy here a great presentation great great initiative um so quick questions on um the roadmap that you have in front of you so you're more focused on the digital digital asset side of things where you're looking at you know Green bonds and tokenization bringing that into voluntary carbon markets if yes um then what jurisdiction are you looking at that's my first question and the second question is short-term Focus right so what is your near-term focus where are you from POC perspective and what exactly have you achieved so far so it's amazing yeah so we've been around

for three and a half years um we've been working on this um all of that time a lot of the time has been actually putting together the political economy ecosystem right the sort of high-level real economy support actually to create a new registry that's a very um large and complex Endeavor the digital green Bond stuff is something that we started in last nine months and we hopefully have our first customer a listed company in Hong Kong issuing a multi-million dollar Bond uh through our facilitation and hopefully it's going to be through a European jurisdiction actually for the bond creation and then for me the biggest milestone for us this year is actually getting MVP launched for the registry I think that we can accomplish this before the end of year

which would be huge for our ability to start getting a lot of real world you know farmers and tree protection people and you know large-scale Carbon removal people actually to participate that's great that's brilliant thank you so from collaboration perspective from interoperability perspective so how how does your platform allow you know other asset issuance companies to collaborate with you and list perhaps from exchange perspective yeah so and very simply um we are very open for any project developer to come find us I mean we're essentially building a Reggie to serve project developers we'd love to have um you know sophisticated intermediaries and people actually do the trading and broking piece to actually help us

stimulate demand and we need to also partner with people who have you know digital mrv Solutions people who can do like sort of remote sensing and iot measurements actually to drive data feeds um yeah so okay thank you Max thank you everybody and next pitch in just two minutes [Applause]