I’ll skip the intro part where I tell you that we’re driving our fossil-fuelled cars blind straight off the sustainability cliff, from where we’ll fall into the big black hole of the global climate apocalypse; there’s nothing that can be done about it unless everyone on earth mummifies themselves for the next 5 years - except for the professors and law makers who will have to totally redesign society; it’s all your fault cos you’re a bad person just for breathing; you feel a blend of angst, guilt and shame, which leads you to go and order some clothes from Primark or book a flight for your next holiday or maybe have a steak frites and a bottle of Pinot Noir from New Zealand…. I’ll skip that part. Suffice to say this whole “8bn peeps living on a finite resource and where perpetual growth determines success” thing needs a bit of work.
Imo what we need is a positive outlook and creative solutions that provide positive alternative choices for people to make that improve their lives and ultimately are positive for - or less impactful on - the planet.
“Ok, so unwrap yourself from that tree you’re hugging you loser, how the heck is that going to happen?!” Fair play.
Well apart from tasty, healthy meat alternatives and super fast, turbo charged electric cars (albeit too expensive, give it time), one area that could improve things for people is how we value the earth’s assets.
Think about it for two seconds. It’s not so long ago that waste had no cost. If you’re a coal-fired electricity power station, you’re there to make money out of making electricity; that’s cool and you build your spreadsheets and all that to make it economically viable… but what doesn’t go into the budget is the cost of taking your waste away - the carbon. Or for a water company, the cost of putting the waste water into the sea. The earth can take that, and it can take it for free; it’s not going to send you its bank details for the inconvenience it’s caused.
And the converse is also true…
At the moment, value tends to be attributed to a positive action or a thing, as opposed to the absence of one or a preventative measure. It’s in the here and now, it’s in the present (I guess one major exception is education). There isn’t value to not chopping down a forest or not tarmacking over some mangroves, or even not killing a tiger right now… Apart from maybe giving to a charity…
But there is not one environmental charity in the top 20 most popular charities in the UK according to YouGov… not a single one. We prefer to give to Battersea Cats & Dogs home than support the earth apparently. Why? Because it’s very difficult for us to actually conceive of the future value of something that hasn’t happened or might happen. Even floods in the Philippines are kind of a bit distant from our day to day. And anyway, how do we value that? If I give £100 to the ‘Earth’, what difference does that make to the size of the problem? Does it move the dial? We need something else…
Enter stage right “Regenerative Finance” - or ReFi.
In crypto, it’s basically a whole area of work around how we might be able to use blockchain for the benefit of the planet. The aims of ReFi are threefold:
to determine the value of preservation/regeneration
package it into a tradeable asset
create liquidity and ultimately a market for that asset
Why does ReFi fit with blockchain and how do we know that this is not just a bunch of computer nerds feeling guilty about bitcoin mining trying to right their wrongs with some healthy green washing?
Well blockchains really have 3 core value propositions. These are:
Immutability
Trustlessness
Transparency
[Please check out the video under ‘Keep on Surfing’ for more on this]
These are three values that fit perfectly with trying to ascertain the future value of something that’s a little ethereal. Take conservation, for example, where the aim is to prove the preservation of a state over time. If I value conservation and am willing to pay for it, I want to know what the state was of the area that’s being conserved at the beginning of the agreement, I want to know for certain that that can’t be changed, I want to ideally deal with the conserver directly and I want full transparency over how the area changes over time. Combined with oracles and smart contracts, that’s basically a fully fledged block chain right there.
That’s what the folks at Regen Network are doing.
Regen seeks to provide a registry and standard for the creation and trading of myriad new ecological assets. They are doing this through their transparent, immutable, trustless, public “RegenLedger”, which acts as a source of ecological truth for all participants in the Regen ecosystem.
It currently provides three core ecological protocol frameworks: Ecological State Protocols (ESPs) define the algorithms and conditions necessary to verify a certain state or change of state on a piece of land. Ecological Contracts (ECs) fund and reward desired changes in ecological state. Supply Protocols (SPs) tie ecological state into supply chains in trusted ways.
With the proliferation of ecological data from satellites, drones, IoT sensors and so on, the capacity to verify and reward granular ecological outcomes is huge. That the ledger proves outcomes such as top-soil improvement or reforestation should unleash a layer of economic activity on top.
Through its ecological ledgering system, Regen aligns land regeneration with economic outcomes. It gives value to something that you can’t touch, but that you can measure over time. It makes it possible to transfer value to someone for not doing something, for conserving something. This is only possible with an immutable, fully trusted, globally distributed blockchain.
I should probably stop there, and you’ve probably had enough. Totally get it. But I’m super pumped about this stuff. So here’s one other example.
Take a forest owner in Brazil. Right now he's got a couple of options. Chop down the forest, sell the wood, lease the land to a cattle farmer and make some money. Or go hungry. Not ideal, but it’s easy to understand why he might make the choice that he makes.
Given that the world values forests so much, WHY and HOW is it not possible that we can’t get some bags of cash to our forest owner for doing the right thing?? We can crash a spacecraft into an asteroid travelling at 14,000 miles an hour with a 27m accuracy, and we can’t stop a farmer from chopping down a tree?! Give me a break…
This is what the folks at Open Forest Protocol are doing. Not smashing up satellites, but stopping forests being cut down using blockchain.
They have developed technology which can be downloaded to a smart phone. The farmer maps out the area of his forest using his phone, is given a bunch of random sample plots where he takes photos of the trees, uploads their species, measures the diameters of their trunks, their height and so on. Lovely trees.
All this is uploaded into the cloud, where it is checked and verified by an independent authority (called ‘validators’). These are folks that really really like trees and know their stuff, and are incentivised to tell the truth by a secondary blockchain consensus mechanism (we’ll leave that there..). But they basically assign an amount of carbon that their computers tell them would be sequestered by such a tree, and therefore by the forest. All that information is uploaded to the blockchain, and carbon credits are minted, which are then sold to corporations for offsetting, and this cash is passed on to the forest owner. The data is measured and updated every six months, and the folks that are buying the carbon credits can track how much carbon is being taken out of the atmosphere over time.
Obviously we should be worried about our ecological situation. I’m not saying we shouldn’t; and I’m also definitely saying that we need to make changes to our lifestyles to accommodate the mental numbers of people living on our tiny blue dot. For sure. But we’re also learning… learning all the time… how to adapt to the situation we’ve got ourselves in. And I for one reckon that the core components of blockchain are going to be super useful for assigning much deserved value to our epic planet. Look out for ReFi in the future.