Next-Generation Climate Finance - TOKEN2049 Singapore 2023

hello everybody good afternoon my name is Drew and I have the pleasure of representing CLE middle and carbon Mark today Cleveland is a decentralized autonomous organization with hundreds of contributors from around the world and tens of thousands of community members our mission is to accelerate the delivery of climate Finance to high impact sustainability projects and we do that by interfacing with environmental markets and producing products and services that help increase Market throughput as well as the availability of data carbon Mark is a platform that clementow has developed and serves as a gateway to climate Finance so real world assets aren't just happening in the art world with nfts but also with the tokenization and fractionalization of real estate of bonds of cars and importantly in our world of environmental assets it's a concept that's gaining traction and support from many traditional Financial players and whereas the total crypto market cap is hovered around 1.1 trillion over the last few months the Boston Consulting Group anticipates that the the market for Global a liquid assets could reach 16 trillion in terms of tokenizing these and bringing these on the blockchain by 2030. for environmental assets tokenization provides an Avenue to make them programmable which leads to Innovations in automation as well as being able to integrate them with other types of financial applications So currently carbon Mark facilitates the trade of carbon credits now carbon credits can be generated in a variety of ways on the emissions mitigation side you have projects which actually mitigate greenhouse gas emissions such as renewable energy installations but you also have forestry projects which help preserve existing biomass and interestingly that ladder technology type is one of the most powerful levers that we have in the fight against climate change almost 11 percent of anthropogenic emissions or carbon emissions caused by human activity are actually attributed to Forest destruction and land degradation so carbon credits serve as a very important financing mechanism for these projects you also have carbon removal Technologies again as simple as just planting new trees or technologies that actually sequester carbon grab it from the atmosphere and then store it over long periods of time so in terms of impacts there are a variety of co-benefits that carbon projects can relate to for example nature-based projects can help produce a more resilient land use systems and Food Systems and there are other projects like renewable energy which can improve access to energy in low resource settings as well as lowering the costs uh in developing regions so what's the impact so far in this digital carbon Market or the on-chain carbon Market well thanks to clementow over 25 million tons of carbon were actually brought on the blockchain last year so to put things into perspective 25 million tons of carbon is equivalent to the emissions from 35 million flights between New York City and London we've also helped over 150 organizations compensate for their emissions through the usage of our products and we've really brought unprecedented transparency to this Market through the publication of our tokenized carbon dashboard so how did this all begin achieving this impact and then launching carbon Mark well it started with a bridge so bridging infrastructure is pretty critical in the early days of getting this Market set up essentially you're taking an underlying environmental asset and representing it on chain as an nft this nft contains information related to the technology type the certification standard and even the geography of where the project is located these nfts are then fractionalized into erc20 tokens and each token represents one ton of carbon that has either been mitigated or removed you also have carbon pools where you take multiple projects that have similar characteristics in order to build build up liquidity and a great example of that is Moss's mc02 token so Moss is a carbon project developer in Brazil and mc2 represents a variety of nature-based projects that are developed in Latin America so in the first few months after our launch over 10 million tons of carbon were brought on the blockchain by April of last year almost four percent of the global supply of Vera certified credits have been tokenized and in various the leading carbon registry with the greatest market share currently but then in May of last year Supply flatlined which you can see carbon stopped moving on chain in May that same carbon registry Vera unilaterally halted the tokenization of carbon citing the experimental nature of this technology this uh sudden knee-jerk reaction by an industry player caught many people off guard including us and many of the partners that we're building with and you can imagine this happening while we were entering a bear Market certainly brought with it many challenges however um and really cast a shadow of uncertainty over uh what was being built in this space but there's this uh adage in our industry that the bear is for building and indeed that's what we had to continue doing and thankfully during this time there were other members of the climate Finance industry that's all we were doing they saw the benefits that this technology can bring and they started to build with us so what are those benefits exactly why should we try to move the climate Finance space on chain well there's a variety of different benefits one being the length of sourcing to actually acquire these assets the traditional carbon Market is dominated by opaque OTC trading if I was a company trying to acquire these credits I might have to reach out to a variety of Brokers and go on a variety of different marketplaces and exchanges just to get some pricing information and to understand what's available in contrast right now you can go on carbonmark.com and within 30 seconds you can filter through available carbon projects and purchase them and then claim the environmental benefit when you consume the asset you also have differences in terms of fragmentation again the traditional Market is full of you know Myriad players uh Traders Brokers marketplaces liquidity is fragmented and the information about the availability of projects is fragmented as well in contrast on chain you have a foundation for True interoperability with the tokenized environmental assets and a variety of other applications including you know the availability of data in real time which brings me to the the third major Point transparency as I stated previously the traditional Market is extremely opaque but we know from things like Dune dashboard and other tools that what's happening on chain in terms of trading uh is is fully available in near real time for different players and to illustrate that I have um a screen capture here from our carbon dashboard you can view projects uh you know depending on what geography they're in you can see the trading activity that has occurred and I know there's a few people in the audience that are actually from the climate Finance space so I know you understand that you know in the industry we used to rely on reports from players like ecosystem Marketplace that was a retrospective survey based approach to understand what's happening in the market and this is a paradigm shift we're moving to real-time Market insights thanks to moving these assets on chain so in summary you have stark contrast in terms of the sourcing time for these assets you're moving away from a fragmented Market to one where you have true interoperability and integration potential between these assets and other players that are building and finally you have really a paradigm shift in terms of the transparency in the market so Integrations in particular are powered from this this interoperability nature of of the token assets and the power of smart contracts and automating things there's a great example of Integrations uh this is with our partner provide services so with provide we've developed the carbon Mark API this API connects to sap and other Erp systems and it essentially allows different corporate players that are in that system to automate the purchase and uh retirement of these assets and when I say retirement I'm just referring to the consumption of the environmental benefit for these assets on chain the beauty of this system is its flexibility if I'm a corporate and I have my emissions logged in sap from different stages of my supply chain I can match the let's say the geographic source of those emissions with carbon projects that are also taking place in that geography because again this information is all available on chain and you can automate these things so we're really excited to continue to move this forward and work with provide so thus far we have worked with logistics companies we've worked with financial institutions uh and we've even worked with the the polygon blockchain itself and we're continuing to work to increase the accessibility of these tools I think a really important point that I've heard mentioned at this conference a few times now is that the next wave of blockchain adoption is only going to happen when we abstract away the most complicated pieces of the D5 technology stack we have to make it seamless and so this is really a a primary focus of our product development over the next few months so looking ahead well that's happened in the last two years but we're really just at the beginning of moving this entire industry on chain so some of the things that are happening well as a dow we have deployed Capital to a variety of different uh forward carbon projects so these are carbon projects that are in development and currently we have a snapshot boat uh up for clean middle which any Cleveland token holder can of course join our governance process and and also have the benefits and the utility of the token with our protocol mechanics but we're working with solid world and SCB who's a major carbon project developer to essentially deploy liquidity for projects that are in development this helps shorten the payback period for carbon project developers and it's another segment of the market that's starting to leverage blockchain technology you also have the movement not just from having to bridge credits from existing carbon Registries and tokenizing them and bringing them on chain but you also have a movement of credits that are issued natively on chain so an awesome example of this is with one of our partners chorist they use chain links floodlight Oracle which measures changes in biomass from satellite data and other remote sensing sources to actually then trigger smart contracts to issue credits natively on chain this is uh I think illustrative of what's happening in the industry where people are starting to to leverage the other advantages of this technology and actually move entire segments of the market directly on chain finally uh six months ago we launched our call for alternative standards this refers to new Innovative carbon certification schemes that you know some of which are starting to leverage blockchain technology that we want to support through our infrastructure and I would say that while you know last year the moves by Vera and and General market dynamics uh cast a shadow of uncertainty over what we were doing I think the the evidence and the momentum that we have for industry adoption only continues to grow so with that um where does that bring us today well I'm sure I'm not alone here in thinking that increasing share of our economic activity is going to start to be facilitated by blockchain and by defy tooling and when you consider that and the ability to automatically calculate for emissions through some of the tools that I've mentioned such as what we're doing with Partners on the sap platform we're moving to a world where we can start to price in these negative externalities of emissions in real time and also automatically uh send financing to these high impact sustainability projects so with that said um I'd like you all to join us in making the world a more sustainable place and also continue to collaborate with us so uh join us and that mission and uh thank you for this opportunity foreign