The Role of Web3 in Enabling Climate Action - TOKEN2049 Singapore 2022

great to be here thank you all for joining us uh once again my name is Mark Johnson I work for filecoin green which is a protocol Labs initiative to one make filecoin verifiably sustainable but also to build tools to measure and reduce environmental impacts of All Sorts um I am very fortunate to be joined here on stage with my esteemed panelist to talk to you today about the role of web3 in enabling climate action um and so just to kick us off I want to hand it over to the panelists just to give a brief round of introductions uh who you are what you do and what brought you to working in this space at the intersection of web 3 and climate action so I'll go first I guess hi uh my everyone my name is Bree I run a startup called carbon fire uh this was inspired by my previous Venture building a plastic waste recycling startup and I identified that there was a liquidity and incentive issue with financing climate projects um in in the first instance these will be carbon credits so we essentially provide incentives for our users to contribute to company credit projects I'll hand it over to my fellow panelists Max Nix thanks Bree uh hi guys I'm Max I'm founder and CEO of carbon base we have two main kind of philosophies or what we're doing one of them is that in Asia Pacific we're building a blockchain based carbon registry you can think of as a carbon Central Bank and we're going to hopefully service India China Indonesia like the major kind of Asia Pacific carbon emission sources creating and assigning value to people putting carbon in the ground and the other side of it is actually we're launching one of the world's first reward programs for individuals and companies to become carbon neutral and the rewards are going to be web 3 backed so you can actually earn website rewards for being sustainable thanks guys hi everyone I'm Alex from clay model and so climadau is a project that's essentially looking to develop a scaling solution for the voluntary carbon markets the voluntary carbon markets themselves been around for about 20 years um through through our history our founding teams history we've kind of learned that there's some some quite severe problems with the voluntary carbon markets so by leveraging the web 3 Tech stack we think that we can make the markets much more efficient and we can help them to scale up and when I say scale up in terms of the voluntary carbon markets it's about scaling up climate impact right it's about closing the emissions Gap and getting us towards Net Zero by the middle of the century so that's that's what claimer Dow does I work on on our Dow strategy we we launched in October last year we've been quite disruptive led to the the tokenization of about 20 25 million apartment credits um and now we need to start scaling that we want to scale what clementow is doing to the web 2 world the off chain world and really get adoption for web 3 tech for for climate Solutions oh amazing and there's so much to unpack here I'm really excited to get into this um but before we get into the nitty-gritty let's kind of paint a picture for the audience let's set the scene with uh an environmental Outlook right um where are we how did we get here and where are we going from an environmental perspective and Bree I want you to kick it off because I know you spend a lot of time thinking about this particularly you know from the corporate angle why should web 2 and web 3 care and more importantly how can web3 enhance the transparency and act as a value driver for these corporations so one of the key questions that we considered when we're looking at financing was transparency and seamlessness it's there are a lot of friction points for both sides of the supply chain both demand and Supply so actually accounts for what they do um so I think one of the phrases that we used before was carbon identity so very simply put if today a company or brand tells you that they planted 10 000 trees somewhere you want to be able to check that instead of being able to trust their closed Source report so that sense of Open Source identity is what we want to bring to the carbon credit markets I think a lot of the transparency is brought about by blockchain and that is just the tech supporting the whole web 3 ideology um I think in terms of like corporates and individuals we hope that this open source will actually build a lot of trust and then help us actually scale the carbon credit markets and help us scale the fight against climate change uh two quick comments for us here uh you know we're celebrating kind of this uh exciting ecosystem of crypto where we're also living through the beginning of Doomsday like literally we're gonna start seeing severe challenges for our ability to exist as a species on this planet and so my thesis is that as human beings as we look at the abyss of the catastrophic climate change is coming at us like full on we have the ability to use blockchain as a coordination layer to get a few billion people to get our stuff together so we can actually avoid this catastrophe and climate change is my view one of the killer applications of blockchain because it relies on creating market-based incentives for large-scale economies with individual actions and participants incentivized at a per Action level so blockchain is that particular technology the final thing I would say is next week after token is G fans in Singapore three fans is the Glasgow Financial Alliance for Net Zero and there's Representatives representing maybe like a hundred trillion dollars flying into Singapore to have a conversation of how they're going to spend their 100 trillion dollars to mobilize Human Action if we want the blockchain ecosystem to scale from our measly you know one one Trill today to 10 trillion economy being able to be relevant to the climate transition is going to be where the next institutional adoption comes from a hundred percent um agree with what you say Max this past year we've we've seen some quite visceral effects of of climate change um in the UK we had three days in a row where it exceeded 40 degrees Centigrade it doesn't sound that bad and after being in Singapore for three days okay maybe 40 degrees isn't that bad but in the UK 40 degrees means the trains don't work the kids don't go to school you know our society shuts down so we're not ready for it you know meanwhile Southwest of France had these forest fires worst that they've ever had on record to these climate change impacts are becoming visceral and they're becoming quite visceral in areas of the world that have typically been quite resilient so you know we've also seen Pakistan a third of Pakistan underwater we've seen this this typhoon off the coast of the Philippines um just just this week so the impacts of climate change they're now affecting everybody they're affecting the whole world and to Max's point I think what's what's interesting is now everyone's getting involved um something that resonates with me when when I have this conversation is is Mark Carney who's the the ex governor of the bank of England a couple of years ago he was introducing the UK's Green Tech week and he said that climate change is the biggest commercial opportunity for a generation right and I don't think he says that because he's an you know unashamed capitalist he thinks let's leverage these pain points let's make money he's saying it because one we need scale again um and two everyone cares about it so I think what we're starting to see in 2022 we're starting to see the impacts of climate change reveal themselves quite explicitly we're starting to see the markets react and the markets want to get involved and you know we'll we'll unpack the the role of the voluntary carbon Market within that but to your point Max totally agree yeah that's really fascinating I love those insights and um I couldn't agree more right climate change is an existential threat that we are already facing here and now and let's be honest you know those extreme heat waves that we saw this summer uh the massive flood that Pakistan recently experienced um the droughts that China and the US have experienced recently as well as the massive forest fires unfortunately that is The New Normal right and uh all of those events really remind me of uh some recent reports that have been produced Alex to your point from the regulatory perspective the United Nations environmental program releases an emissions Gap report every year and they recently highlighted that climate change is no longer a future problem it is a Now problem so we must address it with the fullest Force possible so I want to ask you all what tools do we have at our disposal to actually address these climate challenges to enhance our ability to promote climate action around the world and Alex I want to jump back to you real quick because I know you spend a lot of your time at clean McDowell from the strategy perspective taking a look at the evolution of the policy space going on specifically in the carbon markets so can you speak to us a little bit about that 100 I think um having to start at the high level we've we've seen the the climate change policy conversation evolved quite a lot in the past 20 10 years I think previously climate policy was quite forward-looking how do we force the economy to do certain things that we want it to do regulations carbon taxes focused subsidies that sort of thing I think what's been really interesting recently was the inflation reduction act in the United States which is a very misleading name the inflation reduction Act is essentially an energy act um and and contained within the inflation reduction act um is a bunch of money that's going to be thrown at tax credits for investing in in clean tech so they've kind of gone Against the Grain which has historically been a regulation focused approach or a carbon tax Focus approach and they said you know what no we're not going to try to regulate we're not going to try and force the market to do something we're just going to throw money at it and by doing that we're going to unlock a load of capital so I think that's a higher level is a really interesting example as we move from a historical stick approach in terms of policy to what appears to be more of a carrot approach a market-based approach um but more specifically with with respect to the carbon markets and again another interesting point so at cop 26 last year um in in Glasgow um there was a line in article 7 of the the Paris agreement which which was amended off the back of conversations at cop which spoke about the role of the voluntary carbon Market in allowing um countries across the globe to transact carbon liabilities and carbon credits with with one another so we're starting to see that the carbon Market which has traditionally been a private sector-led initiative a private sector-led um Market be acknowledged as you know a key mechanism that that can help scale climate action and again I'm going to keep coming back to this point maybe I'm laboring it too hard but I think it's relevant for the crowd in this room you know the crypto crowd you know which is the web 3 Tech stack demonstrates to us how efficient we can make markets and how accessible we can make markets so I think power powering the web 3 Tech stack with the climate change opportunity and and some of the existing infrastructure that is there is is really quite powerful and and yeah that's that's essentially what climadower is trying to do specifically but with with the voluntary carbon Market so I think that crypto is actually a perfect marriage for climate change or using it as an instrument to fight climate change because I think everybody here in the crowd probably knows and have heard at some point oh crypto consumes so much energy you know it's unsustainable and obviously no one's going to stop mining like Bitcoin no one's going to stop mining ethereum or building or like hashing so what are some of the things that then we can use this technology or like that mechanism for good and actually just to have some fun facts I think like I don't know how many people here actually watch the ethereum merch last week oh we're here for the merge but when the merge actually happened it actually reduced its own Global consumption by about 90 90 I think 90 to 99 but the overall impact on global energy consumption of us as a human race was only 0.02 so in the first place I think ethereum for example never really consumed that much energy it so actually it's perfectly positioned now to become a key component in getting liquidity and also creating transparency with the underlying web 3 technology for climate change Max anything to add to that yeah I also you know I used to do machine learning and Ai and so you know we look at machine learning machine learning is a efficiency technology like one person plus a computer can do a job of 100 people blockchain fundamentally is not a you know efficiency technology per se it's an incentive technology you know and when we look at the people gathered here at this conference we have some of the brilliant people in the world thinking about how to create incentives how to create incentives for staking for you know defy for game five all of these sort of things actually tap into human emotions we think that climate change requires this particular level of expertise if we can find ways that economically and socially reward people to do the right thing for climate change then we don't need to actually berate them we don't need to keep telling them doomsday scenarios they will actually of their own volition decide to do that action so I think this particular Nexus of how do we actually change the value drivers is actually reminiscent of the incredible work that Falcon is doing right filecoin as Mark mentioned to me earlier has 11 of the storage capacity of Amazon right without having to have any of the servers running because 4 000 individual people have actually built companies to provide storage if we can have the same type of carbon removal market right I don't even want to call it the voluntary carbon party we call it the carbon removal Market we can have 4 000 large companies participating in carbon removal Market globally then we actually start making huge dents in climate change at an industrial scale certainly I mean I couldn't agree more I mean you know I've always thought that the the key beneficial ad of blockchain networks and crypto Primitives is that they can be utilized to realign incentives and drive Collective action towards common goals and to me and I think I can speak on behalf of you all as well what's the best common goal that we could all strive for right enhancing Global Climate action and it's really great to see all of these new policy measures coming in from the top down angle as well as corporate actions being taken by companies all around the world to enhance and strengthen their climate disclosures their rules around how their operations should be run but to me you know all of those actions policy measures and corporate actions underlying them are two crucial questions will this be enough and how can we prove that those actions are truly additional from the emissions mitigation perspective so max I want to kick it back to you on this one specifically um how can we utilize let's get into the nitty-gritty here how can we utilize web 3 Tech to enhance the transparency and the verifiability of climate actions so we made an excellent point earlier when these large companies are buying credits today there's no public audit trail of that purchase Microsoft says I bought five million dollars of credits show me right who where's where's the record it doesn't exist that easily blockchain is really interesting because blockchain is auto disclosive like instead of having to hire an ESG manager to write a report about what you've done if you do it on chain it just lives Progressive opportunity so I think that's one of the sort of easiest wins the blockchain provides to actually disclose the process the second thing is you know going back to what Alex said earlier the original carbon Registries were built about 20 years ago and so 20 years ago was the beginning of Facebook it was the beginning of the early days of the internet it was like Myspace right the world we live in today is way more digitized way more recorded way more sort of able to be monitored we have the ability to take pictures of our planet every 24 hours so I think there's a big missing chunk of actually ability to use planetary scale data actually support and measure what's happening on the surface of the planet as actually our measurements you know I had a phone call with a person who has a gold standard project on forestry they get to take a picture of their Forest every three years so two years in someone might have come down and removed some of the forest you have no idea so we want to live in the world we're actually the rewards being given the carbon removal credits being given are being handed out on a daily basis the people actually participating in this removal process feel daily that they need to continue doing the right thing anything to add Alex Abri yeah I think the the carbon Market has traditionally it's kind of split into two sides there's there's the supply side and there's the production of these these carbon credits carbon credits themselves are essentially a digital commodity right so you it's a commodity it's produced it's traded within the market and then you also actually consume it digitally as well right it's not like taking a delivery of oil or wheat or something where you consume actually consumer um you when when you retire a carbon credit or offset a carbon credit um you do it and you receive a PDF or some verifiable document that shows that you're responsible for it and so the the supply side of the market that you're talking about Max is really a need with with some uplift it needs an injection of capital it needs new methodologies it it kind of needs to catch up with what's happening on on the demand side of the market which is where climate hours found its home to date I don't think it doesn't mean that we don't want to participate in the supply side of the market I think we just need to figure out how to do that how do we start to incentivize the the generation the development of really high quality carbon credits that are fit for perhaps within the market because there have been some some quite strong criticisms around the the supply within the carbon Market at the moment but I think with more Capital more attention more brains um that's that's what we can do but if I may um just just talk a little bit about the the kind of web 3 Tech that clima Dow has leveraged on the the demand side of the market um because I think it's quite powerful so at the moment at the beginning I mentioned we bridged these um 25 million carbon credits onto the blockchain through a tokenizer through our partners at the toucan protocol and these 25 million carbon credits they're split into about five different um pools of carbon credits but the the base carbon turn pool and the nature-based offset pool the the mco2 pool um and these 25 million tons represent about 2.5 of the the carbon credits that have ever been issued by the Vera registry so it's not an insignificant amount but it's not a huge amount but what's interesting is that through the liquidity pools that we've developed um by pairing them pairing these tokenized carbon credits with our claima token um on on Sushi swap we've actually facilitated about five billion dollars worth of volume in the past year that's about five times more than what the carbon Market itself the whole of the garden market itself did the previous year and so a liquid Market is an efficient market people can come in they can access it so it's powerful but in addition the point of a carbon credit is not to just trade it right it's a digital commodity the whole point is to consume it because when you consume it you're saying that you're responsible for the environmental benefit that that the carbon credit delivers so we've we've built on other piece of infrastructure called our retirement aggregator that lets organizations or individuals come into our liquidity pools and retire carbon credits very quickly and very efficiently the whole journey of sourcing and retiring carbon credits in the Legacy Market you know if you want a hundred thousand carbon credits to be retired it can take at best days usually weeks usually months on the blockchain you can now do this in 45 seconds you can pick from millions of credits that might fit your objectives as an individual or an organizational the type of credits that you want to that you want to use you don't need to do any of this through a third party it's all done on the blockchain and at the point where you retire it it's retired onto the blockchain so it's verifiable you have the the project hash which tells you the specific project that it represents all the way to your wallet address to show to say that you're the one who who's done the offset really powerful technology it's really being quite disruptive in the market and then the the final thing that we've we've developed infrastructure that we've developed to the data point is our our carbon dashboard so you can visit it at carbon.com finance and this is a live dashboard of um a helicopter view of what's happening with unchain carbon how much liquidity is there what is the pool price um what are the projects contained within the pools so it's really quite impactful if you wanted to access data in the voluntary carbon Market previously you probably couldn't do it or if you could do it you had to pay for a report that was retrospective so you might get Market data for three months ago six months ago 12 months ago now it's all instant and you don't need an account you just log in so and we can only do that because of what blockchain brings us in terms of the data so all these really interesting Technologies they're slowly stacking together to your point Max I think we need to do some more stacking to to integrate these demand side things with the supply side things but I think it's exciting and you know we're kind of at the beginning we're less than 12 months in I I love those points that you just made and I really appreciate you breaking down the demand side and apart from the supply side and to your point I mean you guys have been a massive disrupter in this space driving some massive efficiency gains on that demand side um Bree you are on the other side of the table you're on that supply side looking at how we can enhance the transparency the completeness of data the verifiability of the data underlying these credits and allowing corporations that are interested in buying these to be exposed to this crucial data can you talk a little bit about that I think before we get there um just to also get back to what we were talking about the web 3 part so I'm not a crypto native I think today I can say that I am but what I like about the whole narrative around crypto is that we talk about banking the unbanked what we do at Carbon 5 is essentially democratize the process of getting access to these carbon credits which as Alex already said is a commodity we don't necessarily want okay full disclosure I used to work in Commodities trading um but we don't want someone like shell for example coming in and then buying like all the credits in the world and then continue relying on fossil fuels I think if anything else the energy crisis that Europe is facing now particularly shows us that we need to move away from these but we don't want just the Giants getting in on the ax they should set the pace they are the ones who are leading the flock so to speak by driving brand value as an influencer in a corporate space but we want smaller companies smaller corporate small I mean individuals as well to be able to participate um in this home Marketplace and and that's what I think web3 and crypto is so good at I think um what Mark is driving at is that of course we want the data Integrity when you look at blockchain as a technology whatever data that goes on board if it's garbage going in it's garbage coming out um and blockchain is not a standalone technology for climate Tech or for solving some of the problems within the space and which is why we have people like filecoin who are making sure that by optimizing the way that data is actually stored and checking the Integrity of the data we actually have a really really good base for building up other kinds of Technologies to complement blockchain to actually scale the entire Marketplace and quick one I actually had a really really good chance to dive into a decentralized Content addressing is thanks to you guys and I think what I really enjoy is that we didn't start out most of us in a place where oh let's sell carbon credits necessarily I think we started out like here's the friction points how do we optimize this process efficiency uh and then that's where we started from so when we talk about any kind of traditional Financial Market that the outcome of it is sustainability if you optimize everything from the beginning of the supply chain from the demand side to the origination point I I couldn't agree more max do you have something to say uh just just add a little bit more I think on some of the problem space and kind of where verification can play a really critical role so uh I want to tell you a story very brief story there's a country in South America that is actually carbon negative right it's the smallest sovereign country in South America it's net negative 20 million tons but unfortunately for the last 40 years they've unraveled and received any economic aid for being negative right so they have to choose the people's living in this country have to choose between either cutting down their trees or continuing to live in poverty and retain their neutrality status like what we want to do with the Webster Community here is actually to give them a third rail give them a third walkway which is the ability to keep their trees right get recognized with the value of putting carbon the ground have verification so we can feel comfortable that this indeed you know protection happening and then allow the people to prosper a lot of the people actually to be kind of onboarded into the wealth that is the Webster economy and so I think when we look at the world today we're starting to see the intersection of sovereign countries thinking about how do they get climate Justice for the actions of their natural resources and all of the tooling we have here the fresh market efficiency you know the verification these are kind of tools to achieve this goal of actually achieving human dignity at the conservation level of planetary protection it's wonderful it's such a beautiful Story You've explained it to me before and every time I hear it I'm so excited about the future and honestly what all of us represent in this emerging stack of the new carbon markets incredibly exciting for the future um keeping an eye on time I want to leave the audience with your closing thoughts your call to action so anything that you have not said before you know Now's the Time who wants to kick us off foreign I would just say I I you know I don't know how um much you guys in the audience have looked into these sorts of projects that that we're developing but I think this represents a really interesting um real-world use case for for web3 technology it really has just begun you know 12 months ago there wasn't much happening here at all so if you're not already familiar um really recommend jumping into some of the discords following some people on Twitter there's a whole community building around this this idea of regenerative finance and and now is the time to to learn about it and see how we can really put web3 to good use uh I just want to leave everyone with a book recommendation this book has changed my life I think it might change your life it's called Ministry for the future uh and it's a book that's written 2020 it's literally just you know written last year two years ago and it talks about the near future talks about the next 10 years inside there are fundamental ideas that I think are tremendously exciting implementable today by the wonderful people on this panel including the amazing work that falcoin is doing as well so that's my hope and gift you guys use this book as a reference point for thinking about how do we participate in this economy so I think I will be the baby bit of Doom and Gloom here but I want to make it very relatable for everyone the 2004 tsunami that happened in the Philippines um was a long time ago for many people but for the people in the community who are actually affected a lot of them are still rebuilding and that took what we had a few climate events in that space of time but in the last two months we've had six so it's happening more frequently and if you haven't experienced it I'll make it in a very individual level for you um statistically speaking the carbon footprint that is emitted by three people around you will kill one person around you so if you have at least three friends one in four of you is going to be affected that way so in the sense that I wanted to say this because there is something that everyone can do even if you think that you can't do anything right now you can start looking at it and then in the time step forward if you want to speak to any of us to understand better how you can contribute or to make a change uh we would love to speak to you guys I think that's what I wanted to leave here guys with that that's such a perfect point to close us out with thank you for that Brie um yes we do hope that this resonated with all of you uh if you are interested in talking please come find the panelist after uh this conversation also just want to throw out there if you find yourself in Bogota later in Colombia we'll be hosting the sustainable blockchain summon on October 12th where all of these lovely folks and more will be there to continue these conversations so thank you for your time today [Applause]