Related: Financing Ecosystem Services & Nature-Based Solutions [MRV].

The best articles, podcasts, and resources on the space

Industry leaders

• The Cambridge 4C blockchain initiative
• Oxford’s Carbon Direct initiative
• Toucan Protocol for a native web3 perspective

Challenges

• Laid out well in VCM Challenges — Twitter Space for #ReFi Carbon Founders

Positives and benefits of web3 carbon market approaches:

In a recent paper co-authored by James Pittman (a Regen scientist and core contributor):

As interests and investments continue to scale, many current issues concerning transparency, manipulation, additionality, permanence, monitoring and reporting bottlenecks, friction, and transaction costs, will be made insignificant if not irrelevant due to the deluge of innovation and market participation we see in the space today. The flaws we see today are simply the growing pains of a maturing set of means to address the climate crisis. What seems unsolvable and unacceptable now will undoubtedly and indeed, imperatively produce a net benefit for our climate, environment and society

Insights

• The removal market needs to grow 20,000x to reach IPCC level significance.

  • Source: Stripe, Shopify, and the Shayle Kann/Nat Bullard podcast

• Driving demand for “carbon offsets” is negative for the climate — within this system/technology set [so, we should encourage unique theses around fixing it]

• If a startup only proposes to work within the current system, they’re incentivized to drive demand for the current broken market. In doing so, they’re effectively e-commerce platforms instead of climate startups — packaging dubiously valuable products in the casing of “feel good about the climate.”

• Personal notes/ other insights:

  “This is an old trick from the financial industry: Make things more complex.”

  • Writer’s note: startups in this space that drive demand are the equivalent of e-commerce providers if they’re offering offsets instead of solving issues.
    • i.e., Aera Force’s first investment Open Forest Protocol is more focused on unlocking quality supply — and testing whether decentralized approaches can create a better standard than existing protocols
    • i.e., Toucan Protocol is focused on creating infrastructure to bring credits onto the platform.
  • Kristin and John at Toucan discussed that one of the most promising aspects of tokenizing web3 carbon is not to use them as offsets, but to link the carbon contracts to other products (i.e., the backing of a currency or as rewards).
  • Consistently from my (Alex Filotimo)’s conversations with climate investors or leading ecosystem founders, I see that demand is the least necessary thing for carbon markets. (HTsupply > quality/standards > demand
  • The industry is evolving, many issues have proven hard to resolve and task force’s at a variety of locations (Oxford, Cambridge, Verra) are trying to move this forward.
    • simply claiming people will solve problems is potentially over-optimism given the sheer scale of expertise that has examined this space.