How Re-Fi can save the planet

Photo by Margot RICHARD on Unsplash

and in turn humanity.

The current state of economies can be characterized as extractive, where resources are unsustainably extracted and profits are unfairly distributed. This approach has led to environmental degradation, social inequality, and economic instability. Take for example oil extraction and fossil fuels and the current state of the world. Oil-rich nations are controlling the production and price, while other Western nations are sanctioning oil exports from other countries. All of this leaves the developing world, particularly Africa and the Global South in an economic disaster.
Extractives of economies have led to the centralization of power and capital, which has made the gap in social inequality very wide.
But what if there was an alternative? A world where energy needs were met locally and produced sustainability, where each country could offer to alleviate dependence instead of increasing it and pushing each other towards oblivion?

Enter ReFi

Regenerative Finance, in short ReFi, offers a promising alternative to this extractive model, focusing on creating a financial system that benefits all living participants and prioritizes the well-being of communities, ecosystems, and the environment. ReFi is an inclusive, transparent, and accessible alternative to conventional financial systems, building on the principles of DeFi and incorporating theories and approaches from regenerative economics. It aims to create a regenerative economic system that prioritizes the well-being of people, communities, and the environment.

Instead of an extractive economy, ReFi follows a circular economy where instead of exponential growth, there is sustainable growth, and rather than Systems serving capital, it serves the people & the planet enabling more flow of capital in protecting the environment.

Instead of profits people, societies and the planet is at the center are at the center of a regenerative economy.

Climate, carbon, and carbon credits

In recent times, climate change has risen to be the biggest threat to humanity. Extractive economies are certainly the root cause of this situation. 200 years of the Industrial Revolution have certainly laid the foundation for a whole set of negative effects. The amount of CO2 levels on earth has nearly increased by 1.2x, we can already see the ill effects of this, whether it is wildfires in California, Heat strokes in the UK and Canada, or floods in Pakistan and China, we are just getting started.

NASA

The concept of carbon credits emerged as a way to address climate change and promote the transition to a low-carbon economy. Carbon credits are certificates representing quantities of greenhouse gases that have been kept out of the atmosphere through various projects, such as renewable energy, energy efficiency, and reforestation.

The United Nations' Kyoto Protocol, signed in 1997, was the first international agreement to set legally binding emissions reduction targets for developed countries.

This led to the establishment of carbon markets and the trading of carbon credits. Carbon credits are permits that allow the holder to emit a limited amount of carbon dioxide or other greenhouse gases. When a company invests in a carbon offsetting program, it receives carbon credits, which are essentially “tokens” used to account for net climate benefits from one entity to another. These credits can be purchased by companies to offset their unavoidable emissions. The carbon credit market has grown rapidly, with both compliance and voluntary markets. Compliance markets are regulated by governments and are mandatory for companies to participate in, while voluntary markets are not regulated and are used by companies that want to voluntarily offset their carbon emissions.

The carbon credit market is evolving, and there is a need for thorough guidelines and systems to regulate it. Some of the companies involved in the carbon credit market include Verra, the Gold Standard, SustainCert, the American Carbon Registry, the Climate Action Reserve, Plan Vivo, the Global Carbon Council, and Climate Forward. These companies issue carbon credits and provide certification and verification services to ensure that the projects meet the required standards. Carbon credits work by representing the reduction or absorption of greenhouse gas emissions. When a company invests in a carbon offsetting program, it receives carbon credits, which are essentially “tokens” used to account for net climate benefits from one entity to another. These credits can be purchased by companies to offset their unavoidable emissions.

The price of carbon credits is influenced by various factors, such as the volume of credits traded at a time, the geography of the project, its vintage (the older the vintage, the cheaper the price), and the delivery time. When the underlying carbon project also helps to meet some of the UN’s Sustainable Development Goals, the value of credit from that project to potential buyers may be higher, and the credit can trade at a premium to other types of projects.

But how does one exactly offset carbon?

1. The first step is to calculate your carbon footprint, which is the total amount of greenhouse gases that you emit into the atmosphere. You can use online calculators to estimate your carbon footprint based on your energy use, transportation, and other factors.
2. Once you know your carbon footprint, you can choose a carbon offset project to invest in. Carbon offset projects can include renewable energy, energy efficiency, reforestation, and other projects that reduce greenhouse gas emissions.
3. You can purchase carbon credits directly from developers or through brokers. Developers work with brokers to deal with the sale of their credits. Brokers can give you at least basic information about the projects from which they get the carbon credits. Retailers can also sell carbon credits, and they can give you at least basic information about the projects from which they get the carbon credits.
4. Once you purchase carbon credits, they need to be retired to ensure that they are not used again. This is done by submitting the credits to a registry, which will retire them on your behalf.

Some of the companies involved in the carbon credit market include Verra, the Gold Standard, SustainCert, the American Carbon Registry, the Climate Action Reserve, Plan Vivo, the Global Carbon Council, and Climate Forward. These companies issue carbon credits and provide certification and verification services to ensure that the projects meet the required standards.

But are carbon credits required? How does CO2 affect us?

The impact of increasing atmospheric CO2 levels is profound. In the past 60 years, carbon dioxide in the atmosphere has increased 100 times faster than it did during the end of the last ice age. By adding more carbon dioxide to the atmosphere, people are supercharging the natural greenhouse effect, causing global temperatures to rise. According to observations by the NOAA Global Monitoring Lab, in 2021, carbon dioxide alone was responsible for about two-thirds of the total heating influence of greenhouse gases. This increase in atmospheric CO2 concentrations has led to changes in the Earth’s climate, resulting in more frequent and severe heatwaves, storms, and droughts. Additionally, CO2 dissolves into the ocean, reacting with water molecules, producing carbonic acid and lowering the ocean’s pH, a process known as ocean acidification. The consequences of increased atmospheric CO2 levels are severe, impacting not only the Earth’s climate but also the health of our oceans and ecosystems.

The primary source of the recent buildup of CO2 in the atmosphere is human activities, particularly the burning of fossil fuels like coal and oil. Fossil fuels contain carbon that plants pulled out of the atmosphere millions of years ago. When burned, this carbon is released back into the atmosphere as CO2. The industrial activities that our modern civilization depends upon have raised atmospheric CO2 levels, leading to significant changes in the Earth’s climate. The increase in CO2 levels has led to global warming, with estimates ranging as high as $272 billion for 2020. The rise in atmospheric CO2 levels is a direct result of human activities, and addressing this increase is crucial to mitigating the effects of climate change and preserving the planet’s ecosystems and habitability.

Climate Tech

Climate tech has evolved with the mission to tackle this huge problem of climate change. Climate tech startups are pioneering companies that leverage innovative technologies to address the challenges of climate change. These startups are at the forefront of developing and implementing solutions that aim to reduce greenhouse gas emissions, promote sustainability, and build climate resilience. By focusing on various sectors such as renewable energy, carbon capture, sustainable agriculture, and clean transportation, climate tech startups are playing a crucial role in driving the transition to a low-carbon and climate-resilient economy. Here are some of the key solutions offered by climate tech startups and their impact on solving climate change.

• Many climate tech startups are focused on advancing renewable energy technologies, such as solar, wind, and hydroelectric power. By developing more efficient and cost-effective renewable energy solutions, these startups are contributing to the reduction of carbon emissions and the transition towards a low-carbon energy system.
• Some are dedicated to developing carbon capture and storage (CCS) technologies, which involve capturing carbon dioxide emissions from industrial processes and storing them underground. These innovative solutions have the potential to significantly reduce the amount of CO2 released into the atmosphere, thereby mitigating climate change.
• They are driving innovation in clean transportation technologies, such as electric vehicles, hydrogen fuel cells, and sustainable mobility solutions. By promoting the adoption of low-emission vehicles and sustainable transportation practices, these companies are contributing to the decarbonization of the transportation sec

Climate and Blockchain

Blockchain is a digital technology that functions as a shared, secure, and transparent database or ledger. It’s best known for its role in cryptocurrencies like Bitcoin, but it’s not limited to just digital money. Blockchain is a type of distributed ledger technology (DLT) that allows multiple parties to record and share data securely and transparently.

Some disadvantages of Voluntary markets

In the early stages of VCMs, there was a lack of standardized methodologies for measuring and verifying carbon reductions. This has led to inconsistencies in the quality of carbon offsets, making it difficult for buyers to trust the market.
There have been concerns about the quality of carbon offsets. Some argue that not all carbon offsets are created equal, and some may not be as effective as they claim to be.
Due to the issues mentioned above, VCMs have been fragmented. This has led to a lack of scale and a limited impact on climate change.

Blockchain solves these problems in voluntary markets

Tokenization of carbon credits involves the representation of carbon credits as digital tokens on a blockchain. This process allows for the creation of tokens that represent carbon credits, enabling organizations to tokenize and trade these credits in a fast, secure, and transparent manner. By leveraging blockchain technology, carbon credits can be transferred and exchanged efficiently, preventing issues such as double counting, double spending, or loss of carbon credits. This tokenization process also enables the automation of transactions, minimizing the number of steps involved and ensuring the integrity of the carbon credit system. Additionally, the use of blockchain in tokenizing carbon credits provides a reliable and auditable record of transactions, which is essential for maintaining the integrity and transparency of the carbon credit market.

The tokenization of carbon credits helps overcome the disadvantages of traditional voluntary carbon markets (VCMs) in several ways. Firstly, it addresses the lack of transparency and accessibility that has been associated with VCMs. By tokenizing carbon credits on blockchain platforms, the market becomes more transparent, and participants have access to the same information, making it easier to track and verify transactions. This increased transparency and accessibility can help build trust and confidence in the carbon credit market, addressing one of the key challenges of traditional VCMs.

Refi unlocks the $1.5 trillion in crypto and accelerates the move towards regeneration. This approach increases access for individuals and drives a new form of demand into climate solutions, addressing the lack of transparency and accessibility that has been associated with traditional voluntary carbon markets (VCMs). Refi seeks to re-imagine how value is delivered and who decides what is valued in communities by providing verifiable, dis-intermediated, and liquid carbon credits that can be independently verified for accuracy and used as building blocks for crypto-economic incentives. By leveraging blockchain technology, Refi is driving a more transparent, accessible, and efficient carbon credit market, making it a more effective tool for addressing climate change. The growth of Refi is driven by trends in understanding economic interdependence with nature, the fragility of extractive economic systems and supply chains, and using blockchain technology to enable natural regeneration for climate causes at scale. This approach supports a shift from an economy that is solely focused on return on capital to one that prioritizes positive change with financial return circulating amongst the community, ultimately helping to scale and improve climate solutions. Therefore, Refi and blockchain are driving the force to fight against climate change by revolutionizing the carbon credit market, making it more transparent, accessible, and efficient, and providing a more effective tool for addressing climate change.