The number of projects at the intersection of climate and crypto is increasing, for a couple of reasons. First, crypto has a carbon emissions problem, and there’s growing interest in solving this problem. Second, crypto is a technology that solves problems in and around trust, and trust problems abound in the climate space. Below is a sampling of projects at the intersection of climate and crypto. Know of others? Send them my way, and I’ll update this post. (Also, a warning — think of this post as reference material, not as light reading to pass the time.)
Climate Fixes for Crypto
Reducing the energy intensity of crypto
Bitcoin, Ethereum, and other blockchains famously use Proof-of-Work to secure their ledgers. This incentivizes a footrace between a lot of computers doing a lot of computations, which collectively require a lot of energy, which often results in a lot of emissions. One powerful way to reduce the carbon footprint of crypto is to switch to a less energy-intensive approach to securing public ledgers.
Proof-of-Stake is a consensus mechanism that requires only a few computers to do the hard work on each transaction. It’s an approach that is already used to secure some blockchains (e.g., Tezos) and the marketplaces built on top of them (e.g., “Clean NFT” platform hic et nunc). Notably, Ethereum is likely to switch from Proof-of-Work to proof-of-stake at a date TBD.
Proof of Space and Time is another mechanism which reduces the computations per transaction and which has the advantage of sounding really awesome. Chia is up and running with this consensus mechanism.
A second way to reduce the carbon footprint of a Proof-of-Work blockchain is to identify activity that doesn’t really need Proof-of-Work validation and then move it off of the main blockchain. So-called Layer 2 solutions are being implemented to address the problems that come with scaling up the amount of activity happening on blockchains. Put another way, Layer 2 solutions are coming, for reasons having nothing to do with climate.
Reducing the carbon intensity of crypto
Still, no matter how energy-efficient crypto becomes, it will still require some energy. But what if crypto activities were powered entirely by renewables?
Crypto Climate Accord is aiming to move mining to renewables by 2025 and to get the crypto industry to carbon neutral by 2040. They’re also working on an accounting standard for measuring emissions in the crypto industry. Great coalition of crypto and climate leaders tackling really hard problems.
Decarbbitcoin Labs, a signatory to the Crypto Climate Accord, is piloting a project to prove that it’s possible for small-scale communities to mine Bitcoin profitably using renewable energy.
Terra Pool is a recently announced joint venture between Argo Blockchain and DMG Blockchain Solutions that will mine Bitcoin using renewables, primarily hydro.
Offsetting the carbon emissions of crypto
Offsets represent an alternative approach to reducing the carbon footprint of crypto:
Aerial is working with crypto artists to offset the carbon footprint of NFTs, and they’ll help you offset your collection of crypto art as well. They also have a handy app for consumers to track and offset emissions.
Bitcoin Zero is a token whose value is backed by Bitcoin; when it’s minted, carbon offsets are retired. In theory, if everyone exchanged their Bitcoin for Bitcoin Zero, enough carbon offsets would be retired to fully offset the carbon footprint of Bitcoin.
CO2ken is tokenizing carbon offsets from traditional sellers of offsets. The immediate goal is to make it easy to integrate offsets into the decentralized web. I.e., leveraging crypto to make crypto more green.
Cryptovoxels is a good example of the offset-based approach to reducing the carbon footprint of crypto. Cryptovoxels is a virtual world (hello, Metaverse!) that is fully offsetting its emissions using offsets purchased from Offsetra.
Netpositive.money is trying to find a middle ground between those who are certain that Bitcoin is a disaster for the climate and those who think the Bitcoin community should be left alone to do what it does, regardless of the consequences. For now, Netpositive.money is focused on encouraging members of the Bitcoin community to buy offsets and donate to organizations that are fighting climate change.
Tracking the carbon emissions of crypto
Want to understand the carbon footprint of crypto? Here are a few useful resources:
The Bitcoin Energy Consumption Index, from Digiconomist, will give you a sense of the scale of the Bitcoin’s carbon emissions problem.
CryptoArt.wtf was a tool for measuring the impact of NFTs, but it’s been thoughtfully retired.
Crypto Fixes for Climate
Creating markets for carbon removal and carbon offsets
1Planet by Carbon Futures enables individuals and organizations to support carbon offset projects. If you’re a merchant, you can leverage 1Planet to integrate offsets into your checkout process. They’re tokenizing the carbon offsets, but it seems like it’s still early days for the token (1PL).
Cascadia Carbon is selling NFTs associated with trees that are being planted.
Corcovado is similarly selling NFTs associated with trees that are being planted. However, each NFT will also generate a fungible token (CORCOCOIN) each year after the tree is planted. Elegant alignment of value creation with actual carbon capture.
Moss.Earth has created a token (MCO2) that is tied to carbon credits resulting from the protection of the Amazon rainforest.
Nori has created a blockchain-based marketplace for buying and selling the removal of carbon from the atmosphere. I love that they’ve focused on actual removal of carbon from the atmosphere (not all offsets are created equal!). And I love that blockchain just happens to be how they solve the double-counting problem. You could use Nori without knowing a thing about blockchains. They haven’t issued a token yet, but it’s coming.
Pachama, though not built on a crypto foundation, is worth a look. They are using technology to make it easier to monitor efforts to reforest and avoid deforestation, and they are playing an important role in scaling up the availability of offsets. My guess is it’s just a matter of time before Pachama incorporates a crypto component.
RECDeFi, a signatory to the Crypto Climate Accord, has yet to launch. It aims to create a decentralized marketplace for trading environmental commodities (carbon offsets, renewable energy credits, etc.).
Regen Network is creating a marketplace for carbon offsets tied to regenerative land management, and they’re taking a relatively decentralized approach. They’ve set up a non-profit, they’re encouraging participation from DAOs, and they’re actively working on the problem of how to create bridges between ledgers. They’ve issued Regen Network tokens via private sale and expect to sell to the public in the next few months. Mainnet launch is scheduled for today (4/15/21)!
UPCO2 is a token tied to REDD+ carbon credits which have been verified according to standards set by Verra. Created by the Universal Protocol Alliance and overseen by its Carbon Foundation, this token is in circulation, albeit at low volumes.
Zero Carbon Project is trying to lower the cost of carbon-neutral energy by creating a competitive marketplace where buyers interested in carbon-neutral energy can bid on bundles of energy and carbon offsets. There’s also a token (ZCC) which energy providers have to use in order to settle contracts and which buyers earn as rewards when they make purchases. The bet is that the value of these rewards will rise, since the supply is capped and energy providers have to use them in order to participate in the network.
Creating a market for climate data
dClimate is creating a decentralized marketplace for climate data, forecasts, and models. Just raised $3.5 million in a seed round.
OS-Climate is worth a look as well. Similar to dClimate, they’re trying to create a marketplace for climate data. Though they’re using an open source framework, they’re not building on a blockchain foundation. The competition between dClimate and OS-Climate may help shed light on a interesting question that is mostly unrelated to climate — whether blockchain is ready to support info services businesses.
Organizations focused on Leveraging Crypto to Solve Climate Problems
Blockchain for Climate Foundation is creating infrastructure to support the implementation of the Paris Agreement; specifically, the hope is to use NFTs as a tool for tracking and transferring emissions reductions at the country level.
Open Earth Foundation describes itself as working on an open financial framework that aims to reduce friction when people want to invest in projects that combat climate change. They also are the beneficiary of a recent Beeple auction!
Contributors to this Post
There are a lot of projects at the intersection of climate and crypto, right? Many thanks to those who pointed me in the direction of interesting projects. Hopefully this list of projects — and the list of contributors — will grow:
Samuel Bühlmann (@smrbu)
Jonathan Glick (@jonathanglick)
Matthew Kaplan (@mkap21)
Rob Z. Lee (@RobzLee)
Eric Wilburn (@ebwilburn)
Rachel Yoo (@yooandme)
The My Climate Journey community
Know someone who would be interested in seeing this list or adding to it?