Host: Greg Smithies
Guests: Dana Gibber & Phil Fogel | Co-Founders | flowcarbon
Category: ☁️ Carbon Reduction | Carbon Offset Tokens
Podcast’s Essential Bites:
[3:03] DG: “You have about 260 giga tons of irrecoverable carbon in our natural ecosystems that are urgently at risk of release into the atmosphere. Meaning there's not enough philanthropy capital to effectuate the projects that we want to see. It's why something like 73% of our rain forests remain unprotected. And so we were a bit disheartened and started investigating what alternative sources of financing these wonderful projects in nature might be, which led us to do a deep dive into the carbon offset market.”
[4:08] DG: “We decided to start a company in the space that was tackling some of the deep problems we saw in the carbon offset market. And we quickly realized that this was going to be a Web3 company. […] All of the problems in the carbon offset market, a lot of the […] market mechanisms that were contributing to not reaching its potential at all would be solved by tokenizing this asset.”
[8:01] DG: “What we have not managed to do is to preserve our natural carbon sinks. Nature is, I believe, the most scalable, immediate, and cost effective part of our solution set to climate change. […] The alarming stat that kind of illustrates this is every six seconds, one soccer field […] worth of rainforest is lost, which means every minute, there's 30 of those lost, which is the equivalent of adding 7 million cars on the road every day. And so we are destroying natural carbon sinks. And that's something that needs to be addressed. And if it is addressed, […] the estimates are it can contribute up to 30% of the overall solution to climate change.”
[10:34] DG: “The good news is that the demand side of the market for offsets has been exploding recently on the corporate side. And so all that needs to be fixed is making it as easy and streamlined and efficient as possible for these projects to get certified. And then making it as easy and streamlined as possible for them to sell these units to the end buyer. And if those two things can be solved, then you have a robust, functioning growing carbon offset market that is helping to directly fund these projects on the ground. The problem, of course, is that the market doesn't work that way. It's highly inefficient and transparent.”
[14:56] DG: “Conservatively [the voluntary carbon market is] a $10 billion market this year, up from a $300 million market in 2018. […] And it's quickly headed to becoming a $100 billion market by 2030, again, conservative estimates. Typically only the corporate demand is calculated in these demand scenarios. But we […] are very aware that there is retail demand, there's institutional investor demand, there's a lot of on chain demand among crypto protocols.”
[16:21] PF: “Fundamentally, what a carbon credit actually is, is just a database entry. There is no actual physical object that you're actually trying to move around the world or take possession of. […] And what a blockchain fundamentally is, is a distributed database where the ownership of assets in the database or data points in the database can be held by anyone being represented by tokens. […] Carbon credits are actually a perfect use case for blockchain, because they solve so many of the fundamental problems around trading, around access of who can actually buy and own them, who can custody them, where they can be custody, ensuring that they are exactly what they say they are. And also solving one of the key use cases that blockchain was designed to solve for, which is the double spend problem.”
[18:48] PF: “The other big thing that happens when you use blockchains, is trading basically can happen 24 hours a day, seven days a week. […] And you get all of the benefits that have sort of been developed over the last couple of years in the decentralized finance space, which also don't exist for carbon credits today. So for example, if you're someone who currently today owns carbon credits, you can't borrow against that asset, it's impossible. Whereas in defy, as a tokenized solution, that basically comes for free. You can go to a permissionless protocol that allows her borrowing and lending and actually get collateral against your carbon credits to buy more carbon credits if you wanted to, or to basically allow for you to help finance additional projects as time goes on.”
[23:18] PF: “We're going to be using proof of stake blockchain. […] If the energy consumption of the Bitcoin network was the tallest building in the world, the energy consumption by the Ethereum proof of work network is essentially the Leaning Tower of Pisa and a proof of stake network would be a screw. So the energy consumption by proof of stake networks is tiny. And it's really important to like think about that the entire industry is largely moving away from proof of work and towards proof of stake.”
[26:15] PF: “We are actually currently engaged in a token presale for carbon backed tokens. So this is our […] flagship token, which is actually a bundle token that bundles together individual tokenized carbon credits and is a nature based token that anyone can come and purchase from our website.”
Rating: ☁️☁️☁️☁️
🎙️ Full Episode: Apple | Spotify | Google
🕰️ 28 min | 🗓️ 06/01/2022
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