Natural Capital Blockchain Revolution

Posted on Posted in Natural Capital
Margot Wallstrom, Minister for Foreign Affairs, Sweden & Former Chairperson of Worldview International Foundation

This is a guest post from Alan Laubsch, a graduate of Stanford University and Director of Natural Capital Resources at Lykke. Alan is on a mission to help spark a global risk culture with ecosystems perspectives. You can reach him at alan@lykke.com.

We are at the cusp of a revolution, powered by exponential technologies. Doubling every two years, solar will dominate the energy landscape in next decade. On a similar growth path, we await a world of abundance with AI, Robotics, Nanotechnology, Biotechnology, and Blockchain.

We face one exponentially growing threat, however: a climate crisis. Goldman’s former top risk manager Bob Litterman warns that markets have underpriced climate risk, and calls for a high price on carbon.

Pricing emissions is the only effective brake society has which can prevent a future catastrophe.

 

Cause and Effect

A root cause of our crisis is our failure to value natural capital. Natural capital is the value living ecosystems like rainforests and coral reefs provide to humans. Once abundant, natural capital has eroded precipitously due to unpriced “externalities,” such as carbon emissions.

To be sustainable, we must include natural capital in our accounting, and embed the cost of negative externalities in consumption. If we act decisively, the cost could be as low as 1% of consumption. If not, we face potential losses of 5% of GDP per annum.

 

How can blockchain help?

Blockchain technology can be used to protect critical ecosystems by democratizing investment in natural capital, and integrating payment for ecosystems services into our global accounting systems.

Let us focus on the most vital ecosystems services first: oceanic Blue Carbon is responsible 83% of global carbon sequestration, with 50% concentrated on shorelines. Mangrove forests play a keystone role in Blue Carbon sequestration by filtering water to allow sea grasses and coral reefs to thrive. Sadly, rampant deforestation of mangroves threatens the health of coastal ecosystems which are vital to Blue Carbon sequestration and marine biodiversity.

 

A new initiative

Blockchain startup Lykke and NGO WorldView International Foundation (WIF) have partnered to launch Heyerdahl Climate Pioneers (“TREE”) as a digital token that represents a living mangrove tree and carbon rights. WIF established the world’s first mangrove gene bank and restored 2.7 million mangroves in Thor Heyerdahl Climate Park in Myanmar, named after pioneering Norwegian explorer and author of Kon-Tiki.

Critically, community development is essential for the success of mangrove restoration. WIF therefore allocates 50% of carbon credit sales for community development, which makes the trees worth more alive than dead for local communities.

Planting mangroves allows anyone to be climate Net Positive. WIF estimates that each mangrove sequesters 1 tonne of CO2 over 20 years. WIF’s first sponsor was Starboard, a leading watersports firm. Investing in one mangrove per surfboard makes Starboard climate Net Positive. Feedback from clients has been overwhelmingly positive. Some ask to buy trees, and some have even volunteered to plant trees.

Starboard will establish a Net Positive Portfolio, and committed to purchase 1 million TREEs. This natural capital investment strengthens Starboard’s financial viability. If ever in financial distress, Starboard can sell TREEs on Lykke Exchange, and re-purchase TREEs after regaining profitability.

Lykke makes it possible for anyone to establish a Net Positive Portfolio. Investing in one mangrove per week makes anyone Net Positive. A forest of 1000 mangroves makes anyone net positive for life, as long as the trees are kept alive. TREE can be purchased in Lykke Wallet, and Lykke makes markets in TREEs 24/7 with a liquidity cushion of 10% of funds raised, and shares market making revenues with WIF.

 

Get involved!

We are at a critical juncture in human history. Taking personal responsibility is a good starting point. But none of us can do this alone. Digital tokens like TREE enable us to invest in vital ecosystems globally, and to make us more financially sustainable. Please join our Tree-volution to plant billions of mangroves to make a tangible impact on climate globally.