Category: Decentralization

Climate change is a global coordination problem. The system has failed to coordinate effective policies and capital investment into the commitments necessary to address the most pressing threat to humanity.

Global coordination technologies that can transcend the mass bureaucratization of climate action are urgently needed. This is where Web3 innovation could help.

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Web3, a new iteration of the internet that harnesses blockchain to “decentralize” management, has positioned itself at the heart of the regenerative finance movement, or “ReFi” — a new economic paradigm that operates at the intersection of climate action and Web3 communities.

ReFi is anchored in decentralized finance, or DeFi, and the theory of regenerative economics. DeFi refers to an alternative financial system focused on the democratization of financial goods and services. Regenerative economics focuses on the creation of systems that restore and preserve the physical resources essential for planetary well-being.

Today, ReFi is a call to action, galvanized by the need to address both the failure of traditional markets to account for the negative externalities of carbon emissions, and the inefficient allocation of resources. This is also a call to action for policymakers to provide legislative direction and support for Web3 innovation in applications as an impetus to positive environmental and social outcomes for all, not just the privileged few. Progress on this latter front is making some headway.

Recently, The White House Office of Science and Technology Policy (OSTP) released its long-anticipated report on Climate and Energy Implications of Crypto-Assets in the United States which provided a balanced and nuanced purview into the Administration’s climate priorities, as it relates to the potential of digital assets. President Biden’s Executive Order explicitly stated the nation’s interest in responsible financial innovation, and since then has reiterated the criticality of a discussion of the potential uses of blockchain that could support technologies for monitoring or mitigating climate impacts.

The emergence of Web3 technology, values and ideas inherent to the ReFi movement can mobilize capital to fund the climate crisis solutions currently being researched by the OSTP, and within the time and at the scale required for the United States to fulfill the Paris Climate Accord’s global commitments. As greater interest and research, as well as robust policy, is invested into the ReFi space, the more effective the incentive for individuals and businesses to take care of the planet.

Among the most pressing challenges that Web3 could address are deforestation, land degradation and desertification — life-threatening issues causing food insecurity, biodiversity loss, forced displacement of local communities and the acceleration of climate change.

The planet loses upwards of 80,000 acres of tropical rainforest every day — that is the equivalent of approximately 60,000 football fields a day. This impacts endangered species and climate-vulnerable geographies more severely than others. Africa is particularly vulnerable to land degradation and desertification. Desertification affects around 45% of Africa’s land area, with 55% of this area at a high or very high risk of further degradation.

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Web3 tech can be used to fight climate change

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