TreeChain: NFTs for Trees
There has been a lot of focus on moving energy transactions to a blockchain, but energy transactions already have a complex and regulated market structure. Why not use digital scarcity to create markets that don’t currently exist…
Most people have no concept of their carbon footprint, no easy way to quantify it, and no incentive to manage it. Further, global forests are undervalued (evidenced by massive deforestation in the Amazon) and lack a global uniform valuation for their carbon abatement qualities. Recent efforts to create a market for the carbon abatement value of avoided deforestation have become the subject of substantial criticism. It is very difficult to accurately and reliably quantify the avoided carbon emissions from preventing one forest from getting cut down when economic forces may cause clear-cutting somewhere else. Further, how does one know that those trees were really going to be cut down were it not for the carbon offset funding?
Use frequently updated global satellite imagery and machine vision (such as a platform like Orbital Insight or NCX) to catalog every tree on Earth and track it on a public blockchain. People around the world could then use a carbon footprint calculator to calculate how many trees worth of carbon they emit annually and “claim” those trees on the public blockchain. As trees are “claimed” (or perhaps “mined” to incentivize transaction verification cryptographically) and deforested, their scarcity drives a unit of value. People pay to prevent “their” trees from getting deforested or to plant new trees (or finance other carbon abatement projects). Essentially, a cryptocurrency is created with a total supply that is directly tied to the number of physical trees in the world (imagine bitcoin in which the total # of bitcoin in the world was tied to the number of trees in the world). The value of the currency would go up as trees became scarcer (incentivizing more planting) and go down as trees became more abundant relative to the global carbon footprint (implying that the global economy had reached a sustainable level of carbon emission). One could also view this as a “stable coin” that is pegged to the number of physical trees in the world (rather than being pegged to a fiat currency like the U.S. dollar), in which the “central bank” controlling the stable coin supply was the world’s collective deforestation/afforestation activity. This could create a global price on a real unit of carbon abatement that no government had control over.
Launch the service for free to generate demand and then charge a small fee for brokering tree “claims”. Eventually, only charge a fee for brokering and/or organizing carbon abatement projects (verified deforestation prevention, tree planting, CCUS projects, additional zero carbon generation builds, etc.).
Jake Jurewicz offers professional consulting at 1st Principles Consulting, LLC.