Blockchain and regenerative finance: charting a path toward regeneration

In expanding the ReFi community’s current naive self-perception, it is essential to integrate scientific analysis with broader deliberation, thereby driving systemic regenerative finance change. The question of how we use digital technologies to drive regeneration needs further exploration and discussion across different communities. This requires engaging and educating academia, as well as policymakers and other decision-makers.

Regenerative Finance 101: A Guide to Crypto’s ReFi Movement

Simple design changes like positioning lease roads and locations to dump removed soil could avoid erosion and instead create water-retention ponds that recharge aquifers and provide habitat. If the focus of your company is only on risk management or mitigation, the opportunity to leverage the positive-impact https://www.xcritical.com/ side of the equation is probably being ignored. It is possible to both reduce harm and create positive impacts in tandem. Web3 systems are designed to be open to everyone, but that doesn’t mean it’s impossible to apply safety controls like know-your-customer (KYC) and anti-money laundering (AML) checks. These security measures can consciously be added to certain parts of an application or service to protect users, while still adhering to the underlying idea that by default, people have a right to access them as public goods. This is crucial not only in redefining money within climate, harmony and justice values but also in activating the kind of regenerative economy that sees “places” as living organisms.

Unleashing the Power of DAOs: The Benefits of Decentralized Autonomous Organizations in the Pacific

There’s got to be a hundred projects in those databases that are a viable, thriving things that should be scaled out and replicated. And imagine if then, they were the flywheel or the engine to build co-benefits within each of their buyer regions. So that there, again, not isolated projects working in a great, big, wide world on their own, but we harness the energy that they’re throwing off already, into Bioregions, so that we get this amplifying effect at a bioregional scale. And flywheels usually take courage, and creativity, and capital, and guts, and sweat, and tears to get going. So what we need to do is, find the flywheels that are regenerative, and then, throw energy at them, which is people, and money, and expertise, and help them to spread that energy in their bioregions. Small, wonderful projects, place sourced projects, doing real regeneration.

What qualities would characterise a regenerative economy?

In essence, market failure happens due to information asymmetry and the inability to properly price the social cost of carbon in a free market. Article 6 of the Paris Agreement recognizes the importance of carbon markets. However, in the light of climate change and the ongoing biodiversity collapse, markets seem to fail to deal with problems, which is why there is a need for polycentric governance solutions at a global scale. Moreover, regenerative finance helps promote impact investing, which generates positive social and environmental outcomes alongside financial returns.

As entrepreneurs, governments, economists and concerned citizenry come together, it is expected that the adoption of ReFi will growth and its principles will guide economic policies in the future. But, on the flip side, blockchain technology makes it easier than ever to launch diverse remote-only teams with members from all parts of the globe, or to contribute to decentralized organizations. Opportunities in Web3 and ReFi are often removed from the barriers traditionally presented by the world — from geographical boundaries to economies of scale. Decentralization, by design, also accelerates diversity and enables anyone interested to participate in the system, regardless of who they are and where they are from. Web3 is a movement that has emerged over the last years, and it is far more than the evolution of the internet. We classify Web3 as a set of design principles that are adopted by a strong community of individuals around the globe.

• Communities across the globe could make use of DAOs (decentralised autonomous organisations) for community activism, finance and social projects.
• Indeed, we’ve seen the rise of positive approaches in recent years — climate-positive, nature-positive, and net-positive business — to address our interlinked natural and social challenges.
• Metrics are an essential yet evolving part of evaluating regenerative practices.
• Decentralization, by design, also accelerates diversity and enables anyone interested to participate in the system, regardless of who they are and where they are from.
• When as many interconnected and interrelated causes and effects are diagramed and mapped out, capital can be deployed more fairly.
• In the view of these complex system thinkers, promoting the health of the underlying human network is vastly more important than increasing the volume of economic output (GDP growth) per se.
• The degrowth model appeals to sufficiency, and argues that buying and selling less stuff is a faster and safer path to ecological sustainability.

Lastly, planning for institutional adaptation and change is crucial to ensure the regeneration of global commons. Centralized and manual legacy registries are currently the primary source of all ReFi assets, challenging the decentralized ReFi ethos. Similarly, blockchain technology is frequently hailed as a tool to automate governance while neglecting that the “governance of blockchain” (Ølnes et al., 2017) also raises a number of new governance challenges.

Third, the meaningful participation of participants in framing questions, defining the scientific results, and developing rules is necessary. Fourth, integrating scientific analysis with broader deliberation is crucial. Fifth, higher-level actors should facilitate the participation of lower-level actors. Sixth, it is important to engage and connect a variety of institutional forms, from local to global, in developing rules, monitoring, and sanctioning.

We also need common, comparable metrics for corporate long-term value creation. WEF-IBC, a group comprised of 120 global CEOs, including our own, has taken an important step to realize this objective. The group has proposed 21 core metrics and 34 expanded metrics which enable consistent and comparable ESG disclosures across industries and geographies. The metrics support four interconnected pillars — governance, people, planet and prosperity — aligned to the UN Sustainable Development Goals.

I remember one morning, literally looking in the mirror as I was getting dressed and not liking the person I was becoming. Where a financing instrument falls within those two structures is based on several factors, including its scalability, applicability across regions, financial risk-profile, and where it falls on the market maturity curve. Stay up-to date with food+ag+climate tech and investment trends, and industry-leading news and analysis, globally. While the use of the term has gained traction, investors must dig deeper into these commitments and understand how they manifest in real-world practices rather than simply accepting the branding at face value. If nature or biodiversity credits are to be used, designing a credible system is critical. For example, re-seeding a field with a wildflower mix is not much use if the seeds don’t take.

“Paris agreement, united nations framework convention on climate change,” in 21st Conference of the Parties, Paris, November 30- December 11, 2015. They do this through a cap and trade system — the government sets a limit, or “cap,” on the total amount of greenhouse gases that can be emitted over a certain period of time. They then issue a corresponding number of permits, each representing the right to emit a specific amount of greenhouse gases. Companies are fined when they emit more emissions than the amount of permits they hold, so they can buy permits from other companies that have more permits than emissions. The COVID-19 pandemic has thrust the global economy onto a new trajectory.

Natural assets can now be priced by their value as “carbon sinks,” a.k.a. society’s valuation of a ton of carbon removed from the atmosphere. When we remove carbon from the air, we reap cleaner air, lower temperatures, and create other positive externalities. These positive effects can be financially quantified by the tonne and qualified into what is a carbon credit. A bit about me, my name is Nihar Neelakanti, Co-founder and CEO of Ecosapiens, a metaverse enabling consumers to fight climate change. The Capital Institute is a 501(c)3 non-profit organization reimagining our economic and financial systems to promote the transformation to a more just and regenerative world.

Blockchain creates a verifiable public ledger so we can quantify positive actions that create change and further incentivize them. Most ReFi (Regenerative Finance) Blockchain initiatives help solve climate change and biodiversity loss by creating incentives for investing. Regenerative approaches and enabling technologies can be combined for end-to-end impact. Gevo, a company working to create net-zero (and ultimately carbon net-negative) sustainable aviation fuels provides an example.

As we face the dual challenges of feeding a growing population and addressing climate change, regenerative agriculture provides a valuable solution, capable of addressing both demands. By fostering systems that allow farmers to produce food while enhancing natural capital, we can build a more resilient future that aligns with increasing investor focus on natural capital, illustrated by frameworks such as the TNFD. Finally, investors must be prepared for the “J-curve” often seen in regenerative agriculture transitions. Initial periods may require significant capital injections and patience, as short-term yields can dip before the long-term sustainability and resilience of these systems are realised. By promoting diverse ecosystems, regenerative practices also support wildlife and help to reverse nature and biodiversity loss, helping to address a key systemic issue.

Improving floodwater defences and drainage on farms, minimising water pollution from farm run-off, and using water more efficiently will all help protect global water supplies. ReFi aims to use crypto for good by harnessing the potential at the intersection of profit and purpose and introducing the idea that it pays to help the planet. Blockchain technology can streamline the issuance and liquidity side of carbon and make it more equitable for all parties involved.

Climate changes are intensifying the problems and there is an intense focus on soil. That means a lot of experimentation with regenerative agricultural practices. Regenerative agriculture farmers plant a different crop immediately after harvest, often alternating cash crops and cover crops.

Management practices included conservation tillage, cover crops, and precision fertilizer management. 97% of surveyed growers reported increased resilience to extreme weather such as drought and heavy rain. Yet soils are one of the Earth’s most important carbon sinks, holding more carbon than all of the world’s vegetation plus our atmosphere combined. When practices that maximize carbon inputs to soils, such as planting cover crops, are combined with practices that minimize carbon losses, like no-till, soils can sequester significant amounts of carbon each year. Regenerative agriculture has the potential to transform agriculture from a source of greenhouse gases towards net carbon drawdown. Around 22% of anthropogenic greenhouse gases come from agriculture, forestry, and other land uses, according to the Intergovernmental Panel on Climate Change (IPCC).

Changes in farm practices could sequester nearly a billion tons of carbon dioxide around the world every year. As the #APLANETReportingSeason concludes, it’s vital for C-level executives to assess their readiness for the Corporate Sustainability Reporting Directive (CSRD). And I guarantee you, if you convene that meeting, you will be introducing people to each other who are already working in this paradigm, but never knew each other. They’re transforming, having had that nucleus where people are exploring this different way of being with the world, has had influence in the wider region, when they’re there for long enough. We have the Regenerative Communities Network, which you can find a link to it on our website, but also just google it. If I was good, I could pull this up quickly, but it’s a beautiful color visual of a watershed map.