REDD+ on the Threshold – Gemma Sethsmith (2011)

The promise of REDD+ (Reducing Emissions from Deforestation and forest Degradation) is fairly straightforward: Forest owners keep their standing vegetation intact and in return get compensated by polluters. There are already established strong protective traditions in some local communities such as the indigenous Mayan cantones in the state of Totonicapán, Guatemala, Kichwa tribe of the Ecuador and many others around the World.

REDD+ is an economical model developed by Parties to the United Nations Framework Convention on Climate Change (UNFCCC) in 2005. It aims to create a financial value for the carbon stored in forests. Carbon emissions from deforestation and forest degradation is up to 17 percent of total yearly emissions. This is more than that of the entire global transportation sector and second largest after the energy sector.

As this documentary outlines trust and traceability of funds are the biggest obstacles. Governments and local townships serve as the intermediary “middleman” in reception and utility/transfer of funds. In most developing countries such institutions can be rather corrupt. Some practices can be altogether wrong: EU governments pay for biofuels from palm oil. These projects end up funding massive deforestation in Indonesia and Malaysia. We must find a better way to implement a carbon market. The infrastructure of Industry 4.0 and innovations brought by Web 3.0 opens new avenues for problem solving.

Building trust is key which can drive a shift from the tragedy of the commons towards fortune of the commons. REDD+ was proposed to be restricted to developing countries and was a good first step effort to build a carbon market. The political history of emissions trading in the US is particularly important in this regard. The US has already implemented a successful cap and trade market solution to prevent the acid rain problem within the 1990 Clean Air Act. California’s own cap and trade market also called as the emissions trade market is currently the largest on planet. Another promising initiative is the Regional Greenhouse Gas Initiative of the New England and the Mid-Atlantic states (RGGI). Similar to REDD+, the RGGI program has a component aiming to avoid conversion of forests.

The carbon markets can be expanded to the whole world using blockchain technology. Blockchain can generate trust by tracking physical assets, like trees, and attaching values to them, like carbon sequestration or carbon storage. Blockchain can autonomously run a market on a distributed ledger. Humans can collect data and verify it through a certification process. VERRA Verified Carbon Standard has been certifying thousands of projects that demonstrate merit for emission reduction.

Assets from VERRA Verified Carbon Standard certified projects can be registered on the blockchain and smart contracts (agreements between parties without the need for a third party) and decentralized autonomous applications (applications that do not run on any centralized machines) can render transactions on the carbon market. In fact, UN has declared that it will support blockchain technology in an effort to counter climate change. One example of blockchain application for carbon credits is ClimateTrade that runs on the Ethereum blockchain. When carbon credits are linked to blockchain the “middleman problem” that REDD+ has faced will largely disappear.