Carbon credits schemes have been representated as tokens on the blockchain well before the launch of the Zilliqa mainnet. Off the top of my head Ethereum’s moss.earth, Vlinder.app, Regen.network’s Carbon plus and CO2ken are good examples of this trend. It’s no coincidence that these efforts are blockchain early-adopters — carbon credits are poorly served by the current financial system. High friction, opaque issuance processes, enclosed marketplaces and expensive transactions result in a carbon marketplace too rigidly controlled to serve most of the real accreditation opportunities, all while being permissive to some blatant forms of issuance abuse. Inefficient and bloated centralized systems issue the most common forms of carbon credits, and with all the middlemen and gatekeeping, I do not think of the involuntary carbon marketplace a real market. There is no clearer indication of the opportunity here than the difference in price: a ton of CO2 on an official market is more than five times more than the same unit of cheaper carbon credits in the voluntary market, both representing the same thing, at least in theory.
Our stated first goal of this initiative is to neutralize Zilliqa’s net carbon. Bringing us to net zero will take some initial effort to get carbon credits and a self-reported impact assessment. Then it will be up to the community to come up with any number of mechanisms to maintain the momentum across the Zilliqa ecosystem. Given the growing concern, I think that we can count on some level of consistent demand from the community of users, dapp developers and companies in the Zilliqa ecosystem. Voluntary offsetting the main chain requires a careful impact self-assessment. I have already done this calculation for us, which I encourage you to check for yourself. I made several assumptions, which I will detail later when I present the calculation. This article is about presenting our project and the initial crop of credits we have acquired to progress towards the goal of a net zero mainchain.
I did explore the option of giving individual wallets with the option to offset, but after crunching the numbers I believe that will be counterproductive. Individual transactions might cost as little as $0.0000493836 to offset within the Green Zilliqa protocol, so it makes little sense to present it that way. Instead, see the carbon neutrality of our entire chain as a goal worth striving for — for moral and financial reasons and forget about individual carbon footprints, they are a false flag operation anyways. Based on this rationale I decided to make the tally global. In the protocol there is only one number we need concern ourselves with as Zilliqans: how far from neutral are we? With the public calculation of our historic emissions, we only have to use our own protocol to offset the mainchain itself as a community. Because the tools we will use are open to participation — this leaves the possibility for dapps and power-users to claim their contribution to the effort as a competitive advantage.
Selection of offsets
My goal from the start was to get the most broad selection of reputable carbon offsets to tokenize on our chain. Now that we’re ready to begin, I can tell you we’ve got 3 high-quality tokens covering three of the most important carbon supplier schemes. We’ve got a deforestation prevention token, a reforestation (tree planting) token and a biochar token which regenerates depleted soil with reprocessed carbon. The prices per ton of CO2 are so divergent you might react by wondering “why bother with more pricey options when everything is measured per ton”? The short answer is about how sure you are that your credits correspond to the climate outcomes you are being sold. Do those cheap wind farm credits really correspond to a ton of CO2 avoided? Most entitites looking to offset at this scale are also risk-averse so they prefer to mix high and questionable quality offsets to ensure they are doing some amount of good for their efforts. We want to mirror this approach with our mix of credits so that large enterprises can see our offsetting scheme working seamlessly alongside their own while evaluating the Zilliqa tech offering on its own merits, without having to wade into their concern about blockchain being potentially climate-destroying tech.
Vlinder is a climate credit provider and they have been working closely with this initiative since shortly after it launched. They spun out of the Lykke exchange — itself an early attempt to turn the hype around crypto into good for the planet. Their tokenization framework is easily understood from this graphic, detailing the steps they take to go from the ‘real world’ to blockchain tokens and then back to the ‘real world’ for retirement. They have modified their existing product to work with native ZRC2 tokens, offering broad compatibility to Zilliqa’s existing ecosystem of dapps.
Rimba Raya Biodiversity Reserve issued the VCS credits on Verra for the 2014 vintage, tokenizing 640 total tons of CO2. These credits are made to represent the avoided deforestation of the Indonesian Rimba Raya forest.
Southern Cardamom REDD+ preserves the Cardamom forest in Cambodia from deforestation directly. These tokens supply a total to 640 tons of CO2 from their 2016 vintage recognized by the same Verra standards body as the above.
Myanmar Blue Carbon is my single top pick for any carbon credit anywhere. Mangrove reforestation is one of the most dense impact investments we’ve found to date, and this project has been working on it since their legendary founder started the project decades ago. This vintage from 2019 is an experiment, bringing a new kind of “blue” carbon credit to the market. “Blue Carbon” is much more desirable than other carbon because it comes with many un-measurable secondary effects, which gives buyers real confidence that the amount of blue carbon offset is far less than the real positive impact of their funds, both in CO2 and more generally. This credit is part of a new VCS model that Verra developed basically for this project. Supply for this credit is very limited, and mostly is sold off in batches on xdai —where it sells out quickly.
Year One Pledge
Now that we have carbon credits we are very close to fulfilling the Green Zilliqa Initiative’s Year One Pledge, which was to offset the 2021 calendar year as our first project goal. An estimate of this pledge indicates we have enough credits on the Zilliqa mainchain today to complete the task. In the coming days we will deploy the protocol pieces required to claim credit for our feat within our open, smart contract blockchain. Soon the protocol will be open and the credits available to the public to participate in our mainchain offset, offset their own concerns, or do something totally new with DeFi, NFTs or maybe even Metapolis.