Carbon Sequestration-Based Cryptocurrency

Contextual Citation

"In some ways, a currency represents a sort of “baptismal name” that allows a given society to label that which it values most highly. Consequently, the material form of this value becomes immobilized in secure vaults as “reserves” while abstract representations of it circulate in our everyday speech, in our accounting books, and in our trading systems. Thus, with a carbon-backed currency, we could align our economy with the cycles of regeneration found in nature by finally recognizing that carbon, which we know serves as the foundation of all biological life on our planet, is of central economic value as well."

- Gustav Peebles and Ben Luzzatto [1]

Description

A proposal by Gustav Peebles and Ben Luzzatto:

"We believe that recent developments on two seemingly-unrelated fronts could help the global economy finally recognize the central value of waste to its functioning. Our proposed revaluation of waste is made possible, firstly, by the advent of digital money that can be governed by entities outside of nation-states. Secondly, much as in the past gold was pulled from mountains, secured in banks, and then converted into productive capital, today widely available natural “technologies” can pull carbon from the sky via photosynthesis and secure it in the earth’s “vault” where it can be converted into productive soils.

We know that we need to actively remove carbon from our atmosphere; mitigation alone (i.e., reducing carbon footprints) will not be enough. The creation of a digital currency (a so-called “stablecoin”), which would be backed by solidified and safely-sequestered carbon that has been “mined” by a global army of prospectors, could serve as a vital step in this removal process. Based on the arguments we make below we believe that such a currency is possible and that providing it would activate a broad swath of hopeful people who are already motivated to fight climate change but have felt largely powerless to do so. Instead of feeling hopeless as they watch governments and industries continually fail to solve our looming crisis, the introduction of a new currency and new technology would, we argue, be able to meaningfully contribute to a global solution." (http://www.publicseminar.org/2019/09/more-precious-than-gold/)

How To

by Gustav Peebles and Ben Luzzatto:

"Simultaneously, advances in the practices, technologies, and verification of bio-sequestration have made mining carbon from the skies affordable and accessible to individual citizens around the world. Methods such as biochar production, afforestation, and regenerative agriculture all leverage nature’s own ability to store carbon safely and securely in the ground through practices that can be implemented on a vast scale by millions of people. If these practices were to be more widely adopted, we would not need to rely exclusively on high-tech and expensive (and in many cases potentially dangerous) tactics such as point-source geo-engineering.[2] With a carbon-backed currency that relies on multiple modes of bio-sequestration to build and sustain its reserve assets, enthusiastic “miners” could exchange their verified sequestration at local banks for chits (and even as down payments on loans) that could then be used on the open market to purchase regular goods and services.

The cryptocurrency market already has at least one carbon-backed currency. Like most cryptocurrencies, it seeks to tokenize carbon in order to unite an already extant global field of carbon buyers and sellers. Instead of following crypto’s tokenization model, however, we take inspiration from the less radical history of what is known as “fractional reserve banking.”

While typical cryptocurrencies are often seen as undermining banks (particularly central banks), this digital currency project acknowledges that banks are the engines of demand-side growth for the asset that underwrites their currency-issuance. For example, this proposed digital currency could be pegged to an index of “global habitability” or “pre-industrial atmospheric CO2 levels.” This would then inform – and even potentially circumscribe – total net issuance by banks rather than allowing issuance to be limited by the common practice of releasing a specific and inviolable total number of tokens. By catalyzing a new and potentially explosive demand for solidified carbon, such currency-issuing banks could then spark an army of individuals who seek to “mine” carbon out of the sky – just as 19th century banks incentivized countless miners to seek their fortunes in the hills of California, Australia, and South Africa.

Implementing such a currency would, of course, entail transcending an array of legitimately complicated hurdles." (http://www.publicseminar.org/2019/09/more-precious-than-gold/)

Example

• The Nori Carbon Removal Marketplace, https://nori.com/: "Nori’s platform makes it straightforward for companies to pay farmers for storing carbon in soil."