Blockchain, a tool for financing and preserving protected areas

Blockchain, a tool for financing and preserving protected areas

Communications

As a measurement system, as a way to help with carbon offsetting or as a means for capturing funds that contribute to stopping the climate crisis. Blockchain technology is becoming a useful tool for preserving biodiversity. Transparency when safeguarding nature is always beneficial.

Since the year 1500, between 7.5% and 13% of all life on the planet has gone extinct: more than 150,000 species of the over 2 million that we know of. The conservation of biodiversity has become imperative in this first third of the 21st century, in which mitigating the climate emergency is now a priority. Can blockchain help us preserve nature before the planetary limits established by scientists are exceeded?

The first use of blockchain for protecting biodiversity is that it serves as an accounting system, not very different from how atmospheric carbon, the water shortage, or the cost of removing nitrates from farm land are already being measured. “Transparency, ownership, and accountability are important in achieving the Sustainable Development Goals” indicates the World Economic Forum when proposing blockchain as a model for helping to meet the goals signed by the 193 Member States of the United Nations.

When a kilo of sugar is worth “X” euros in the market, it’s easy to approximate the cost of losing a bamboo forest. But, how do you assess a mangrove forest and its value to serve as a breakwater or as a platform for absorbing the impact of hurricanes? How much is a bee worth if it doesn’t produce honey? How much is a Monarch butterfly worth, whose population has declined by 90% in two decades? 

Another way to measure

A recent analysis of over 50,000 scientific publications—documents on policy and sources of indigenous knowledge—have confirmed that the system used to evaluate or assess the ecosystem is distorted. When we measure the ecosystem in monetary units or material values (commodities), it’s impossible to meet biodiversity goals. We need another way to measure, another scale and another technology.

Towards the end of the last decade, the Australian CommBank  (Commonwealth Bank) presented an interesting idea: a new marketplace for biodiversity protection and preservation. The idea is simple: giving “Biotokens” to those who preserve an area, which can be exchanged for money in the marketplace.

To date, the Payment for Ecosystem Services (PES) scheme has been successful throughout Europe, part of China, along Africa’s “Great Green Wall”, etc. For example, PES incentives for farmers or landowners have achieved the restoration of tropical jungles in Costa Rica. And in Brazil, it would be cheaper to keep 80% of the Amazon rainforest within conservation areas—between 1.7 and 2.8 billion US dollars—than the cost that would be represented for the population by cutting it down. 

In Namibia, the WWF Wildlife Credits  project creates a direct incentive for keeping wildlife in communal lands that receive payments for leaving those lands as they are, literally. Payment is subject to measurable and objective performance, such as the sighting of one species or another, so there are control mechanisms.

In 2021, an interesting auction took place in South Africa. A rhinoceros horn was sold for approximately 6800 dollars. But the good news is in the details and in the how: the rhino horn that was sold is a virtual replica of the original, which belonged to a rhino that had already died and had been under heavy security. The payment was transferred to the Black Rock Rhino Private Reserve.

In 2019 rhino bonds already existed, but now, with the use of blockchain Non-Fungible Token (NFT) technology, these types of protectionist campaigns are completely traceable. If the current owner of the horn’s NFT decided to sell it in the future, the reserve would receive a portion of the transaction. Speculation in service to environmental protection.

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Carbon offsetting with blockchain

Carbon offsetting can still be a tool for restoring ecosystems, mainly forests or jungles. In fact, the initiative, Reducing Emissions from Deforestation and Forest Degradation (REDD+), has been working for some time on analyzing the use of blockchain for moving towards zero net emissions.

Other projects, such as Bitcoin Zero, merge one BTC token with 10 UPC02 tokens (each one of the latter represents the removal of one ton of carbon) in the sale of one unit of BTC0. It’s a complex but interesting model.

Location, location, location: the best traceability

Another interesting project with blockchain that involves the conservation of protected areas and local employment from a developing country is low-carbon tea from Kenya, known as GLI-TEA for short. The idea is to preserve the protected areas of Kenya by improving the traceability of tea, such that it’s possible to determine which tea was not grown in a protected ecosystem.

A similar project, but in marine areas, is Lota Digital. While its main objective was to sell fish directly to the end buyer, it has turned out to be useful for tracing the origin of the product, therefore helping to prevent areas with overfishing.

Blockchain technology is also going to play its role in preserving biodiversity or in capturing funds and financing for associations and governments that seek to safeguard nature as an objective. Whether as an account book, as a way to enforce contracts or as a means of buying and selling commodities that make it more expensive to pollute, this technology will notably help to leave the planet just the way we found it.