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Description
Traditionally, the primary consumers of verified carbon credits have been large corporations purchasing offsets via brokers to offset residual emissions and fulfill their net-zero commitments. However, this source of demand can only take the market so far.
In particular, the batched nature of corporate net-zero purchases creates an imbalanced market structure in the traditional carbon markets, where there are constantly "sell" offers but only sporadic "buy" bids. Hence, price discovery in traditional carbon markets is extremely limited, as buyers typically show up once or twice a year, so they are force to pay whatever price their broker offers them.
To alleviate this imbalance in the ecosystem, KlimaDAO is cultivating additional sources of demand, especially recurring demand that creates small but consistent activity spread evenly around the calendar year.
Beyond absorbing credits into its own treasury via bonding, the Klima Infinity program has active partnerships across several verticals focused on bringing in new participants into the carbon markets. Many of these new participants retirement activities are not necessarily driven by 1:1 net-zero offsetting, but rather by a commitment to climate-positive action
Some examples:
- Live events committing to reduce single use plastics, adopt a sustainable swag strategy, as well as offsetting in excess of calculated emissions (like SBS!!!)
- Working with SushiSwap to integrate a "green fee" into their transaction flow, the first of many DeFi protocols we are partnering with to integrate retirement as part of their fee structure
- Lens Protocol retirement Collect Modules empower content creators on Lens to redirect their Collect fees toward retiring carbon credits
- Consumer goods companies integrating perpetual carbon offsetting into the purchase of their products: e.g. jewelry company that stakes KLIMA on behalf of each unit purchased and perpetually uses a portion of the rebases to retire carbon credits
- Sustainable Blockchain Summit LATAM 2022 - https://sbs.tech/
A
A
Because
we
think
that
there's
a
sort
of
structural
problem
in
the
traditional
carbon
markets
that
will
eventually
need
to
be
accounted
for
and
will
probably
impact
all
subsequent
environmental
asset
markets.
If
we
aren't
careful
and
learn
from
this
this
issue,
but
before
I
just
want
to
level
set
quickly
there,
we
go
okay,
so
I
just
want
to
level
set
on
like
what
we're
talking
about
in
the
speed
and
scale
required.
A
We've
sort
of
gotten
a
little
bit
of
this
context
in
the
previous
talks.
But
this
is
a
report
from
McKinsey
and
basically,
what
they're
quoting
is
in
order
to
stay
below
1.5
degrees,
Celsius
of
warming
above
pre-industrial
levels.
We
need
a
50
to
55
reduction
in
emissions
by
2030
versus
the
2010
Baseline.
That's
quite
aggressive,
and
we're
sort
of
not
we're
not
quite
on
target
for
that
reduction.
A
But
the
other
aspect
here
I
want
to
point
to
is
the
negative
emissions,
which
is
that
part
in
red
and
the
negative
emissions
is
really
important
to
consider,
because
just
reducing
the
emissions
of
current
operations
will
not
be
sufficient
to
stabilize
the
earth's
climate.
We
also
need
to
net
draw
down
carbon
and
that's
where
these
more
advanced
methodologies
like
carbon
dioxide,
remove,
will
come
in
so
key
takeaway.
We
need
aggressive
reduction
in
emissions
and
we
also
need
to
develop
the
technology
for
large-scale
reductions
in
carbon
from
the
atmosphere.
A
So,
as
we've
seen
today,
the
carbon
markets
have
some
challenges,
especially
the
traditional
vcm
has
faced
a
lot
of
concerns
and
issues
around
opacity
and
integrity,
but
we
think
that's
also
an
opportunity
for
all
of
us
here,
building
with
blockchain
technology,
to
bring
that
transparency
to
bring
greater
Integrity
to
the
market.
So
I
just
want
to
talk
a
little
bit
about
sort
of
the
green
washing
narrative
before
I
get
into
the
demand
side.
But
you
know
there's
this
narrative.
A
Carbon
credits
are
just
for
greenwashing
large
corporates
use
them
to
justify
status,
quo
emissions
and
there's
some
truth
to
that.
But
the
issue
is
that
there's
an
underlying
Financial
technology.
Here,
that's
going
to
be
indispensable
if
we're
going
to
avoid
substantial
climate
change.
So
the
UN
ipcc
is
very
clear
in
their
last
report
that
large-scale
carbon
dioxide
removal
is
going
to
be
necessary
to
keep
warring
below
one
point
before
2C
in
this
quote.
A
The
key
here
is
large-scale
carbon
dioxide
removal
and
the
carbon
dioxide
removal
we
have
today
is
not
really
large
scale,
and
so
there's
a
clear
role
for
carbon
markets
in
general
to
play
in
scaling
up
carbon
dioxide,
remove,
which
will
be
absolutely
necessary,
as
well
as
catalyzing
the
emissions
reductions
that
we
need
in
the
short
term.
So
I
want
to
talk
a
little
bit
about
the
different
types
of
carbon
credits.
We've
sort
of
been
alluding
to
this.
A
question
was
asked
just
now
about
protecting
existing
forests.
A
So
the
the
key
distinction
here
is
between
a
removal
and
a
reduction.
A
removal
is
some
activity
that
actually
removes
carbon
dioxide
already
emitted
from
the
atmosphere,
whereas
an
avoidance
is
going
to
avoid
emitting
it
in
the
first
place,
and
you
can
see
in
sort
of
the
bottom
middle
section
of
this
slide.
Forest
conservation
fits
squarely
into
the
avoidance
category
and
red
plus
is
an
example
of
a
methodology
in
that
space.
A
So
we
think
there's
this
management
of
the
transition
that
needs
to
happen
where
we
clear
the
market
of
the
avoidance
credits
that
are
out
there
today,
while
stimulating
growth
and
future
supply
for
for
removals.
This
is
from
a
report
by
respira
that
I'm
pulling
from
so
it's
very
clear
that,
if
we're
going
to
avoid
catastrophic
climate
change,
the
vcm
needs
to
grow
by
about
15
times
by
2030.
A
This
is
according
to
the
the
task
force
for
scaling
the
voluntary
carbon
market,
and
the
reason
here
is
because
there's
no
sign
that
large-scale
carbon
removals
are
going
to
be
subsidized
by
governments
and
in
the
timelines
that
we
need
for
the
McKinsey
report
earlier.
2030
is
sort
of
the
timeline
for
a
large
scale,
change
and
yeah.
Let's
just
say,
I'm,
not
super
faithful
in
the
idea
that
Central
governments
are
going
to
solve
things
by
then,
so
the
vcm
is
going
to
play
a
really
important
role.
A
Okay,
so
how
does
the
vcm
work?
We
talked
about
this
a
little
bit
already,
so
I
won't
belabor
the
point,
but
Stenberg
sort
of
had
a
similar
diagram
in
his
presentation.
The
key
thing
I
want
to
point
out
here
is
that
there's
a
supply
side
to
the
market
where
the
projects
are
originated,
verified
and
then
issued
credits
and
then
there's
a
demand
side
where
at
least
in
the
current
market.
A
There's
this
sort
of
complex
network
of
intermediaries,
Brokers
Traders
retailers
who
actually
deliver
the
credits
to
Market
and
that's
sort
of
the
space
that
we're
operating
in
at
clementow
and
also
an
area
where
we
think
there's
a
lot
of
opportunity
in
the
blockchain
space.
There's
a
lot
of
people
focused
on
using
blockchain
for
increasing
Integrity
bridging
existing
credits
on
chain,
but
we
think
there's
a
clear
role
to
drive
demand.
Most
importantly,
because
of
this
structural
imbalance
that
I'm
about
to
talk
about.
So
the
opportunity
is,
is
pretty
clear
on
chain.
A
You
have
negligible
fees
compared
to
the
fee
you're
going
to
trade
at
a
broker.
The
the
purchases
are
nearly
instantaneous
as
compared
to
like
calling
someone
on
the
phone
talking
to
them
for
a
few
weeks,
then
sending
a
wire
transfer,
which
is
the
way
it
works
in
the
traditional
Market.
We
also
have
deep
liquidity,
so
stenber
mentioned
in
his
talk
that
each
carbon
credit
is
sort
of
unique.
But
the
interesting
thing
is
that
the
market
values
similar
projects
at
a
similar
price
point.
A
So
there
is
this
sort
of
tension
between
liquidity
and
non-fungibility
or
specific
specificity
of
an
individual
project
and
we're
trying
to
sort
of
strike
that
balance
by
creating
liquidity
pools
on
chain
we've
also
democratized
access.
Anyone
with
a
smart
wallet
like
metamask
can
access,
can
access
carbon
credits
on
chain
and
we're
fully
transparent.
A
All
the
transactions
retirements
are
recorded
permanently
on
the
polygon,
blockchain,
okay,
so
now
I'm
gonna
talk
about
what's
actually
sort
of
new
here
and
what
I'm
proposing,
which
is
that
we
need
to
address
a
structural
imbalance
in
the
traditional
carbon
markets,
so
most
buyers
these
days
on
the
demand
side
are
large
corporations.
Those
large
corporations
have
sustainability
goals
they
set
out.
A
You
know
an
annual
or
quarterly
Target
for
how
much
carbon
credits
they're
going
to
source
and
retire
based
on
their
sort
of
carbon
accounting,
and
the
issue
is
that
this
leads
to
a
behavior
where
people
are
constantly
trying
to
sell
and
buyers
are
sort
of
few
and
far
between.
So
if
the
buyers
don't
show
up
one
quarter
or
one
year,
suddenly
there's
a
bunch
of
sellers
looking
for
a
buyer,
and
this
has
obviously
a
negative
impact
on
the
stability
of
the
market.
A
So
we
think
there's
an
opportunity
to
address
the
structural
imbalance
by
building
more
consistent
sources
of
demand.
So
one
example
that
we've
been
working
on
is
we
partnered
with
sushi
swap
to
integrate?
What
we're
calling
the
Green
fee,
which
is
sort
of
an
additional
fee
structure
in
the
sushi
swap
amm,
where
you
can
elect
for
each
of
your
trades
to
be
associated
with
a
carbon
credit
retirement?
A
So
it's
sort
of
a
small
volume,
but
very
consistent
as
long
as
people
are
trading
on
Sushi
swap
there
will
be
small
demand
for
retirements,
which
is
a
big
change
from
the
way
the
traditional
Market
is
structured.
So
it's
just
sort
of
a
little
walkthrough
of
how
it
works.
You
go
into
the
advanced
menu
click,
carbon
offset
and
toggle
it
on
once
you
toggle
it
on
it'll
be
activated
for
all
future
trades.
This
is
opt-in.
A
We
did
try
to
get
sushi
swap
to
make
it
opt
out
we're
working
with
a
couple
of
other
D5
protocols
that
are
more
open
to
the
idea
of
an
opt-out
approach,
so
hopefully
the
next
one,
the
next
Green
fee
we
Implement,
will
be
opt
out
cool.
So
the
other
big
opportunity
that
we
see
and
Alan
alluded
to
this
I
think
it's
really
cool
what
what
Alan
and
the
SBS
team
are
doing,
with
sustainable
blockchain
Summit
to
sort
of
gather
input
from
the
community
about
which
carbon
credit
should
be
used.
A
I
think
it's
a
pioneering
approach,
but
the
sort
of
flip
side
of
that
is.
This
is
a
room
full
of
people
who
are
interested
and
expert
in
the
carbon
markets.
So
it's
not
necessarily
practical
for
all
events
to
have
that
level
of
input.
But
the
general
idea
that
we
think
is
really
promising
is
that
events
are
unavoidable
right.
A
We
like
going
to
Live
Events,
we
can
do
some
things
like
you
know,
use
the
cool
wooden
you
know
plates
and
and
stuff
that
they
have
here
instead
of
plastic,
but
that's
going
to
be
a
sort
of
marginal
reduction,
the
lights,
the
sound
the
venue
itself.
All
of
these
have
emissions
associated
with
them
and
they're
not
going
away
as
long
as
we
continue
to
have
Live
Events.
A
The
other
thing:
that's
nice
about
Live
Events
is
they're
recurring
every
year,
they're
going
to
happen
around
the
same
time,
and
so,
if
you
can
fill
the
calendar
with
these
recurring
events
that
are
all
consuming,
say,
a
few
hundred
tons
a
few
thousand
tons
each.
That
creates
a
much
more
consist
assistant
demand
side
than
the
current
structure
with
corporates.
A
A
But
you
can
go
beyond
that
and
have
like
a
QR
code
that
references
you
to
the
specific
projects
that
were
retired
to
make
that
that
product
carbon
neutral.
So
that's
another
engagement
point
for
Consumer
package,
Goods
companies
to
interact
with
their
with
their
customer,
which
a
lot
of
them
are
really
interested.
In
the
other
thing,
that's
sort
of
an
obvious
opportunity-
and
we
already
see
this
to
some
extent-
is
travel
bookings.
A
So
many
airlines
already
offer
you
the
option
to
offset
the
emissions
associated
with
your
flight
or
pay
for
a
sustainable
aviation
fuel,
which
is
it's
interesting,
but
it's
not
super
transparent.
You
usually
don't
know
exactly
what
you're
buying
usually
don't
know
what
price
the
airline
paid,
and
my
experience
is
that
they're
usually
charging
a
pretty
hefty
markup
on
those
credits
because
they're
sourcing
them
on
the
over-the-counter
market-
and
you
know
they
have
very
little
incentive
to
reveal
exactly
what
they're
doing
and
what
markup
they're
charging
so
online
travel
bookings.
A
We
think
you
can
extend
that
notion
of
like
airline
offsetting
to
things
like
rental
cars,
hotels
and
make
it
really
a
seamless
experience
so
that
when
you're
booking
an
online
travel,
whether
for
personal
or
for
business,
there's
sort
of
a
one-click
option
and
once
you
book
you
get
a
receipt
for
exactly
which
projects
you
offset.
Ideally
like
shareable
on.
You
know
social
media.
A
So
you
can
generate
that
consensus
that
we
all
should
be
doing
this
every
time
we
travel
another
sort
of
more
interesting
case,
which
I
don't
have
a
ton
of
time
to
talk
about.
But
it's
I
think
it's
really
exciting.
Is
the
opportunity
to
Collateral
to
collateralize
existing
credits
into
forward
credits.
So,
basically,
there
are
buyers
of
these
existing
credits
like
what's
in
the
BCT
pool,
for
instance,
large-scale
renewable
energy.
There's
a
price
people
are
willing
to
pay
for
them.
A
So
that's
an
exciting
opportunity
and
sort
of
the
first
step
toward
integrating
carbon
credit
retirement
into
social
media
systems,
and
that's
pretty
much
it
so
I
think.
There's
lots
of
opportunities
here
to
build
new
use
cases.
The
drive
demand
for
these
credits,
Beyond
Simple
corporate
Net
Zero
offsetting.
If
you
have
any
brilliant
ideas
about
like
what
that
might
look
like,
please
come
and
talk
to
me,
I'd
love
to
hear
and
otherwise
I'm
open
to
questions.
Thank
you.