COP15: Three Ways Protecting Biodiversity Needs Blockchain
Montreal’s UN conference highlighted why data technologies and financial innovation are key to slowing the 6th Mass Extinction.
Global biodiversity is at a critical tipping point. I grew up reading a lot of science fiction, and the fate of animals in distant futures usually went one of two ways — either advanced technologies enabled us to repopulate charismatic species like dinosaurs and woolly mammoths, or our descendants would have conversations that went something like this:
“What’s that strange animal?”, the child said to her synth-teacher, pointing at a long-necked, spotted creature strolling through the holodeck’s Safari Adventures program.
“That was called a ‘giraffe’,” the android replied. “Centuries ago, they lived on Earth’s continent of Africa, before the last died in captivity in 2061.”
It might have been fiction, but always hit me with a deep sadness, and made me think of the species that have vanished even within the last century or so — the Tasmanian tiger, Barbary lion, and other regional variations of mammals, birds, and frogs — maybe as many as 500. It’s possible that the generations that follow us will talk wistfully about the time when elephants roamed savannahs and fierce white bears hunted on ice floes. Will we let it happen?
According to the UN Secretary General at December’s COP15 biodiversity summit in Montreal, our current impact on the natural world amounts to “suicide by proxy”, and we’re taking a lot of innocent bystanders with us. More than a million species are currently at grave risk, and signs are pointing towards our being on the verge of a major, human-caused extinction event on par with the five others in the fossil record, with the most recent one ending the Age of Dinosaurs 65 million years ago.
This time, the catalyst isn’t asteroids and mass volcanic eruptions — it’s an accelerating loss of habitat to fuel human growth and industry. The biggest mandate sought at COP15 was an agreement to permanently set aside 30% of world’s land and water as conservation zones. The target is admirable — but there is no equitable or achievable path to execution.
More than 80% of remaining biodiversity is under the stewardship of Indigenous peoples, and most in the impoverished Global South. No real proposals have been made for the countries whose exploitation is causing this extinction cascade to finance habitat protection at scale — the burden is being placed on those who can least afford it. On December 13th, delegates from developing countries walked out of the talks in protest.
We can’t simply sacrifice the 1/5th of the world’s population who rely on forests for their livelihoods and ban them from accessing resources in conservation zones, and expect the poorest governments to finance expensive monitoring and rewilding programs.
What we need is mass mobilization of trillions of dollars in both public and private sector capital to ensure that sustainable development more than makes up for lost income and the effects of climate change in developing countries. Our aspirational green economy has to be a fair economy.
And as financing mechanisms like ESG funds and assets like carbon and biodiversity credits continue to attract capital to fund habitat protection, it also has to be an trusted economy. Currently, voluntary carbon markets are wracked with fraud and errors, and US $1 trillion in misrepresented ESG investments just got stripped from the European market. At this critical time, wasting resources while thinking we’re making progress is worse than doing nothing.
Overcoming these challenges will take technological solutions, in addition to political and economic will. Cryptocurrency and financial services capture most of the headlines and development dollars, but I often tell people that sustainability is the best possible use case for blockchain technology. Sometimes I think it sounds like hyperbole. But really, is anything more important than using these tools to fight existential threats to both our civilization and a million other species?
Here are three of the key ways that blockchain can — and already is — being applied to combat biodiversity loss and innovate solutions to financing conservation:
1. Managing Biodiversity Data
We can’t combat threats to habitats if we can’t measure and track them — and we need better ways of aggregating, sharing, and using information, both about habitats and conserved animals.
Digital tracking systems used to monitor endangered species like tigers and sharks are facing rising threats from hackers, who can access GPS data from conservation databases to gain real-time information about the location of high-value species, and data from individual animals is challenging to manage and share. Blockchain applications, including digital identity, can provide a secure way of tracking species and their surrounding habitats.
At ESG1, we recently partnered with decentralized climate data platform dClimate, which uses blockchain to create an ecosystem for sharing trusted information about weather, forests, and carbon sinks.
Manavi Garg, Head of Strategic Partnerships, said that climate change is a major contributor to habitat loss. “There is limited awareness around biodiversity being one of the first aspects of our ecosystem that gets directly impacted due to climate events such as wildfires and heatwaves, and the rate at which we are losing essential features such as coral reefs.”
According to a study by Yale, a lack of accurate, accessible information is preventing us from understanding the true extent of biodiversity loss and the effects of climate events. Blockchain will be essential for creating a global web of trusted data that can guide priorities and policies, while monitoring at-risk environments.
2. Verifying and Scaling Funding Mechanisms
We need to be able to trust the products and assets meant to fund conservation, and this is one of the critical challenges we focus on at ESG1. Compensate, a Finland-based carbon management and research company, found that 90% of the voluntary carbon credits they studied from major registries failed to meet basic criteria for a ton of sequestered carbon, and greenwashing scandals have shaken trust in other climate financing tools like ESG funds.
Greenwashing isn’t always intentional — data management and verification is a massive challenge, and traditional, manual tools like surveys and spreadsheets aren’t capable of scaling to support what are predicted to become US $100 billion voluntary carbon and $30 trillion ESG investing markets by 2030. We need to automate measurement, verification and reporting, and build products that carry provenance data across markets.
Blockchain enables us to aggregate data captured by devices like sensors and register it on-chain, which creates an immutable and traceable record of events like carbon sequestration or conservation. Instead of using spreadsheets and manual surveys to verify projects, companies like assurers can confirm its authenticity and the correct application of carbon measurement standards online using programmable smart contracts.
Once verified, this data is permanently attached to a token — a digital asset — allowing it to be traced back to the point of origin regardless of how many times it’s traded, or how many borders it crosses.
3. Inclusive Financial Models
We urgently require new ways for communities to monetize the preservation of ecosystems to fund conservation and compensate for lost income from industries like forestry and oil and gas. For Indigenous communities and developing countries, blockchain can help create and scale financing models like biodiversity credits and other nature-based solutions.
Early in 2022, ESG1 launched a project with Alberta’s Swan River First Nation and rewilding partners Project Forest to use tokenization to fund the restoration of forest habitat on the reserve, and collaborating with innovative natural capital firm Rebalance Earth, which has pioneered models for calculating and valuing the carbon sequestration benefits of keystone species like African forest elephants, to explore using blockchain as a funding tool for protecting biodiversity in Canada’s threatened Northern Boreal ecosystem. Revenue generated by projects like these, which create in-demand assets for ESG investors, will be an important source of economic development and climate financing for at-risk communities.
Walid Al Saqqaf, Rebalance Earth CEO and co-founder, said that “We have found that the vast majority of people care deeply about nature and keystone species. Giving them an opportunity to protect it in a transparent, traceable and trusted manner is key. Imagine seeing in near real time the elephant you’re protecting on camera whilst knowing that their preservation ensures that the forest can do a better job at sequestrating carbon from the air.”
Technologies like blockchain are only one part of the solution to the 6th Mass Extinction — there has to be an unprecedented shift to an economy that values nature for its essential, life-giving properties, rather than its extracted resources, and makes sure than the vulnerable peoples most affected by the destruction of habitats aren’t also shouldering the heavy burden of protecting them.
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