Revolutionizing Climate Finance: Inside KlimaDAO's Mission to Save the Planet
Climate change is no longer a future threat; it is happening now. Climate experts agree that humans have caused significant damage to the planet's climate system through the release of greenhouse gases (GHGs) such as carbon dioxide, methane, and nitrous oxide. The earth's temperature is increasing at an alarming rate, resulting in catastrophic weather events like floods, droughts, and hurricanes that endanger life on the planet. As a result, we must reduce the amount of carbon dioxide and other GHGs we emit into the atmosphere, and we must act quickly.
According to the Intergovernmental Panel on Climate Change (IPCC), global temperatures have risen by 1.1°C since the pre-industrial era, and are projected to rise by another 1.5°C between 2030 and 2052. This warming trend is driving more frequent and severe weather events such as hurricanes, heatwaves, and droughts, and threatens to cause widespread environmental and economic damage in the coming decades. The Emissions Gap Report 2021 from the United Nations Environment Programme (UNEP) states that even with the commitments made by countries to cut emissions, the world is still heading towards a temperature rise of 2.7°C by the end of this century. This is far above the 1.5°C target set in the Paris Agreement , which aims to limit global warming to 1.5°C above pre-industrial levels.
One of the biggest challenges we face in mitigating the effects of climate change is closing the emissions gap. Put simply, we are currently emitting more greenhouse gases than we can afford to if we want to limit global warming to 1.5°C or less. According to the United Nations, we need to reduce global emissions by 7.6% per year between now and 2030 to stay on track with this target. Unfortunately, current policies and initiatives fall far short of this goal, leaving us with a growing emissions gap that could have catastrophic consequences for our planet.
Closing the Emissions Gap with KlimaDAO
Enter KlimaDAO , a blockchain-based platform that is working to solve this problem by leveraging the mechanics of the Voluntary Carbon Market . This market enables individuals and organizations to purchase carbon credits, which represent a reduction in carbon emissions elsewhere in the world. By buying these credits, and removing them through the market (known as ‘retiring’), participants can offset their own emissions and support projects that are actively working to reduce greenhouse gas emissions. These projects include activities like reforestation, renewable energy, and energy efficiency.
While the Voluntary Carbon Market is a promising solution, it is not without its challenges. One of the significant problems is that it lacks transparency, traceability, and accountability. Additionally, the carbon credits produced by offsetting projects are often of questionable quality and not appropriately regulated. This issue raises the question of whether the carbon credits purchased by individuals, companies, or organizations indeed make a difference to the environment.
Many carbon credits are of poor quality, and there are concerns that some projects may be overstating their impact on emissions reductions. This has led to a lack of investor confidence and a limited pool of funding for climate-related projects. Additionally, there are concerns about the additionality and permanence of the projects. In other words, how can we ensure that the projects wouldn't have happened anyway or that the carbon captured or reduced would be permanent?
KlimaDAO is tackling these challenges head-on by building a blockchain-based platform that provides transparency, accountability, and trust in the Voluntary Carbon Market. By leveraging the power of smart contracts and decentralized finance (DeFi ) protocols, KlimaDAO is accelerating the transition of the Voluntary Carbon Market onto the blockchain. Digital carbon credits – those that exist on public blockchains – benefit from deeper liquidity, greater transparency, ease of access, and allowing participants that purchase and retire carbon credits to track their impact in real-time.
Source : KlimaDAO
KlimaDAO's Tools and Initiatives
Automatic Offsetting on Sushi DEX
One of the key benefits of digital carbon is that it acts like a DeFi ‘lego’. Smart contracts can be used to trigger purchases and carbon retirement transactions based on pre-defined rules. One use case is KlimaDAO’s automatic offsetting integration on the Sushi DEX , which enables users to offset their emissions every time they make a transaction on the decentralized exchange. Sushi users just have to click an ‘opt-in’ button, and once opted-in, every token swap on Sushi automatically offsets its own carbon footprint. This infrastructure can be rolled out across any DEX or even centralized exchange – enabling a world where millions of small transactions at near zero cost to users come together to have a meaningful impact on driving financing to carbon offset projects. These integrations make it easy for everyday users to participate in the Voluntary Carbon Market without having to navigate complex systems. KlimaDAO aims to make carbon offsetting more accessible, convenient, and cost-effective for everyone.
Love Letters to the Planet
Another innovative initiative from Klima DAO is its Love Letters to the Planet project, which allows anyone to contribute to climate solutions by sending a message of support to projects that are working to reduce emissions. This simple yet powerful tool helps to build a sense of community around the fight against climate change and encourages more people to get involved in supporting climate-related initiatives. Love Letters to the Planet is a community-driven movement, built on top of open-source, decentralized KlimaDAO infrastructure, that allows individuals to write and post their messages of love and support for the environment. Each love letter represents a contribution – big or small – that can add up to a significant impact. This initiative shows that even small actions can make a difference in the fight against climate change.
Funding Smokeless Cookstoves for Rohingya Refugees in Bangladesh
KlimaDAO is a token-holder-governed protocol, and has accumulated a treasury valued at over $100m in 2022. While developers can build with KlimaDAO infrastructure and tooling, carbon offset projects are able to apply directly to the KlimaDAO community through the KlimaDAO Forum to receive funding. One such example is the smokeless cookstoves project for Rohingya refugees in Bangladesh . This project helps to address multiple Sustainable Development Goals, including clean energy and gender equality. The cookstoves reduce the amount of smoke produced during cooking, which improves air quality, reduces the emissions of greenhouse gases, and reduces the risk of respiratory diseases – among many other benefits, including improved economic opportunities for women.
In late 2022 the project developer SCB Group proposed to the KlimaDAO community to allocate 250,000 USDC from KlimaDAO’s Treasury to finance the project. After evaluation by the community, the proposal was approved, proceeding to a Snapshot vote, where token-holders voted 99% in favor. KlimaDAO stands to receive delivery of carbon credits issued by the Improved Cookstoves project over the coming years, in exchange for the capital invested.
The Universal Carbon Marketplace
KlimaDAO is continuously working to improve and expand its infrastructure. They recently announced the launch of a new marketplace that will allow for the purchase of carbon offsets through a user-friendly interface. This product aims to make it easier for individuals and businesses to take meaningful action toward mitigating their carbon footprint.
Carbonmark has the largest selection of digital carbon credits worldwide where users can buy, sell, and retire digital carbon from any project instantly with a 0% transaction fee. Carbonmark is a step change in making it easier for carbon offset projects to be matched with organizations and individuals looking to offset their carbon footprint.
KlimaDAO is a forward-thinking organization that is leveraging the power of blockchain technology to address some of the biggest challenges facing our planet. By providing an innovative solution to the problems with the Voluntary Carbon Market, KlimaDAO is empowering individuals and organizations to take meaningful action toward mitigating climate change. Through its various initiatives and projects, KlimaDAO is making a positive impact on the environment and society as a whole. As we face an increasingly urgent climate crisis, it is encouraging to see organizations like KlimaDAO taking action to create a more sustainable future.
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