Digital Tokens for Climate Action and Biodiversity Conservation Idea Bank
IDB Lab and the Future of Earth Lab by C Minds have transformed the list of potential applications into a Collective Idea Box that is open for anyone with a creative application to add it below.
The objective of this idea bank is to use the power of collective intelligence to inspire actors in the tech and climate-biodiversity ecosystem to explore these technologies taking into consideration appropriateness, context, and with the application of ethical and human rights risks analysis.
You can check the list of ideas and contribute bellow!
More access to capital for impacted peoples while innovating climate action and nature solutions
Tokenizing assets could be able to serve as collaterals for loan applications serving as guarantees.
Developing schemes for the payments of environmental services (PES) could harness the use of digital tokens by lowering the costs of transactions, easily identifying data providers, and asset owners, and enabling micro-payments tied to specific conservation targets registered and automated in smart contracts
Creating a mechanism for the payment of results, through proof-of-impact documentation, combined with smart contracts, implementing transparent payments to organizations in a seamless way.
Enabling incentives for better on-the-ground data production and citizen science by having a digital token system for data governance, IP biological data registration, and data production micro-payments. This can bring a new biodiversity data-knowledge economy and create methods for reliable, rapidly actionable information about projects and their impact. Moreover, it can help transform data into tradable assets.
Entrepreneurships and/or new entrepreneurships to innovate climate and biodiversity protection action
One of the biggest barriers to the conservation and restoration of ecosystems has been the lack of valuation of their ecological functionalities. The tokenization of natural assets could be an efficient way to introduce their economic value in a global market, expose their correlation to industries and enable transparent, decentralized financial transactions to fund restorative and conservatory activities on the ground.
Creation of new and innovative biodiversity capital market instruments. Likewise, digital tokens can open the doors to financial derivatives around nature-based solutions; as well as mechanisms to support the processes of nature as a new class of assets
Exploration of new forms of digital value for ecosystem services. For example, in marketplaces emerging in virtual worlds (Metaverse applications).
Development of reward systems that incentivize behavioral changes. Harnessing gamification and social media network principles to accelerate action.
Digitizing the governance of emerging biodiversity impact bonds using digital tokens could be explored. This could lead to lowering the access of entry to diverse buyers, automating processes, having verifiable impact metrics, accountability processes, proof of impact methods, and opening to secondary markets 22 trading. This could also create instruments that merge philanthropic funds and social impact capital seamlessly.
More transparent and agile environmental policies
Exploring digital tokens for result-based financing to help the advancement of biodiversity conservation and climate action targets such as the 2022 Kunming-Montreal Global Framework of Biodiversity. Moreover, digital tokens are harnessed by countries to implement, monitor, and report in a transparent and traceable way on their nature-based solutions (NbS), across their relevant plans and targets. Public policy on biodiversity sometimes lacks transparency and access to greater funding for implementation and digital tokens can be explored to address this.
New regulations and frameworks such as the ones created by the Task Force on Climate-related Financial Disclosures (TCFD) and the Taskforce on Nature-related Financial Disclosures (TFND) include provisions related to the value of nature and the risks that the loss of biodiversity represents to industries and financial institutions. These frameworks require the development of effective and transparent means to register nature-based data, trace results, and offer high standards of trustability and transparency to ensure the achievement of corporate sustainability targets. Digital tokens could add value to the operationalization of these new frameworks.
Developing digital, automated, and transparent carbon and biodiversity offset mechanisms powered by digital token-led platforms that could lead to greater transparency, traceability, and governance efficiencies. Tradable credits can exist in secondary markets. Also, the data driven tokenized carbon credits could serve to avoid double counting, bringing more transparency and accountability to the entire carbon market.
Enabling new forms of including biodiversity risks in the Environmental, Social, and Governance ESG targets (and ESG risk management data tools) to drive prioritization of action, investment, and credits that take into consideration biodiversity scores and nature externalities.
Allowing for traceable and transparent mechanisms around the UN statistical framework to account for biodiversity and ecosystems in national economic planning and policy decision-making as well as the European Union´s proposed international natural capital accounting initiative.
Creating Conservation Security Token Offerings (STOs) that could lower transaction costs and provide a mechanism for biodiversity assets to access capital markets. This would need regulatory clarity which is currently nonexistent.