As part of Conviction’s #CryptoClimate series, expert no. 4 of 6 from Nori, Paul Gambill has answers to our questions. Paul is CEO of Nori, the Seattle-based startup and carbon marketplace built on an Ethereum blockchain NFT to record transactions and document offsets.

Building on Conviction’s Q&As with JustCarbon and with Moss Earth, Nori argues there is nothing uniquely different about blockchain in how the technology, as a next-generation, ‘Web3’ innovation can drive positive change too.

Subscribe for free and head to #CryptoClimate for a full roundup, of what’s happened and what’s next with Likvidi and Cofndrs.

Paul Gambill, CEO of Nori

How do you square the circle that blockchain can be both a solution, reducing emissions, while crypto is such a large source of emissions?

All computing-based technologies consume energy in their operation. Watching YouTube, reading Bloomberg terminal data, or video calling a doctor all use energy, and society has determined that that use is valuable enough to continue doing. Using blockchains for solving large-scale social problems is exactly the same, and there is nothing uniquely different about blockchain technology in that respect.

There are really only two blockchains that consume lots of energy as part of their proof-of-work consensus mechanism - Bitcoin and Ethereum. Much of that energy is in fact renewable but, even so, Ethereum is going to be transitioning to proof-of-stake later this year which will make its energy use essentially negligible.

At Nori, we are transitioning to Polygon, which is even more energy-efficient. Applications that want to be carbon-neutral or carbon-negative should build on layer 2 or alternative layer 1 platforms that utilise proof-of-stake in order to emit less and then pay for carbon removals to remove the rest.

“Using blockchains for solving large-scale social problems is exactly the same [as tech society has determined to be valuable], there is nothing uniquely different about blockchain technology in that respect.”
Paul Gambill, Techstars. Image Credit: Nori

What ‘watch outs’ would you give non-specialist investors for potentially low-impact startups, and how to spot the best of the rest?

The most important question to ask is: ‘Will any carbon credits be traded or sold more than once?’ Any startup that perpetuates the trading of carbon credits is not going to result in an acceleration of the rate at which we draw carbon out of the atmosphere.

Then the single most important piece of information that is needed to unlock and scale climate restoration is pricing, which is what’s been missing to date. How much is it worth to us - and future generations - to remove carbon dioxide from the air? To restore biodiversity?

If we want more people to start new businesses and invest in better technology to restore the climate, then they need to know how much money they stand to make in the process. Cryptocurrency is the perfect tool to create new financial incentives for specific actions that society wants to see.

“Ask, ‘Will any carbon credits be traded or sold more than once?’ Any startup that perpetuates the trading of carbon credits is not going to result in acceleration of the rate at which we draw carbon out of the atmosphere.”

What makes carbon credits on blockchain any better than conventional markets, emissions or otherwise?

Since the beginning of carbon offsetting in the late 1990s, individual carbon credits have been traded more than once. This happens because the original designers wanted a tradeable commodity asset to facilitate price discovery. But selling a carbon credit more than once means that every subsequent sale is just pushing a piece of paper around and enriching middlemen.

We should be designing our systems so that every new dollar spent results in net new carbon coming out of the air. Transacting in carbon on the blockchain ensures that the carbon removal is immediately retired, that the transaction is transparent, and that we can create a separate tradeable asset in the form of a cryptocurrency pegged to one tonne of CO2.

“Cryptocurrency is the perfect tool to create new financial incentives for specific actions that society wants to see... for more people to start new businesses and invest in better technology to restore the climate”

Subscribe for free to leave a comment below, follow Paul on Twitter, LinkedIn and Nori on Twitter and LinkedIn too.

Join the conversation

Great! You’ve successfully signed up.
Welcome back! You've successfully signed in.
You've successfully subscribed to Conviction News.
Your link has expired.
Success! Check your email for magic link to sign-in.
Success! Your billing info has been updated.
Your billing was not updated.