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Greener E-Wallets: Blockchain Integration of Mangrove Assets as Carbon Tokens Towards Planetary Health

By Chad Patrick Osorio

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Citation

Osoria C. Greener E-wallets: blockchain integration of mangrove assets as carbon tokens towards planetary health. HPHR. 2022;66.  

Greener E-Wallets: Blockchain Integration of Mangrove Assets as Carbon Tokens Towards Planetary Health

Abstract

Mangrove protection is necessary for planetary health; however, they are not as protected as they should be. How can we incentivize greater protection for these assets utilizing fintech?

 

This project proposal envisions three phases:  First, the tokenization of mangroves in underserved coastal communities in Quezon, Philippines;  Second, the launch of an e-wallet which allows users easy access to these electronic assets for trade or for use, and;  Third, the gradual integration of mangrove tokens along with other carbon and environmental tokens into a single platform to encourage easier trading.

 

This initiative aims to provide concrete assistance to public health by promoting local biodiversity and community security; help further climate justice through inclusive sustainable finance, and, ultimately; further the goals not just of environmental, but also, planetary health.

Introduction

Forbes defines cryptocurrency as “a medium of exchange that is digital, encrypted and decentralized.”1 It is based on blockchain technology, online ledgers of transaction recordings and asset tracking. Entries on these ledger are meant to be unchangeable, to be shared only within permitted members of a network.2 These features highlight how blockchain has made cryptocurrency transactions private and secure.

Such is the value that these security and privacy features add that as of Q4 2021, cryptocurrencies have a total market value of US$ 2.0 trillion.3

However, the challenge with cryptocurrencies is that many of them are based on perceived value.4 This is why massive inflation and deflation can occur with the use of these tokens.

A counterproposal to address this concern is to use real-world value as basis for these electronic assets.5 Cryptocurrency values can be based on existing property outside the virtual world, examples of which can be real estate and precious metals.  Another example of cryptocurrency pegged on real-world value is the carbon offset token.6

Some carbon offset tokens are based on the number of trees planted on specific parcels of land, and are commonly known as Green Carbon Tokens; others are based on seagrasses, tidal marshes and mangroves, referred to as Blue Carbon Tokens.

Funding these tokens can help rejuvenate these areas, increasing both their real and virtual value over time. By investing in these tokens, the value of which relies on the property’s carbon capture capability, it would be in the best interest of everyone involved to protect them, helping ensure long-term sustainability to fund their growth.7

Current Challenge

For sure, there are a number of different mechanisms based on financial systems to stimulate carbon offsetting measures. 8 This includes macroeconomic measures like the global carbon trade and vigorous implementation of general environmental policies, to microeconomic ones such as voluntary carbon offsetting by firms and individuals alike. 9 In fact, the global carbon market is worth an estimated US$851 billion, registering a growth of 164% in the past year.10

 

However, connecting existing tokens with carbon offsets is hypothesized to be the  most practical approach to mitigate the climate impact of blockchain technology.11

 

 

Unfortunately, carbon tokens at present are very limited. Compared to other types of cryptocurrencies, there are only a few carbon tokens in existence, and many of them have not taken off the ground. While data shows that their adoption has generally increased, resulting to a per-tonnage value of US$4.65 in June 2021 to US$14 as of April 2022,12 it is still important to note that they comprise only a very small part of the global cryptocurrency market.

 

One of the reasons for doing so is the difficulty to trade them, especially since there are no open platforms to do so. These assets, while growing, tend to stagnate compared to other tradable ones, including stocks and even crypto.

Illustration 1. Sample Carbon E-Wallet Concept

A Potential Solution

Creating a handy wallet, stored on mobile phones, which allow for the trading of these carbon tokens, can address this. 

 

This project envisions three phases:

First, the tokenization of mangroves in underserved coastal communities in Quezon, Philippines;

Second, the launch of an e-wallet which allows users easy access to these electronic assets for trade or for use, and;

Third, the gradual integration of  mangrove tokens along with other carbon and environmental tokens into a single platform to encourage easier trading.

 

First, why mangroves?

 

Mangroves provide myriad benefits, including environmental, safety and economic value.13 It increases biodiversity, as well as protect coastal communities, traditionally underserved especially in developing countries.

Protection of mangroves through tokenization directly contributes to several UN Sustainable Development Goals (SDGs), including SDG 11: Sustainable Cities and Communities, SDG 12: Responsible Consumption and Production, SDG 13: Climate Action, SDG 14: Life Below Water, and SDG 15: Life on Land.14Mangrove protection also impacts other SDGs, considering that all of them are inherently connected and interreliant. 

 

Second, why pilot the project in Quezon Province, Philippines?

 

After all, more than 30 countries are directly impacted by mangroves, including global economic leaders like the US, Australia and New Zealand, and developing population powerhouses like Brazil, India and Indonesia. They are part of a tight economic and environmental web around the world.15

The focus of the project proposal on Quezon Province lies in the fact that much attention has already been given to other areas. Cryptocurrency Mangrove DAO, for example, focuses on Myanmar; SeaTrees have projects in the US, Cambodia and Indonesia; Global Mangrove Trust’s Grove focused on India and greater Southeast Asia.16

 

In addition, a number of towns and villages along the coast of Quezon are in grave 17 This makes them high priority on the list of communities which require both preparation and protection from the consequences of natural calamities.

 

Tokenizing these mangroves gives the community, the local government and the investors economic incentives to protect them, to ensure that they grow and develop. This can serve as a catalyst towards expanding protected areas and encouraging forest growth in the coastal communities of Quezon Province.

 

A third question which can be asked pertains to the need to create an e-wallet.

 

This is answerable in two parts.

First, the creation of an e-wallet serves the purpose of longevity: it establishes the fact that this is not just a one-time project, but rather an investment in which the parties concerned can monitor its financial growth over time. This is in line with the concept of inclusive sustainable finance, allowing even individual, small-time investors to put their money into initiatives which are environmentally-friendly but at the same time  yielding positive financial results.

 

And second, integrating other carbon tokens into the e-wallet through a particular blockchain technology yet to be identified can compound its environmental benefits. Creating a platform for more trade possibilities increases potential value of these tokens through network effects. This could, both in the short term and long term, contribute to the greater challenge of global carbon offsetting and battling climate change through inclusive sustainable finance.

Conclusion

From the above-mentioned scenarios, it is clear that mangrove tokenization is a promising way to allow even individual investors to use their money to help protect the environment, but at the same time reap profits in return.

But how does this address public health concerns? After all, shouldn’t the money invested be better utilized towards hospitals and healthcare centers?

 

This paper suggests that the answer to this is, “not necessarily.” This initiative seeks a more preventive perspective to the concept of public health. Hence, the concept of planetary health is important to discuss here.

 

Planetary health recognizes the health of the planet as a system: it connects the biosphere together with its living and non-living environment, as well as the society in which it operates.18 It approaches public health challenges through a myriad perspectives, transdisciplinary and solution-oriented at the same time.19 The focus is not simply on disease treatment, but rather its prevention and the maintenance of well-being.   

 

In the same vein, carbon tokenization seeks to utilize cutting-edge fintech to engage more people to invest in environmental protection initiatives. Focusing on mangroves, particularly in coastal communities in the Philippines, can help concretize this initiative and ground it at the public health level by increasing community security from natural calamities, aiding biodiversity development, and ameliorating environmental resources, among many others.

At the same time, it can serve as an economic initiative to promote the protection and erection of protective natural barriers for these traditional coastal communities, which are often underserved and marginalized. These coastal villages in Quezon Province can also be used as a pilot project, and in the future, expanding mangrove and natural assets tokenization to more areas in the Philippines and in Southeast Asia.  

 

This, and the further creation of the e-wallet for blue and green tokens, can help consolidate greater reach and volume of the global carbon token trade. Ideally, it can significantly contribute to increase carbon capture, ameliorating ambient environmental conditions in turn; promote climate justice through inclusive sustainable finance, and, ultimately; further the goals not just of environmental, but also, planetary health.

References

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  4. Cryptocurrency has “no intrinsic value” and investors could “lose all your money”, says Bank of England chief. finance.yahoo.com. Accessed May 22, 2022. https://finance.yahoo.com/news/cryptocurrency-no-intrinsic-value-investors-163626143.html
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About the Authors

Chad Patrick Osorio

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