Picking up the baton from past generations, deforestation became one of the most striking calamities of the modern epoch. Having its roots in the bygone industrial era, it continues to sprout its dreadful consequences even into the age of increased awareness and enlightened concern about the environment. Although substantial progress has been made throughout recent years, it is still a long way to reach the point from which we can fulfil the full environmental recovery.
Reaching the highest level in 12 years, the deforestation of Amazon currently exceeds 11,000 sq km, thus becoming among the largest single areas of uncurbed CO2 emissions.
This also makes Amazon forests dangerously close to their ‘tipping point,’ when deforestation rates will finally outpace forest renewal speed. If the trend continues unchanged, by 2030, more than a quarter of Amazon’s forest will be forever gone.
And this is not all. Being the major driver behind climate change, this year’s deforestation in Brazil was pushed twice higher versus one year ago, being co-responsible for 2020 becoming the warmest year on record. This alarming fact has already been examined by the local authorities, which take various preventive measures that are unfortunately not always as effective as possible.
The lack of proper funding has been the central problem of the industry. While the organizations defending environmental rights are by and large non-profit, the issue of financing becomes crucial. For that, organizations place themselves in a heavy reliance on government that is not always so resilient to allocating a proper amount - especially during the harsh period of Covid-19. The times of a radical change require a cardinally new approach. Some organizations have already worked out that new technologies like blockchain may pave the way into the future. And MOSS became among first-movers in this field.
By creating the largest carbon credit platform, MOSS is leveraging blockchain's power for the sake of nature. Its token, MCO2, assists in raising funds through the purchase of carbon credits from certified protection projects. This approach has already brought phenomenal results: by gathering $10 million in 8 months, preserving and protecting almost 1 million hectares from the damage. Further, the company has already secured the support of high-rank authorities and C-level suite in a $3,3 million seed round, which also means that MOSS could reduce the level of CO2 by 20 million tons in the upcoming 4 years.
Sensing the impact this project could make, I decided to interview the CEO of MOSS. Our conversation helped me find out the pain points of our modern ecology while also seeing how carbon credit platforms could become the global environmental change movement drivers.
Edward Moon: Thanks for joining the conversation. Could you please share more on MOSS's idea and what changes it could bring to our planet on the fundamental level?
Luis Felipe Adaime: I founded Moss with the mission of combating climate change, via the development of the voluntary carbon credit market.
At Moss, we believe that climate change is the greatest challenge humanity has ever faced, and that the ‘business as usual” scenario of uncurbed emissions of Green House Gas will lead to catastrophic consequences for the planet in as little as 50 years.
The solution is to foster the carbon credit market, which attributes a cost to pollution, penalizing the biggest emitters and benefiting low carbon companies and environmental projects that avoid or sequester emissions.
Edward Moon: In your opinion, what are the problems the environment suffers from most? What preventive measures could governments, as well as all of us, foster in our daily routine?
Luis Felipe Adaime: Our greatest challenge as humankind, in my opinion, is connecting back to the planet. Classic economics has taught us that Nature is an endless source of resources to be “conquered” and “battled,” and culturally we are taught from an early age to regard Nature as an adversary to be beaten.
We need to become cognizant of the fact that we are animals and a mere part of the planet, and that we live in it and need to protect it.
There is a steep cost consequent from this alienation, which is that we are socializing the costs of environmental damage. So as a first step, governments and society need to change this behavior and teach us all to be inclusive in our relationship with Nature. As a pragmatic measure, governments and society need to allocate the cost of pollution to polluters, via the forceful purchase of carbon credits.
Once polluters bear the brunt of their actions, emissions will fall dramatically (as they have in European industry, for example) and we will begin to incorporate the cost of greenhouse gas emission into our consumption habits and products we buy.
Edward Moon: How can we all together create a more sustainable environment to live in? What play could blockchain technology play in materializing it?
Luis Felipe Adaime: We can begin by establishing carbon credit trading systems, and fostering those, so that money flows from polluters (forced to buy carbon credits) to environmental projects and “clean” companies, like Tesla or wind farms.
Blockchain has a key role in the development of carbon credit markets, which, as amazing as it may sound, were digital assets before the appearance of blockchain itself, but still trade in opaque, bilateral and over the counter markets.
The security, transparency and credibility associated with blockchain transactions would revolutionize the market.
Edward Moon: How can a more responsible nature treatment be promoted among industry actors, and what could be the main motive behind their behavior change?
Luis Felipe Adaime: Well, people react to incentives, and companies are beginning to note that it is becoming increasing hurtful for their sales if they are reckless about their environmental actions. Millennials have become 50% of the global workforce and will be 70% by 2025.
And Millennials care a lot about the environment: 80% of Millennials won’t buy any products from companies that have any sort of environmental or social taint. The boycott of Zara products because of semi slave labor in Southeast Asia and of Brazilian meat producers due to the Amazon deforestation are recent examples.
So companies are serving their best interest when they act responsibly in their relationship with the environment and mitigate their emissions via the purchase and cancelation of carbon credits.
Edward Moon: The data shows the highest rates of Amazon deforestation in 2020, exactly when the pandemic broke out. Although I had an assumption that lockdown will contribute to the suspension of all the controversial activities, the reality shows the opposite. If you could tell me your opinion, why did the deforestation rates evolve like that?
Luis Felipe Adaime: As we said before, people react to incentives. In the forest, farmers make a lot more money slashing and burning the forest to plant soy and raise cattle than from protecting it. Why? Because forested land in the Amazon is dirt cheap. Why is it dirt cheap? Because society attributes no value to the immense stock of carbon stored in the trees. This dynamic was completely not impacted by the Covid Crisis.
How do we change that dynamic? We create protection areas, certify the carbon they are protecting in the trees, and generate a huge yield: 100 hectares leads to an annual output of 5 credits, which go for US$ 5-6 in wholesale: so land is so cheap now that returns for buying forested areas and creating carbon projects leads to 25-30% returns. That’s way too high anywhere in the world - attracted by these high returns, people will buy forested land, driving its price up.
There is a tipping point when it becomes economically more advantageous for farmers to conserve rather than slash and burn - that’s when we will save the Amazon.
Edward Moon: Can climate change be reversed on the condition that we start taking proactive steps already now? How many years would it then take, do you think?
Luis Felipe Adaime: Absolutely. Humanity emits 55 billion tons of CO2 annually - this number was 25 billion just 12 years ago. As humanity, we mitigate only 12 billion out of the 55 billion we emit via the purchase of carbon credits.
Our challenge is to make both numbers (55 and 12) match at 25 billion in 5 to 10 years. By making it expensive for companies to pollute, the 55 emission should drop to 25 billion, and by making it a habit of consumers and society to require companies to compensate for their emissions, the 12 billion mitigation should rise to 25 billion. At that point, we will have “neutralized” the globe, and can thus avert a catastrophic dystopian scenario of 3 degree global temperature increase.
Edward Moon: The idea of MOSS is promised to open a completely new page in the battle against climate change. Would you assume that more companies start following responsible practices in the future by taking your example?
Luis Felipe Adaime: We hope to foster the mechanism for that to happen. Until we created Moss, it was insanely difficult and cumbersome to try to mitigate emissions. We want to make the process accessible, using the highest tech available and to make it as easy and simple as it can be. Hopefully competition will follow and compensating for one’s carbon footprint will become a habit like brushing our teeth.
Edward Moon: The carbon credit idea is something previously unseen in the world of blockchain. How can this technology help achieve your goals and promote sustainability?
Luis Felipe Adaime: There have been previous attempts at putting carbon credits on blockchain, but none with the scale and amplitude that moss has undertaken.
The carbon credit market was ridden with fraud and scandals in the past, in a time when technology could not yet provide the security and transparency created by the use of blockchain. I firmly believe that being able to track carbon credit transactions, in this ethereal, intangible asset, will be vital to create credibility for this solution once again.
Edward Moon: Tokenizing a part of the economy brings a lot of opportunities. However, placing a target on a non-profit sector seems quite risky; what are the biggest challenges you can expect to collide with?
Luis Felipe Adaime: Society is already demanding companies to mitigate for their impact. This is market forces and Adam Smith’s invisible hand at its best: companies like Amazon, Microsoft and Apple aren’t buying carbon credits because they are nice. They are buying because their consumers are demanding it. It is an inexorable trend.
Edward Moon: What lies ahead of the MCO2 token? What are your steps to build global awareness about the project and attract investment flows into the field?
Luis Felipe Adaime: We are investing heavily in technology to make the access to tokens, for example via B2B2C, as wide and easy as possible. The MCO2 is already the largest tokenized carbon credit in history, and we aim to amplify this status via significant investment in awareness and marketing of how the carbon credit system works, and how it will save our planet.