The Celo community has launched its Climate Collective, a community driven effort to fight climate change by tokenizing rainforests and other carbon appropriate assets. This is in a bid to step up Celo’s fight against climate change by competing for the Ksh. 11 billion (USD 100 million) carbon removal challenge by XPRIZE.
The collective features ten companies at launch including Curve Labs, Kolektivo, Moss, and Regen Network. It will propose that over the next 4 years, these tokenized trees be added to the Celo Reserve so that Celo stablecoins can be backed in part by rainforests, which are essential in the fight against climate change.
“Sequestering carbon and reducing greenhouse gases are the fastest ways we can help avoid the colossal effects of climate change with the IPCC predicting that we need to remove 10 gigatonnes of CO2 per year by 2050 to keep temperatures from rising 2C. This makes Elon Musk’s carbon removal XPRIZE competition, the largest in XPRIZE’s history, incredibly important in helping us fight climate change,” said Celo in a statement.
Inspired by the concept of natural capital backed currency in Charles Eisenstein’s Sacred Economics, Celo is proposing that over the next 4 years, up to 40% of the Celo reserve transition to tokenized rainforest and other carbon sequestering assets. Natural capital backed currencies work by backing money with things we want to see more of in the world. Existing and newly planted rainforest are a compelling choice because of their inherent value and impact on helping to mitigate climate change.
The Celo reserve is currently around Ksh. 94 billion (USD 850 million) in size. 40% of that would allow the protocol to buy and own Ksh. 37.7 billion (USD 340 million) worth of newly planted rainforest to back the Celo Dollar and Celo Euro stablecoins.
These trees would sequester roughly 43 megatons of Carbon per year, which would amount to 0.43% of the IPCC goal. Furthermore, if Celo Dollar and Celo Euro circulation were to grow to the size of USDC, we would reach 16% of the IPCC goal.
The Celo community has therefore decided to allocate 0.5% of the Celo reserve to voluntary carbon credits and initiated the purchase of tokenized Moss. Earth carbon credits that are protecting numerous forests. There are also existing efforts in the Celo community to plant and reforest deforested land.
Celo is therefore calling on web3 developer interested in tokenizing natural capital to reach out.