Ep. 21 Carbon Markets & Blockchain with Marcus Aurelius from Klima DAO

Welcome back from our summer break! Marcus Aurelius from Klima DAO joins us to discuss how blockchain technology can revolutionize the carbon offset market. Marcus has a background in data science and data engineering and is passionate about leveraging data to solve problems and make better decisions. Marcus sets the stage for us by sharing how nearly 2 trillion tons of CO2 have been emitted since the industrial revolution, yet the carbon markets to date have yielded only 2 billion CO2 credits, with only about half being retired. This is a huge mismatch, especially with an estimated 40 billions tons of CO2 being emitted yearly.

Klima is an exciting protocol for bridging carbon offsets onto the blockchain. You might ask why this is necessary? By bridging carbon offsets on-chain, Klima brings an unprecedented level of transparency and auditability to the carbon offset market. Klima is mostly focussed on the demand side of the carbon market, but we also learn about some of the carbon projects that Klima is supporting on the supply side who are using dMRV, digital measure report verification. This drastically reduces the cost of verifying ecological data claims, thus further democratizing the ability for smaller scale regenerative actors to enter the market.

Marcus is skeptical of the top-down approach, especially in the time frame needed to solve the environmental crisis. We discuss the key players in the carbon offset markets. From buyers to suppliers, Marcus shares nuanced insights on how this traditionally opaque carbon market is in dire need of improvement. In comes Regenerative Finance - bringing greater access to carbon markets with lower barriers to entry, allowing for greater liquidity, better on ramping rails for purchasing offsets, along with reducing green washing because the authenticity of impact claims can be verified and trusted.

We learn how AMM’s (Automated market makers) or decentralized exchanges, are the key innovation in decentralized finance because they allow for the creation of an asset with complex underlying behavior, unlocking the ability to create liquid assets out of previously illiquid assets.

Klima is looking to address the “Carbon tunnel vision problem” to move beyond just the carbon market and we learn of some of the exciting forward financing projects Klima is taking on. The beauty of ReFi is that some of these projects are cutting edge and would be traditionally hard to fund with the more conventional due diligence process of a philanthropy, but because KLIMA is a DAO, the public who holds the KLIMA token is able to vote and make decisions on where climate financing is invested.
Klima Twitter
Marcus' Twitter
Klima's Carbon Dashboard
Klima App
Offset your emissions with Carbonmark