ClimateClout — The NASDAQ for CO2
A white paper for a new climate exchange that was presented during the first hackathon for BitClout in early May 2020.
What is ClimateClout?
ClimateClout is a new type of exchange that lets you invest and speculate in the decarbonization of the world’s atmosphere with any money, and it’s built on top of the BitClout blockchain. When you buy ClimateClout, you make the world a cleaner place by supporting the decarbonization of the world economy.
The Problem
The current Carbon Credit markets are broken. Carbon trading is one of the fastest-growing segments in the financial world and its estimated market size is worth more than $270 billion, with forecasts predicting growth of up to $1 trillion within a decade.
Currently, 17 Emission Trading Schemes are covering 54 jurisdictions. In 2017, up to 20% of global emissions were covered by carbon markets. More than 40 different carbon compliance units representing fundamentally one universal underlying asset — the right to emit 1 tCO2e. The two most important carbon markets so far — the EU Emissions Trading System (EU-ETS) and the UN’s carbon offsetting scheme, Clean Development Mechanism (CDM) are not yielding satisfactory results. The EU-ETS scheme is currently over-supplied with carbon allowances. This means that power stations and factories have been allocated more allowances than they actually need, in part also due to the serious recession in many countries, but also due to intense industry lobbying. There has also been a flood of cheap CDM carbon credits, which has contributed to the price of carbon credits being so low that it becomes a negligible cost to the industry at large, and, more importantly, disincentivizes investments in low-carbon technologies.
Carbon trading is increasingly criticized because carbon dioxide emissions in industrialized countries are not declining at the necessary rate to avert catastrophic climate change. We need to put a real price tag on CO2.
Supply of ClimateClout Coins
The ClimateClout exchange has its own BitCloud-based “Creator Coin”, called ClimateClout. ClimateClout’s coin is pegged to the human-made CO2 equivalent emissions. Since 1751, the world has emitted over 1.5 trillion tonnes of greenhouse gasses. The initial supply of ClimateClout coins starts with around 1.5 trillion coins that are representing the historically emitted CO2 tons in the atmosphere since the Industrial Revolution. The supply will increase or decrease in line with the actual global emissions.
For example, currently, we emit over 51 billion tons of GHG-gasses annually. This would be added to the ClimateClout coin supply and the value of each coin would theoretically decrease or inflate.
In contrast, if we could sequester 51 billion tons of CO2 globally and successfully store it, the supply would decrease by the same amount. This would lead to a subtraction and the value of each coin would theoretically increase.
It is estimated that the token will be inflationary until 2050 and deflationary once we reach net-zero emissions. Our system incentives everyone to decrease carbon emissions and to sequester CO2 out of the atmosphere. Ultimately, our vision is to build the “NASDAQ for CO2”.
What are Country Emission Coins?
Every country on the platform gets its own coin that anybody can buy and sell. We call these coins “Country Emission Coins”. Every country will get a number of coins equal to their historical amount of CO2 emissions in tons. Countries with fewer emissions will have higher priced coins than countries with high and growing emissions due to their scarcity. Like every market, the price of each coin goes up when people buy and goes down when people sell.
Social Trading
Because our ClimateClout exchange is linked to BitClout, we will be the first to add social network capabilities to climate trading. Anyone that uses BitClout can buy our ClimateClout coin and support the project.
We will reward up to 10% of our proceeds to climate heroes. Climate heroes are people and organizations that are fighting for the environment. These leaders will help us to achieve a network effect.
We will also create Climate Heros NFTs that will be disrupted via smart contracts once per quarter to every long-term holder.
Potential Climate Heros: Al Gore, Greta Thunberg, Elon Musk, Chamath Palihapitiya, Greenpeace, NASA
Fair Reward System
We want to reward organizations that are helping to significantly reduce carbon emissions. Therefore, we will allocate ClimateClout coins to companies that reduce greenhouse gases by at least half a gigaton every year, about 1 percent of global emissions. If they can prove their contribution, we will reward them in the equal among coins, up to half a billion.
Opensource
In the spirit of many open source projects, ClimateClout will not include a comprehensive roadmap rather we embrace a collection of design principles, engineering best practices, and avenues for exploration. We will decide together with the community how to establish validator and governance nodes.
Climate Data Sources & Monitoring
We collaborate with researchers and data providers to build open-source data and tools mobilizing the global tech community — harnessing satellites, artificial intelligence, and collective expertise — to track human-caused emissions to specific sources in real-time — independently and publicly. We will contribute 10% of the available tokens to climate data providers and make further investments with the aim to offer better data reliability for our trading platform.
Potential Partners: ClimateTrace, CarbonMapper, MethaneSAT, Carbonplan, Planetlabs, Aclima, Global Carbon Atlas
Carbon Capture and Storage Solutions
We will also make investments in Carbon Capture and Storage (CCS) solutions. 10% of ClimateClout tokens have been set aside for investments in Carbon Capture and Storage (CCS) solutions. We need large-scale deployment of carbon removal to have a significant impact. Any decrease in our elevated CO2 levels will have a positive impact not only on our token value but also on the world.
Potential Partners: Carbon Engineering, Climeworks, Heirloom, Charm Industrial
Developers
10% of ClimateClout tokens have been set aside for ecosystem development to help bootstrap network effects and ensure a diverse and accessible community over the long term. Recipients of ClimateClout ecosystem support include entrepreneurial support organizations, non-profits, and academic institutions. These groups share ClimateClout credits with their communities and broaden accessibility.
ClimateClout ecosystem development programs are designed to reward the efforts of a decentralized community building sustainable value — not speculation. As a result, ClimateClout tokens distributed through these programs in the first year will be subject to lockups and transfer restrictions that expire no sooner than the first unlock date applied to early backers and the team. Ecosystem development programs also include token leases for purposes of staking, allowing reputable community organizations to participate in the network and earn rewards.
Problem Solved
Our trading platform allows everyone to participate in the fight against climate change. If we create a successful trading platform behind carbon dioxide, we will start a real financial movement. People need to feel to be part of the green revolution. Let’s solve climate change together.
