Despite the availability of global capital, the allocation of finance and the correct use of our resources are two issues that creep into every conversation about tackling climate change. As of 2021, the financing needs identified in the NDCs of 78 countries amount to approximately $5.8 trillion until 2030, far surpassing the current global flows of climate finance, which totaled $640 billion in 2020. 

Alongside the urgent need for increased investment is a requirement for technology that demonstrates adaption efforts. Blockchain technology provides a powerful way to encourage a greener future. Societal issues as big as this require global co-ordination that accelerates action. Only the most ambitious organisations will begin to fill the gaps in our understanding of the solutions.  

The Role of ReFi in Climate Action

ReFi is anchored in decentralized finance (DeFi) and regenerative economics, focusing on democratizing financial services and creating systems that restore and preserve the planet’s resources. 

By harnessing the power of blockchain technology, ReFi aims to mobilize capital to fund climate solutions and address the inefficiencies of traditional markets.

One of the persistent challenges in climate finance has been the limited participation of retail investors. However, Web3 platforms are revolutionizing financial instruments, making them accessible to retail investors. 

Transparent crowdfunding campaigns and fractionalization of climate assets are empowering individuals to contribute to climate solutions, democratizing access to sustainable investment opportunities. 

Web3 Projects Driving Climate Solutions

Now, let’s explore some of the most interesting emerging Web3 projects that are leading the charge in sustainability and climate action:

Celo 

Celo is a decentralized platform focused on establishing a global payment infrastructure for cryptocurrencies, particularly targeting mobile users. It facilitates payments to and from any phone number worldwide and supports the creation of decentralized applications (DApps) on its blockchain. Notable DApps on Celo include a universal basic income scheme and a crowdfunding platform for social causes. 

ReFi DAO

ReFi DAO provides education, opportunities and support to the ReFi ecosystem. It acts as a network society dedicated to regeneration. At the core lies the incubation and support of ReFi Local Nodes spanning across major regions globally. These local communities play a pivotal role in advocating for ReFi solutions from the bottom up.

EthicHub

The EthicHub team are one of the most impressive in the world of ReFi. They talk the talk but also walk the walk when it comes to bridging the gap between small farmers and essential financing for their agricultural endeavors. There primary objective is to uplift the living standards of small farmers by enhancing productivity and fostering a fairer supply chain. 

Plastiks

Plastiks is dedicated to combating plastic pollution with every transaction. Through the acquisition of Plastic Credits, businesses can demonstrate transparency in their sustainability efforts while simultaneously boosting their revenue with a clear environmental focus. 

Bitgreen

Bitgreen is a specialized blockchain designed to facilitate unrestricted capital flow into impact investing markets.

Renewablox

Renewablox offers a versatile commercial solution to address excess power by utilizing data centers, particularly in Bitcoin Mining, to absorb additional energy efficiently. Their solution is adaptable and applicable to any renewable energy source and geographic location. Additionally, they can customize solutions to mitigate methane gas production in various industries. While their focus is on solar and methane-related projects.

Regen Network

Regen Network, established in 2018, enables farmers and individuals to track soil regeneration efforts on the blockchain. Encouraging farmers to act as stewards of the land, the project incentivizes them to adopt practices like holistic grazing or agroforestry, which they can then market globally.

Toucan Protocol

Toucan Protocol, the world’s largest buyer of carbon offsets, is building carbon market infrastructure on the blockchain. By tokenizing carbon credits on the Polygon network, it democratizes access to carbon markets, allowing individuals to support a more sustainable future.

The Climate Collective

The Climate Collective is a coalition of companies leveraging Celo’s carbon-negative blockchain to accelerate regenerative applications. Through collaboration, they assess climate-focused organizations, connecting them with funding and partners to drive climate action.

Klima DAO

Operating as a decentralized autonomous organization, Klima DAO incentivizes companies to reduce carbon emissions by increasing the cost of emissions. It tokenizes carbon credits, motivating individuals to purchase and bond them for discounts, thus encouraging carbon reduction efforts.

Alternative Financing for Developing Countries

Developing countries face the greatest risks when it comes to climate extremes. IMF research shows that one single drought can lower economic growth by 1 percent in African countries. 

Finance is a critical enabler of climate action, as countries face the risks head on and strive to meet ambitious targets. High-income nations committed to raising US$100 billion annually by 2020 to support climate action in lower-income countries, but this target remains unmet.

Web3 funding solutions provide hope for developing countries burdened by debt and impacted by climate change. By leveraging natural resources and environment ministries, governments can finance projects generating carbon and renewable energy credits, promoting sustainable wealth transfer and mutual benefit.