Background
Our mission, the industry, and why carbon-offsets matter.
Mission
Savimbo’s mission is to apply high-tech principles and protocols to solve entrenched scientific and social problems.
"I can't help but wonder how much further technology could go if we solved things for people who had the biggest problems first — and then made games." — Karen Killroy
Savimbo aims to financialize the emerging market for reforestation of jungle-adjacent pasture for international carbon offsets (green-carbon credits). By tokenizing and incentivizing creative work from the populations that can physically restore rainforest. The project sequesters carbon while enriching soil (biochar credits), and preserves native jungle (biodiversity credits). Based on mobile Web3 protocols, Savimbo enables subsistence farmers to transact in the global carbon-offset market, tending to local forests but selling globally, creating fair-trade international carbon offsets, cutting out middlemen in the market, and increasing impact.
Setting
Carbon offsets are a key value rural areas can offer urban areas. It's a modern handshake between the pastoral and the digital, the old and the new. Carbon offsets stitch our world together, planning seven generations into the future in a global society where 68% will live in cities by 2050.
It might be a new market, but it's not going away. The legally-binding international 2015 Paris Climate accords set a goal of limiting to 1.5°C the global temperature rise caused by greenhouse gas accumulation in the atmosphere - and as of 2022, 193 countries have ratified the agreement.
Unlike many international agreements, these aims are outcome-driven, independently verifiable, and ecologically based. We either reduce global temperatures, or we don't. While there are many technologies for reducing atmospheric carbon dioxide, nature-based solutions are currently the most readily available and cost-effective to scale.
"Trees have already been invented." – Hecht et al. Carbon in woodlands
The industry
The global carbon capture and sequestration market was $2 billion in 2021 and is expected to reach $7 billion by 2028 with a CAGR of 19.5%. The primary market drivers are large-scale production facilities and purchases by industry giants such as Exxon Mobile, Shell, and Chevron.
But these are conservative estimates:
In 2021, Bloomberg forecasted an 18x growth by 2030 in market demand for carbon offsets.
In 2021, McKinsey forecasted a 15x growth by 2030, and a 100x growth by 2050.
Primary drivers of growth include increasing government action to curb emissions of greenhouse gasses. North America is set to lead the market fueled by rising investment in R&D, however as both organizations note, high initial cost and feasibility associated with new projects may hinder market growth.
However, most experts today recognize that carbon credits are highly underpriced and that the situation is dramatically more expensive than previously predicted. Industry losses due to climate change are precipitating a sea-change in the market as the financial cost of environmental threats skyrockets.
"Since the 1980s the number of registered weather-related loss events has tripled; and inflation-adjusted insurance losses from these events have increased from an annual average of around $10bn in the 1980s to around $50bn over the past decade." — Lloyd’s of London, Breaking the tragedy of the horizon – climate change and financial stability, 2015
Emerging market
The US federal government has a strong influence on the regulated carbon offset market, however California is considering the approval of the Tropical Forest Standard which will enable offset purchase from developing nations.
Currently, the most lucrative sales of carbon credits go through the American Carbon Registry (ACR) (ACRE Investment, personal communication, April 1st, 2022). However, the registry doesn’t issue credits for land-use projects in REDD+ countries, such as Colombia. ACR's partner organization Architecture for REDD+ Transactions (ART) works exclusively with national and subnational governments (ACR, personal communication, May 4th 2022) and will transact with Indigenous groups only through these agreements.
Brazil has historically done the most work in deforestation, but Colombia is an emerging economy that is closely reliant on US industry for political stability. However, the 2022 Colombian election brought in a presidential candidate who is historically leftist, friendly to Indigenous groups, and whose anti-oil platform included US partnerships for biodiversity credit. The new vice president is known for her environmental activism.
To implement the changes, effective economic models need to emerge in these regions.
Forest carbon value alone often exceeds revenue from the main drivers of deforestation (e.g. oil palm; but application of REDD+ to incentivize restoration has been problematic, due to issues of governance and socio-economic conditions, particularly fluctuations in carbon credit prices. To ensure revenue flows mostly into local economies, local people should have direct access to carbon markets as well as low-interest start-up loans, to fund restoration work and support their families until break-even is achieved. Furthermore, transaction costs, including monitoring, reporting and verification, should be minimized by building local capacity, to reduce dependency on paid external agents." – Sacco et al. Ten golden rules for reforestation, 2021
Emerging technologies
Technology, and specifically Web3 technology, provides unique opportunities to this market. Blockchain is most valuable when collaborating parties have competing interests, to reduce middlemen, and to prevent small-scale systemic graft.
This technology is cozying up to the offset market via three mechanisms:
Offset exchanges are tokenizing carbon credits for the international market and integrating into blockchain platforms who face critiques over their environmental footprint.
Blockchain technology in use for supply-chain can easily and transparently track trees at the individual level, reducing middle-men translators and governmental validation teams which have a historically strained relationship with rural projects.
Cryptocurrencies are being adopted faster in developing nations without stable currencies. They can enable traceable micropayments reducing graft and corruption in transacting bodies and enabling farmers to earn stable money on the international market for the fair value of their trees even if they don’t currently have a fiat bank account.
DAOs can manage collective lands. Enabling collective ownership of non-deforested jungle and collective micropayments for biodiversity credits diverted to regional infrastructure projects (i.e. schools, roads, public transit, and satellite internet access).
Blockchain technologies are ideally suited to the difficulty in pairing carbon buyers (multinational corporate entities with strict international scientific regulations) with fair-trade carbon sellers (individual subsistence farmers in a low-trust, remote, and historically unstable region). Concurrently, DAOs can buy, collectively own, and preserve native jungle in legal structures and collective ownership mechanisms that are ideally suited to traditional Indigenous conservation practices.
We also utilize emerging science on sequestration via low-tech biochar, an emerging Verra standard with the potential to sequester carbon for up to 500 years, while improving health of tree plantations and agricultural soil.
Chaos theory
A love letter to Nature's inherent chaos.
¨Rather than being an end goal in itself, reforestation is a means to achieving various goals, typically climate-change mitigation, biodiversity conservation, socio-economic benefits (including food security), soil and hydrological stability and other ecosystem services." – Sacco et al. Ten golden rules for reforestaion, 2021
Chaos and complexity theory is the science of predicting biological systems that have open inputs, quantum change, are subject to initial conditions, and have nonlinear, and often fractal patterns. In other words forests, global economies, and disruptive technologies.
In a chaotic system, small iterative changes are more effective because these systems can absorb large inputs but be disrupted by small ones. While we don´t always address the esoteric science behind our designs, we felt it relevant to point out that our design is small, and simple, by intent.
Last updated
