#ReFiSummer heats up in Paris
by Alison Filler, Community Lead (Climate Collective)
#ReFiSummer arrived in Paris just in time for EthCC with temperatures reaching 40.5 degrees Celsius on July 19. Only two other days in Parisian history have broken this record high.
Inside the Celo Salon, attendees escaped the heat and enjoyed an entire suite of events designed around social and environmental impact. Conversations delved into the future of ReFi, environmental impact through social tokens, and how to build perpetual crypto funds for long term initiatives like climate action.
The Climate Collective also organized a series of off-site workshops. Participants from a range of protocols and projects took stock of goals and barriers within the ReFi movement, dove into Climate Collective’s ecosystem map of the web3 x climate space with partners at Toucan Protocol and Socialstack, and explored funder perspectives with industry experts from Allegory, Draft Ventures, and Eniac Ventures.
To round off the week, Filecoin Green gathered an impressive array of speakers for the Sustainable Blockchain Summit, where the Climate Collective’s Ikarus Janzen led an overview of new forms of natural capital and nature backed currencies.
Ed Walters of Allegory reflects enthusiastically on the growth of the ReFi movement over the last year. “There were exciting seeds in the web3 and climate space 12 months ago and now there’s a thriving garden,” says Walters. “Fifth Wall just announced a $500 million climate fund and invested over $4 million in Flowcarbon’s GNT pre-sale. New venture firms like Allegory, Draft Ventures, and Cerulean Ventures have emerged in the last 12 months to focus entirely on web3 and climate. Established firms like Union Square Ventures and Andreesen Horowitz have led large Series A rounds into ReFi projects like Flowcarbon and Toucan. And incredible projects like ReFiDAO have started to weave disparate themes and people into an action-oriented community.”
The growing attention of venture capital firms is not the only development feeding Walters’ excitement. He senses a tone shift in how the sector defines its ambitions and approaches new partners, as well. “Before, the discussion was much more around convincing ‘degens’ to become ‘regens’ and embrace climate as a large and lucrative market with embedded social good,” says Walters. “Now, the sheer complexity and scale of the problem/solution set in climate is so apparent, and the need for deep subject matter expertise — from policymakers, institutional investors, embedded operators, and scientists — feels acute and necessary. Web3 as a set of tools for addressing climate challenges feels much more sustainable and lasting than climate challenges as a tool for web3 to unlock new communities.”
What we took away
1. As the ReFi movement grows, we are beginning to encounter some key questions and divergences in the web3 x climate community.
The Tokenized Carbon Roundtable at the Sustainable Blockchain Summit allowed for some critical points to come to a boil, including:
- Supply vs. demand: Should our efforts to unlock carbon markets on chain lead with rigorous and evidence-based standard setting for credits (quality of supply) or with financial structures that support liquidity and price discovery to attract institutional buyers (scale of demand)? How do we balance these two dimensions of increasing the scale and improving the quality of carbon credits brought on chain?
- Incentive structures: What is the best way to incentivize retiring carbon credits on chain?
- Mass communication: How can ReFi help move the wider public beyond carbon tunnel vision and into more diverse climate action (i.e. biodiversity, social cohesion with environment, etc.)? Can ReFi help the broader crypto community to rebrand with an image of greater responsibility and credibility?
- Inclusion: How can we better involve communities who have trust barriers from historic exploitation and bring them into DeFi and ReFi? How can we share web3 tools so these communities can independently fund their own public goods?
- Collective action and accountability: How can we develop guidelines to innovate rapidly and recover responsibly from our failures? How do we ensure the perfect does not become the enemy of the good?
Tackling these issues head on brought a tone of frankness and ambition to the room that had a uniting effect, despite the differences raised. As the ReFi community continues to build, expand, and evolve, hosting more events centered around these difficult discussions and seeking alignment will become increasingly important.
2. We are taking notice of who is not in the room.
As many have echoed, climate change is a mass coordination problem and web3 is a mass coordination tool — but only to those who are aware of the problem and informed on how to use the tools. With this in mind, the Climate Collective’s ReFi Sense Making Workshops intentionally asked participants which populations were missing from the conversation. This question highlighted key absences from:
- Climate scientists and activists;
- BIPOC* populations and communities from the Global South;
- Women** and gender non-binary individuals;
- Carbon project developers and financiers;
- Corporate representatives;
- Regulators and policy makers; and
- Financial institutions and retailers.
With this first step towards enhanced awareness, the Climate Collective is now creating an engagement strategy to involve these groups in sector coordination efforts going forward. Continuously asking the question of who is and is not present, and committing to an inclusive approach, will help to ensure the ReFi community is cultivating shared value and building tools that create the conditions of prosperity for all.
3. Incumbents, institutions, and standard setting bodies present opportunities for collaboration.
A common theme echoed throughout the week was the need for enhanced quality standards in carbon credit issuance. Many are grateful to the likes of Verra and Gold Standard, who have served as the first registries to set this market in motion, and acknowledge that their foundational efforts have enabled the ReFi movement to progress this far. Based on current bottlenecks in credit verification, issuance, and liquidation, though, it is clear that the existing set of registries and quality guidelines are underprepared to serve the exponential carbon market growth that is anticipated in the coming years. While these may be barriers to success if they continue to go on unaddressed, at present they are prime opportunities to form partnerships with incumbent actors from carbon markets, as well as standards boards and public institutions.
The Sustainable Blockchain Summit made progress towards bridging these gaps by hosting speakers and attendees from outside of the web3 community, such as the United Nations Framework Convention on Climate Change (UNFCCC), the Rocky Mountain Institute, and Shell.
To these actors engaged in broader discussions of climate action beyond web3, one roundtable participant (who will remain anonymous in keeping with Chatham House rules) voiced the ultimate question underlying the gathering: “Right now we are at the kids’ table. How do we advance this talk to major world leaders?”
Follow the Climate Collective blog and look out for more posts this summer to learn how we are channeling these messages from conversation into action.
Resources
Couldn’t make it to Paris? Access all of the best ReFi recaps and recordings from the Celo Salon and Sustainable Blockchain Summit below.
Sustainable Blockchain Summit — Paris 2022
Celo Salon Recaps — Paris 2022
*Black, indigenous, and people of color
**Taking note of the lack of gender diversity during the morning session of the workshop, organizers were successful in inviting more women to participate in the afternoon session.
