The missing piece of the puzzle when it comes to carbon mitigation that is aimed at environmental sustainability is the supply of natural assets.
It is all good for corporations to reach agreements with intergovernmental panels and policymakers to achieve environmental carbon targets, and it is all good for them to invest in more climate-friendly energy sources and achieve fuel reductions. In fact, these efforts have been going on for some time, and there certainly is enough sustained pressure on states and corporations to do the right thing. But on the other side of the equation, if we are going to make any meaningful and lasting positive changes to our environment we have to mobilize the natural resources providers and incentivize them to make continual and lasting improvements to the environment.
This can be quite challenging to natural asset custodians as they are often dependant on utilizing and depleting natural assets such as forests, waterways, fisheries and other raw materials for their livelihoods. In order to be able to get people to completely change their lifestyles, to adjust their livelihoods, let alone that of whole communities, you have to be able to offer them some faith in the changes they need to embark on.
Any projects and initiatives that are focused on preserving and building a sustainable environment need to provide natural asset custodians with alternative funding models and education that will not only help them survive — but will help them to thrive.
To date, the results of such projects have been discouraging. Very little of the funds provided by corporations and donors from the general populous make their way directly to the custodians. The funds often get diluted along the way by middlemen and foreign exchange brokers.
Empowering Natural Asset Custodians
We believe that the Natural Asset Exchange is just the tool needed for these initiatives to deliver funds directly to sustainability projects and natural asset custodians. When these projects and initiatives receive the right funding, they can empower and mobilize the custodial communities through education and make them aware of livelihood alternatives that preserve and sustain the environment.
More specifically, these communities can be taught how to interact with the NAE directly via low cost devices loaded with the NAE client software. Armed with this know-how, they will be able to transact with the exchange directly. In time and with the right educational efforts, they will be able to directly load their natural assets onto the exchange — without using middlemen.
Instead of being offered a price by a broker, they can follow price movements in real time on the exchange and set their own pricing in accordance with market forces of supply and demand.
Natural asset providers will be able to load their assets directly onto the platform free of charge, set a price and begin selling.
Incentivising New Market Entrants
With the ability to trade directly, and armed with price discovery tools and mechanisms, new entrants will also be encouraged into the market. They will be better able to calculate potential returns on natural asset investments and turn away from unsustainable environmental activities.
In time, more communities will want to replicate the success of the initial natural asset providers — good news spreads fast in efficient markets.
The platform will also be able to accommodate new types of natural assets, ones that are yet to be discovered, yet to be invented, or that are currently not economically viable.
We see a future where the Natural Asset Exchange will be a powerful tool in democratizing the supply of natural assets, a tool that can finally remove the many barriers to market entry for natural asset providers.
As more natural assets come online through the exchange, and as trade volumes increase, the positive environmental impact that results from the trade in natural assets can only grow.