How to save the planet and make climate change “just go away” using blockchain and cryptocurrency

Paul Gambill
Feb 27, 2020 · 18 min read


  • Fixing climate change requires pulling CO2 out of the atmosphere. There are many methods to do this already, but none at any scale.
  • People need financial incentives to invest in R&D and create new carbon removal businesses. A marketplace for carbon removal is necessary.
  • First-generation carbon markets were a good idea, but fundamentally flawed. They are rife with corruption and fraud because the CO2 certificates trade hands many times and because an unknowable number of transactions happen off-book.
  • The solution is two-fold: 1) put all records of transactions on a public ledger, and 2) separate the trading, so that carbon is “retired” immediately, and a token representing 1 future tonne of CO2 removed is traded as a commodity.
  • Nori is building such a market, and is doing the work to abstract away the complexity of blockchain and cryptocurrency. Users won’t have to deal with blockchain and crypto if they don’t want to. But there are advantages if they do.


My name is Paul Gambill, and I’m the CEO and co-founder of Nori. This article is an overview piece describing Nori’s plan for how to reverse climate change. We’re not interested in making the effects of climate change less bad — we want to make the whole problem go away so that we never face this threat again.

The Nori marketplace is a voluntary, two-sided marketplace that connects suppliers — who verifiably remove CO2 from the atmosphere — with buyers — who for various reasons want/have to pay to negate or remove their emissions. The company was founded in 2017, and our mission is to reverse climate change by drawing down enough CO2 to restore the atmospheric carbon balance back to 300ppm. This is the greatest challenge of our time, and Nori is laser-focused on creating an entirely new carbon removal industry.


First-generation carbon markets have been around for over two decades. And you’re probably familiar with the concept of carbon offsets. Nori is not the same thing. We are the second-generation (or The Next Generation, if you prefer) that is building on the shoulders of giants to move the world into the carbon removal era.

Climate change is fundamentally a problem of too many greenhouse gases (GHGs) floating around in the atmosphere. We are not your typical environmentalists. We fully acknowledge the amazing benefits that increased energy usage by burning fossil fuels has produced for our civilization. The consequences, however, are that we have a carbon balancing problem. Carbon dioxide is not evil or immoral. It’s just in the wrong location.

For too long, policymakers and the general public have assumed we could simply reduce our way out of this problem. The perception has been that if we could just decarbonize (i.e. convert to renewables, reduce land use emissions, etc.) then we could all go home and be done with the problem. But unfortunately that is an incorrect understanding. CO2 and other GHGs tend to linger in the upper atmosphere for many years. We’ve already locked in significant warming from emissions that happened in the past. It is too late to just reduce our way out of this, and we must begin removing past emissions. Put more simply, we need to emit less, and remove the rest.

How much do we need to remove? First we need to get the 50 billion tonnes (that’s metric tons for US readers) of net increase every year down to net zero. Then we need to remove somewhere on the order of 1.5 trillion tonnes that are already floating around.

There are many industries for which it will be impossible to fully decarbonize. We’re not going to be flying in electric jets any time soon. For those cases in which we absolutely must continue emitting CO2, we need to apply carbon removal so that the effect is for every tonne emitted, one is removed.

And then we must pay down the carbon debt of 1.5 trillion tonnes.

The good news is there are already many different ways to remove CO2 from the atmosphere. The bad news is that they are not happening at large scale. Two excellent overview articles on this are from Heidi Lim at Opus 12, and from Ryan Orbuch at Stripe. If you want to dig into the different processes and technologies behind carbon removal, I would start there.

How Nori works

If we want people to take CO2 out of the air, then we need to pay them to do so. All people, no matter the culture, tend to be similar in that they respond to incentives. Shaming people or threatening them produces a fear response that should be avoided. More carrot, less stick is the way to solve climate change the fastest.

Note that Nori is not in the carbon offset business. We are in the carbon removal business. For the most part, carbon offsets are about avoiding future emissions and carbon removals are about removing past emissions that are already up in the air. There are plenty of efforts underway in other industries to avoid future emissions. Nori is tackling the problem of what to do with the excess CO2 the world has already emitted.

Nori is fundamentally agnostic to the different methods of carbon removal. Market forces should determine which are the best and most efficient ways to remove CO2. It also does not matter where the CO2 comes out of the atmosphere, as long is it comes out in a net negative way and remains verifiably sequestered.

But we have to start somewhere, and the first carbon removal methodology is by sequestering carbon in croplands. You can read our (very technical) Croplands Methodology document if you want more info on how we do measurement and verification. And if you’re a farmer who wants to sequester carbon and get paid for it, you can learn more at our For Growers page.

Here’s how it works:

  1. First, farmers adopt the practices that pull CO2 out of the air. This includes no-till agriculture, planting cover crops, and implementing useful crop rotations. We measure outcomes, and we don’t mandate practices. Which practices are adopted is up to the farmer.
  2. Then farmers provide operating data to us. This includes things like where the fields are located, what crop was grown, what type of fertilizer was applied, and so on. This data has to be verified by an independent third-party who is checking that the land practices the farmer claims happened actually occurred. On-site visits are not typically required, as the verifier can do things remotely like check ownership title records, seed and fertilizer purchase receipts, and even crop verification with satellite imagery. Our estimate for a typical verification cost is $3,000 to $5,000 per project, but that can change based on size of farm and complexity of their records. (For comparison, a typical carbon offset project could cost $10,000 to $50,000 for this verification.)
  3. Once the data is verified, we run it through our partners at Soil Metrics, which is a company that licenses the open-source and peer-reviewed COMET-Farm platform out of Colorado State University. This is the tool the US Department of Agriculture (USDA) funds to determine soil organic carbon content, and is pretty much the best tool out there for the job.
  4. We issue certificates to the farmer in the amount of CO2 they sequestered. These certificates are called Nori Carbon Removal Tonnes (NRTs) and are the unique asset that suppliers in our market sell to buyers.
  5. Farmers then sell the NRTs to buyers. In most cases, buyers pay cash at a market rate that changes daily based on market supply and demand. Farmers receive a NORI token, which they can then sell for cash. [Note that our NORI token has not yet launched, but you can track updates on that here.]

Nori does not directly charge the farmers anything in order to sell carbon in our market. The verification cost is borne by the farmer. Nori’s revenue comes from a transaction fee that is paid by the buyers.

If you’re at all familiar with carbon markets, you might be wondering at this point why we have chosen to use blockchain and cryptocurrency as the backend for this. Steve Jobs once said, “Creativity is just connecting things. When you ask creative people how they did something, they feel a little guilty because they didn’t really do it, they just saw something. It seemed obvious to them after a while.” We’re using blockchain and cryptocurrency as a tool to solve the problems that have plagued first-generation carbon markets. The solution we have designed was never possible before recently, and this is going to completely change the way the world deals with carbon emissions.

Problems in carbon markets today

International double-counting

Back in 1997, when the Kyoto Protocol was adopted, only developed countries were required to reduce their emissions to certain targets. Developing countries were not beholden to the same goals. Countries like Brazil were fine with this, because it meant that there was a large opportunity to sell forestry carbon credits to developed countries who were trying to meet their goals.

But that changed in 2015 when the Paris Climate Accords were adopted. Now, every country has emissions reductions targets to achieve. This is spelled out in Article 6 of the agreement, if you want to read further. A great overview piece about this problem is found here.

In practice, what happens today is that if, say, a forestry project occurs in Brazil, and that project developer sells those carbon credits to a buyer in France, then both Brazil and France will count that as an emissions reduction.

But wait, isn’t that double-counting the same tonne of CO2? Yes, and that is the problem that the policymakers set out to solve at the COP25 climate conference in December 2019. Unfortunately, they did not reach any new conclusions, and we are still living in a world where literally every single carbon credit that has been sold internationally has been double-counted.

Voluntary double-counting

But wait, it gets worse. Let’s ignore international carbon accounting for a moment, and focus just on voluntary carbon trading. That also developed as a result of the creation of the Clean Development Mechanism by the UN during the Kyoto talks. Here’s how that works today:

  1. A project developer does some sort of carbon offset project that adheres to a protocol standard developed by one of the existing carbon registries.
  2. The registry issues carbon credits to the project developer.
  3. The developer typically sells those credits to a broker.
  4. Then the broker resells them, often to another broker.
  5. The carbon credits trade hands many times over.
  6. Some of the time — but unfortunately not very often — the credits are purchased by an end-user who chooses to “retire them”.

Retiring a carbon credit means that it is pulled out of circulation and no longer available for sale. In many cases, carbon credits that are purchased are never even retired, but instead held as an asset by the most recent owner.

The problem with selling carbon credits over and over again is that it’s the same tonne of CO2 being traded every time! So when you see market analyst reports like Forest Trends saying there are 98 million tonnes of carbon trading volume ($295 million), that’s not the amount of carbon being offset, that’s the amount of trades that are happening. The amount of actual carbon is far, far less.

When I first started researching this space in 2015, I could not believe this was how the system worked. Who would design it that way? It’s absurd.

But then I started investigating more into how these commodities markets work, and I began to understand why the market designers made the choices they did.

Their goal was to create a liquid commodities market. Commodities markets underpin every commodity asset in our economy. Think of things like oil, wheat, rice, corn, you name it. These markets enable what is known as “price discovery.” Consider it this way: when was the last time you bought or sold something on Craigslist or eBay? How did you know what a “fair price” was for that thing? You figured it out by looking at what other people are willing to pay for the same thing. So if you see a used iPhone on Craigslist for $800, but all the other listings are for $400, then you know the $800 price is probably too high and you shouldn’t pay it.

Commodities markets do the same thing but for the macroeconomy. Commodities markets are like looking at Craigslist but with so many data points that we can be really, really confident that we know what the market is actually willing to pay for a commodity.

The more confident we are in the fact that the price is “fair” as determined by the overall market, the more investments businesses make in using that commodity. This is what makes our global economy function, and how we’re able to produce such wondrous goods and live such luxurious lives compared to our great-grandparents.

So it’s very reasonable that early carbon market designers wanted to create a carbon offset commodities market. If we knew better what the “carbon price” was, then there would be more money flowing into carbon offset projects, which avoids more carbon emissions.

But the problem is that if you just trade the same tonne of CO2 over and over again, then you’re not actually avoiding more carbon emissions. You’re just pushing pieces of paper.

This opens up the carbon markets to large-scale fraud and manipulation. If you’re a large oil and gas company who wants some goodwill, just buy carbon credits from a broker, but don’t retire them. Keep them on your balance sheet, and low-information consumers and voters will never really understand that you can and will re-sell those carbon credits.

It also enables off-book transactions that make it seem like there’s more market volume than there actually is. Economically related parties can collude quite easily. Say you have 1 million carbon credits and you sell them to an affiliate company for $1 each. Then both you and the affiliate company “mark it to market” meaning you say that you sold for the market price of $15, so you can pad your balance sheet. That is straight up fraud, and it happens more often than you think with carbon trading. There was a very high profile carbon trading tax fraud case in the EU that was dubbed the “fraud of the century.”

And there’s another, even more consequential problem. When brokers buy and resell the carbon credits, they’re only doing so because they believe they can buy low and sell high. So there’s a markup at each step along the way. This means that project developers typically only receive between 10–30% of the final price paid for the offset. These middlemen create frictions that make it harder for more people to develop new offset projects.

How to solve these double counting and liquidity problems

You might have already guessed the solution to the problem by this point: we should retire the carbon immediately after it is sold to the first buyer. And it should be retired in a specific location as specified by the buyer.

Immediate retirement cuts out the middlemen, meaning that the buyers who pay for the carbon are delivering more overall cash to the supplier. In the Nori market, suppliers receive about 90% of the total price paid by the buyer, compared to 10–30% in other markets.

Retirement also solves the international double counting problem in an elegant way. When a buyer purchases NRTs in the Nori market, they have to specify in which country the NRTs are being retired.

This is where blockchain comes into the picture. A blockchain is simply a transparent and public database, otherwise known as a “distributed ledger.” Through some complicated math that I won’t go into, you can be absolutely confident that the information you see on a large public blockchain like Ethereum or Bitcoin has not been tampered with by anyone after it was recorded. (Nori is built as an application on the Ethereum blockchain.) The challenge then is ensuring that the data stored on there is accurate. We go over how we do that in our Croplands Methodology.

What that means for international carbon accounting is that when someone sells an NRT across borders using Nori, it is dead simple to facilitate the reporting so that the NRT is only counted once. And that information is open source so that anyone in the world can forever check to see that the countries who report the carbon reductions are telling the truth.

And what it means for voluntary trading is that there’s no more potential for carbon fraud. Because we are using blockchain, we can enforce in software that buyers can never re-sell the NRTs. The NRTs belong to their account forever.

Most importantly, it means that every NRT sale means that another incremental tonne of CO2 has been removed from the atmosphere. No more pushing pieces of paper around. The Nori market design means real progress being made on paying down our carbon debt.

To summarize, immediate retirement means:

  • More cash in the pockets of the people who sequester the CO2.
  • No more fraud.
  • No more double counting of internationally traded carbon credits.
  • Every tonne sold is a net new tonne coming out of the atmosphere.

But why tokens?

Some people at this point say, ok but why are you using the tokens? Why not just have the buyers pay in cash?

The answer goes back to the price discovery and commodities markets discussion above. If we force immediate retirement, then there is no carbon trading. If there’s no carbon trading, then there’s no commodity market for CO2, and there’s no way to really know the true global market price for carbon. We’re back to buying something on Craigslist and not knowing if we’re getting a good deal or not.

We need to have a tradable commodity asset, but if we’re requiring immediate retirement, then that asset can’t be the carbon itself. This is the role the NORI token plays.

I will first caveat here and say that we are designing the Nori platform so that most people never have to interact with tokens if they don’t want to. We fully admit that cryptocurrency can be complicated, and our goal is to simplify this overall process, not make it more complex than it needs to be. But advanced-level market participants will be interested to learn how to use the NORI token to their own advantage.

Nori is creating and issuing a total of 500 million NORI tokens. Each token’s price in US dollars or any other currency will fluctuate based on how it is traded in cryptocurrency exchange markets. This is exactly how any other currency works today. There are foreign exchange markets where dollars are traded for euros and yuan and pounds, and so on. NORI will be traded for dollars, euros, etc., as well as for bitcoin, ether, and other cryptocurrencies. The more it is traded, the better, because that means more accurate price discovery.

In our design, each NORI token is worth one NRT, or one tonne of CO2. If you own a NORI token, you haven’t paid for carbon yet. Think of it like holding a gift card for a tonne of carbon. When you pay the supplier for that NRT, the supplier then sells the NORI token back into the exchange market, and the NORI token re-enters circulation where it can be used again by a different buyer. You have to buy the NRT to be able to claim that you’ve paid for the carbon.

Savvy buyers can use the NORI token as a way to hedge against future price increases. If you’re a business that wants to remove 100,000 tonnes of CO2 every year, you could buy 300,000 NORI tokens at the current market price, and use them over the next three years. That way you lock in the price you paid in dollars, and don’t care if the carbon price increases.

Savvy suppliers can use the NORI token to balance out their cash flow vs. profit needs. If you need the cash right away, sell the tokens after you receive them. If you think the carbon price will be higher in the future, then hold on to your tokens, and sell them later when you need the cash flow.

This also means novel financing methods are possible. Farmers sometimes need financing to begin the switch to carbon-sequestering practices in order to pay for new equipment or cover crop seeds. Banks and investors could say to the farmer, “We’ll pay you $X per NRT you sell, and we’ll take the tokens. Whatever profit we make on the tokens is our return on investment.”

Tokens as insurance

The token is also how Nori solves the “permanence” problem. With carbon removal, the question is always, “How do I know the carbon is actually going to stay out of the atmosphere?” In other words, how do you know you’re getting what you paid for?

This is a tricky problem for some methods of carbon removal, and most especially for soil carbon. A farmer could adopt practices that sequester carbon, and then a few years later plow the land and release that carbon right back into the air. Or they could sell the land and the new landowner might convert the land to some other land use.

This is less of a problem for carbon removal methods like direct air capture and geologic sequestration. Pulling CO2 directly out of the air with industrial machinery and then injecting into underground rock formations can store the carbon for many thousands of years. This is clearly a more permanent solution than soil carbon. But it’s also incredibly expensive. Direct air capture to mineralization costs around $1,000 per tonne today.

Soil carbon is on the order of a few dollars to $10 per tonne stored. So there is a clear advantage to beginning our carbon removal market with soil carbon. Since it’s a lot cheaper to do, there’s going to be a lot more supply of it available.

When a farmer signs up in the Nori market, they sign a contract that says they will maintain the practices that keep the carbon in the ground for at least 10 years. They have to keep providing operating data to us every year, and that data must be re-verified at least every three years. When you maintain the practices that keep the carbon in the ground, you’re also continuing to sequester more carbon. At each verification period, the farmers can generate even more NRTs that come with a new 10 year commitment. So what was a 10 year permanence becomes 13 years, then 16 years, and so on.

Let’s say a farmer sells 100 NRTs, and they receive 100 NORI tokens. Some of those tokens will be immediately “unrestricted,” which means they could sell them right away for cash if they like. The remainder will be restricted and vest over the course of the 10 year contract term. If the farmer does something that releases the carbon back in the air, or we find that we overissued the NRTs, then we will claw back those restricted tokens and use them to buy new NRTs on behalf of the original buyer from some other supplier. The vesting schedule ensures that the farmers will keep their commitments to permanence.

What this all means is that we are able to not only ensure ongoing permanence, but we can offer a warranty on the buyer’s complete purchase. First-gen carbon markets try to solve this by using a buffer pool. But investigations have shown that this buffer pool is often full of credits of very dubious value. Nori’s guarantee ensures that we are constantly re-checking the credibility of the carbon removal claims and can truly ensure the buyer gets what they paid for. Think about how this Nori guarantee will positively impact buyer decision making. This is huge!

If we were using cash instead of tokens, this insurance could prove to be very expensive for Nori. Say the buyer originally paid the farmer $10 in cash for every NRT. And then five years later, the carbon is released, and Nori has to buy new NRTs for that buyer. If the carbon price has increased to, say, $20, then the cash Nori claws back from the supplier would only buy half the amount of necessary NRTs. But since the token is always worth one tonne, Nori itself is also insulated against future price increases. This is a good thing because we want the carbon price to increase. An increase in price means there’s more incentive for suppliers to enter the market.

Market participants don’t have to worry about tokens if they don’t want to

We readily admit that cryptocurrency is still a very complex thing, and many people have very justifiable concerns about having to use it. It’s clunky, and if you don’t know what you’re doing, it can be overwhelming.

The good news is that if you don’t want to deal with all this token stuff, you don’t have to worry about it.

For buyers, you can simply pay cash, and the cash will get converted to a token in the background that is then delivered to the suppliers.

The checkout page on for buyers.

For suppliers, we will have a simple button you can click that will convert your tokens into cash at the current market rate and deposit them to your bank account. The infrastructure for doing all this conversion already exists today, and we intend to implement this in our platform in the near future.

This is a mock design that will be implemented in the coming months.

The best blockchain use case you’ll find for solving climate change

I first started shopping this concept around with folks in the beginning of 2017, and the response I consistently hear from people is that this is the best application of blockchain for solving climate change they’ve ever heard. It aligns the incentives in the right way that two-sided marketplaces don’t typically have. Take Uber for example. Uber’s business model is only successful when the amount that gets paid to their suppliers decreases towards $0. Nori’s model only succeeds when our suppliers get paid more.

We believe this market design gives the world the best chance of succeeding in creating the financial incentives we need in order to drive massive carbon removal from the atmosphere.

A bit about Nori

Nori launched in 2017, and spent the first year and a half of our existence in developing the first iteration of our croplands methodology. We went through the Techstars Sustainability program in the fall of 2019, and we launched with our first proof of concept soil carbon project selling NRTs in October 2019. Since then we have announced several important channel partnerships, and are currently working on scaling up our market. This GreenBiz article captures the state of the carbon removal industry as of February 2020.

We have lots of other content about Nori and carbon removal on our website. We host two popular podcasts called Reversing Climate Change, and Carbon Removal Newsroom, and we try to be as transparent as possible by providing extensive documentation on our Resources page. Our kitchen sink document that describes much of this content in greater detail can be found by reading the Nori White Paper.


Nori is on mission to reverse climate change.