2023 is nearing its end, and by now, the idea of Web3 has slowly transformed from expensive monkey memes to legitimate community-driven technology. We have NFTs for real estate investments, meet-and-greet tickets, and pageant voting. But how many are using this technology to fight climate change?

Our planet is facing a climate crisis, a biodiversity crisis and an energy crisis. With a massive environmental threat looming ahead, experts say the only real solution is a paradigm shift.

From unsustainable plundering of natural resources to a "regenerate and rehabilitate" mindset. From maximizing profit to making sure that something will be left over for the future. From take-take-take to give and take. Because we all live on the same planet, and as the saying goes, whatever damage you do will ultimately come back to bite you.

How does Web3 fit into this? Let's take a look.

A Different Take on Doing Business

In the traditional economic model, the goal is to maximize profits and efficiency. Environmental effects and social impact are never the priority, and down the line, this can have disastrous effects. Think of the economy as a circular loop. Everything is part of the greater picture, and everything you do has an effect on something else in the ecosystem. If you catch all the fish in the sea, there won't be any left to reproduce. Before long, the supply of food goes down, the demand goes up, and people go hungry.

A new paradigm known as Regenerative Economics takes a hard U-turn and aims for long-term sustainability. It values transparency and credibility, efficiency over wastage, thinking long-term, and saying no to short-term profits which cause irreversible damage in the long run.

It's the answer to the question, "How do you care for the planet while still making a decent profit?"

You may have already heard the term Regenerative Agriculture, a form of sustainable agriculture that blends science and technology with organic farming. In this system, you don't just pump in loads of chemicals to make plants mature faster and free of pests. While the chemical-heavy style of farming works well for the first few years or so, eventually you'll end up with zero beneficial insects, too many chemicals in your produce, and soil so dead you'd need tons of fertilizers to make anything grow.

In contrast, regenerative agriculture prioritizes soil nutrition, biodiversity, and conservation of resources. The goal is not to achieve record-breaking harvests that leave the earth depleted of its nutrients, but to create a healthy environment where you can keep producing good food in the years to come.

Now, what about the finance part?

Enter ReFi, or Regenerative Finance.

ReFi: Finance with a Cause

Regenerative Finance, or ReFi, is where Decentralized Finance (DeFi) meets environmental and social issues and tries to create a positive economic impact for all. It's an emerging field that leverages blockchain technology to "rehabilitate" damaged ecosystems and restore long-term productivity‚ something we direly lack in a world that keeps demanding bigger, faster, and more.

Here are some of ReFi's benefits:

1. It makes impact investment‚ investing in companies that claim to follow environmental, social, and governance standards (ESG) ‚ more accessible and transparent. Through decentralized technology, the average Web3 user can buy NFTs to invest in sustainable brands and help solve the climate crisis.
2. It facilitates crowdfunding for environmental and social projects. Planting a tree is rewarding enough on its own, but what if you could get extra perks like shopping discounts or higher credit scores for every seedling you care for?
3. It makes the voluntary carbon market more credible. (More on this later.)
4. It helps solve the greenwashing problem by making product and industry data accessible to the public through blockchain records. (Greenwashing is when companies claim to be eco-friendly in their marketing and PR campaigns, when in fact they're doing the opposite.) Think of the last time you bought an "organic" product. Were you offered any evidence that the product was naturally-made, or did you simply trust what was written on the label?

One of the biggest issues with the green movement is the lack of transparency and regulation in the space. As consumers, we'd rather buy from companies that call themselves eco-friendly, but what concrete proof do we have that they're living up to their promises? Short of inspecting their operations in person, how can you tell that the materials used are chemical-free and sourced using methods that don't harm local communities or pollute the environment?

Here's where the blockchain comes in. Through this technology, you can simplify record-keeping of costs, materials, location, transportation, and other important information. You can set up smart contracts to automate data gathering, fund disbursement, and order fulfillment. Instead of wild estimates, you get more reliable data at every stage of the supply chain. 

ReFi and the Voluntary Carbon Market

One aspect of ReFi that's gaining traction these days is the voluntary carbon market. Here's how it works:

Say a company installs a solar farm and plants trees. Instead of relying on fossil fuels for energy, they harness the power of the sun to reduce their greenhouse gas emissions. By planting trees, they help remove air pollution. For every ton of carbon dioxide they either filter from the air or avoid emitting in the first place, they get one "carbon credit." They can sell these carbon credits to companies that emit a lot of greenhouse gases. These heavy emitters then get the right to produce those extra tons of carbon dioxide and still claim that their operations are eco-friendly.

Ideally, the voluntary carbon market is the perfect incentive to make the shift toward renewables.

But what if a company puts carbon credits up for sale without legitimately doing anything to reduce greenhouse gas emissions? What if they claim they're producing energy from a wind farm that isn't actually operational? What if they sell the exact same carbon credit to three different companies? What if they exploit other loopholes in the system?

And this is where blockchain technology really shines. It can bring security and trust in a situation where two parties barely know each other. If a company is making false claims, records can be traced through the public ledger. This way, corporations can be held to higher standards of integrity and transparency.

So far, we still lack most of the infrastructure and systems to make this happen on a wider scale. But Web3 startups harnessing the power of community and technology for fundraising, investing, supply chain management, documenting, project monitoring, and raising awareness are a good place to start.

Unless we're okay with more islands turning into Atlantis 2.0, we all need to take whatever action we can to salvage what's left of our planet.

Let's just make sure this action is actually taking us somewhere.