4R Digital’s Innovative Carbon Value Exchange platform links micro-projects to carbon markets
Its an irony that the majority of people that live in the Global South who will be affected by climate change, are poorly placed to directly benefit from the rapidly growing climate finance markets. The costs of accrediting projects’ carbon credits mean that only larger renewable projects such as wind or solar farms, or businesses can afford to join schemes that allow them to trade carbon credits with buyers. In addition, a significant percentage of the value exchanged is taken by intermediaries in the carbon value chain.
As someone with a reasonable track record in applying technology for the purposes of positive disruption, I find the Voluntary Carbon markets ripe for some positive technological disruption to open access for smaller projects and participants. My work developing M-PESA showed that it was possible to leverage basic mobile phone technology to positively disrupt the means by which Kenyans stored and moved money. M-PESA provided an alternative to the physical storage and movement of cash. I strongly believe that it is now possible to bring positive technological disruption to the markets that facilitate carbon value exchange with individuals, communities, and micro-projects.
To this end, at 4R Digital we are working on a Carbon Value Exchange (CaVEx) platform uses readily available technology to collect and verify carbon displacement and sequestration data. These data can come from many point sources, and will be aggregated into units for sale through the Voluntary Carbon markets. I firmly believe that it will be possible to include many hundreds, or thousands of micro-small projects that are displacing the use of fossil fuels and other carbon emissions, and sequestering carbon but individually in comparatively small amounts. Examples of small projects we are working with in Africa include electric motorbikes, solar water pumps, and community based reforestation.
Importantly, the CaVEx platform leverages national digital financial services schemes such as M-PESA in Kenya. This means that carbon credit payments can be directed to the mobile wallets of the individuals, communities or micro-projects that generate the data, and who are most in need of the financing.
An additional win-win benefit to the CaVEx platform is that the projects that displace or sequester carbon, provide productive uses in their own right that enable the project participants to generate incomes, and mitigate against the effects of climate change. For example, enabling smallholder farmers to in Kenya move to solar water pumping allows them to access ground water for irrigation, whilst removing their expenditure on and use of diesel fuel.
We recognise that there is a significant imbalance between the demand for, and supply of reliably verified carbon credits (particularly those originating in the Global South). This does, however, provide a significant opportunity for positive technological disruption, and we welcome your thoughts and discussion on this opportunity.