Joe Biden's plan to tackle climate change has been described as the most ambitious of any mainstream US presidential candidate yet. We discuss how a change in US leadership could fire the starting pistol of a new "Earth Race" in green tech innovation, including Forest Tokenization.
The starting pistol of the next global race to win the coveted title of “world’s first country” could fire on 20 January when Joe Biden is expected to assume the role of President of the United States.
The next race in question being the “Earth Race”. And I’m excited, as healthy competition is what drives rapid innovation, and this is what we need if we’re to save the planet. Ideas, ambition, courage.
Yes, the space race of the 1960s might have had its roots imbedded in the Cold War between the US and the Soviet Union. But as they competed to show their superiority in space flight. They ignited a sonic boom in technological innovation that arguably sowed the seeds for rapid tech advances all over the world. A legacy which could be said to have birthed the digital age we live in today.
Throughout his presidential campaign, Mr Biden championed what the New York Times(November 8, 2020) called “the most ambitious climate platform of any presidential candidate in history, promising to spend $2 trillion over four years to draw down planet-warming fossil fuel emissions and convert much of the nation to clean energy.”
Mr Biden's proposed plan is welcome news to those of us who work in blockchain and ESG tech as it could see a renewed interest and investment in green tech innovation. It will also likely be very closely watched by other large countries who have already declared their own bold visions and begun to explore roadmaps on how to get there.
Whilst no-one has indicated it’s a competition in public. And global collaboration is definitely very important. Let’s be honest…every government would love to be able to say they are the first to find the winning solutions. They are the world leader. They are the winner of the climate or “Earth Race” and saviours of our planet. Global heroes. It’s a badge of honour. Of national pride.
Possibly sensing the next big global race is about to start, some economic giants have started to stretch and join the line-up.
As they say, what gets measured, gets done. The United Kingdom was the first major economy in the world to pass laws to bring all greenhouse gas emissions to net zero by 2050, back in June 2019. Swiftly followed by Canada with the re-election of Prime Minister Justin Trudeau in December 2019.
Uniting as a European bloc, including economic titans Germany and France, the European Commission in September 2020 presented its official plan to reduce European Union (EU)greenhouse gas emissions by at least 55% by 2030, compared to 1990 levels. Adding, how this level of ambition for the next decade will put the EU on a balanced pathway to reaching climate neutrality by 2050.
Next of the giants entering the race was China when (22 Sept) President Xi Jinping surprised the world by pledging China will reach carbon neutrality by 2060. Then Japan (26 Oct), the world’s third-largest economy, with Prime Minister Yoshihide Suga stating the country will become carbon neutral by 2050.
Now potentially poised to enter and completely change the climate race is the global behemoth that is the United States.
As the world’s largest economy and second largest emitter of greenhouse gases, the United States’ long-term climate plan is vital for the world’s efforts to rapidly cut emissions and avoid the catastrophic consequences of climate change.
Assuming there are no unexpected turns in the US electoral process between now and Mr Biden’s anticipated January inauguration, we can be confident to assume one of his first acts as President would be to recommit the United States to the global agreement on climate change.
The question I have is, which country, or countries, will be the first movers to make the boldest decisions and take real impactful action? After all, it’s going to take bold action to achieve such bold targets. And this bold action needs to be taken rather quickly if these countries stand any chance of delivering their promises.
2050 might sound a long way off, but global environmental policy formation and implementation takes a long time. It’s not something where you can flick the switch on and boom, every country, every business, every citizen changes. Although, there is an argument that if the world treated the climate crisis with the same vigour and intensity as the coronavirus crisis, then climate change could indeed be tackled quickly. But I’m not holding my breath.
Forests are an interesting data point to analyse if we try and predict who the winner, or winners, might be.
In their Global Forest Resources Assessment (FRA) for 2020, the Food and Agriculture Organization of the United Nations (FAO) reported forests cover 31% of total land area (4.06 billion hectares). Of this figure, more than half, 54%, are in just five countries – Russia, Brazil, Canada, the United States and China.
As a result, these five countries have an interesting competitive advantage over rivals in the “Earth Race” in that they have access to nature’s most powerful carbon neutraliser and lungs of the earth. Trees.
I’m particularly interested to see which countries, particularly these five, will be the first to truly understand and unlock the powerful potential of blockchain in forestry to tackle the climate emergency. Whether that be carbon credits, forest management or, the really innovative end of the blockchain forestry spectrum, tokenization.
Watching China over the last 12 months push forward with its ambitions to become the world leader in blockchain with the launch of its Blockchain Service Network (BSN), I wondered if China might be the first to leverage the tech to tokenize its trees.
To date, China hasn’t publicly shown signs of merging its blockchain leadership ambitions with environmental innovation. That being said, in light of President Jinping’s 2060 carbon neutrality announcement in September, this might be about to change.
Forest tokenization would help the Chinese combat the climate crisis through reducing China’s gigantic carbon emissions by providing a financial incentive to reduce deforestation and fund reforestation.
It could also create a covetable new revenue stream for the Chinese government which they could use to reinvest in further green and clean tech innovation. Providing “digital tree-powered” rocket fuel to propel the Chinese forward in both the global “Earth Race” and blockchain infrastructure race.
With President Trump being so anti-environment, it could be argued that the US effectively left the Earth Race in 2016 leaving an open playing field for China to try and win if they wanted to.
Yet that’s not really helpful as for the world to succeed in reversing the damage humanity has done to the planet, we need all countries to be involved.
Indeed, in October 2020, Michael Mann, one of the world’s most eminent climate experts, went so far as to say the earth’s future “is in the hands of American citizens”. With averting a climate catastrophe on a global scale “essentially impossible” if Donald Trump was re-elected.
As a Brit watching from London, I can only opine on the US from an international perspective. However, I do believe we need Americans to try and overcome their differences and unite as I view it as “game on” if they do. If anyone has the ambition, drive and intellectual smarts to potentially win the Earth Race and make this global competition really interesting, it’s the United States.
Not that it will be easy of course. Executive Orders can drive immediate action yes, but they don’t lend themselves to lasting legacy. An ambitious blueprint requires thoughtful policy change with support from Congress. Which may prove tough without a Democrat-controlled House or Senate to pass legislation. As former President Obama can attest.
Maybe the way a President-Elect Biden can bridge the political divide and win the hearts of Republicans could be to seed the concept of the “Earth Race”. To try and ignite the same passion of the space race. With saving the planet the United States’ next “man on the moon” moment.
The US could win if it really focused on winning. Focused on what unites Americans, rather than what divides them. It could possibly help the country heal too. And if competition hots up, it might attract the two largest forest owning countries in the world, Russia and Brazil, home of the Amazon rainforest, to join too.
Now, that’s when the race would get really interesting...
It would also achieve something which seems distinctly impossible in the current divisive world we appear to live in. In galvanizing global action and competition amongst sovereign states, it could help to unite the world in one common goal.
Saving the planet.
Meaning ultimately, whoever wins the Earth Race, we would all be winners. Why? Because the earth would be saved. And that is what is really important here. Saving our planet and humanity from extinction.
Tokenizing the world’s forests could unlock a potentially compelling new revenue stream. It could help to incentivize state governments to not use forest land for commercial use and gradually transition to a more sustainable “green growth” financing model which could be used to:
1. Fund economic growth and finance improvements to water, energy and food security, sustainable farming, education and job creation, helping to eradicate extreme poverty
2. Protect biodiversity and forest dwelling indigenous communities through ceasing deforestation and investing in the forests to encourage wildlife populations to thrive
3. Reverse climate change through forest preservation and reforestation. Reforestation can go a long way in offsetting the carbon and greenhouse gas emissions that human activity has pumped into the atmosphere.
Are you a forest owner? Contact email@example.com to speak to one of our analysts and discuss how tokenizing your forest portfolio could unlock new value.