All About Blockchain

How Blockchain Will Save The Climate | Ando Shah

August 22, 2023 The UBRI Podcast from Ripple Season 6 Episode 2
How Blockchain Will Save The Climate | Ando Shah
All About Blockchain
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All About Blockchain
How Blockchain Will Save The Climate | Ando Shah
Aug 22, 2023 Season 6 Episode 2
The UBRI Podcast from Ripple

Are you following the most critical, vital, existential fight of our planet?

The potential application of blockchain to decarbonize our economy and our world so that we can avoid catastrophic temperature rise is happening. Discover along with others in our field how blockchain, may actually be a suitable technology.

A compelling conversation between Ripple’s Carbon Market Product Manager, Peter Rosberg and Berkeley PhD candidate, Ando Shah. Audience will learn how we are enabling blockchain for the carbon credit use case; modernizing carbon markets, accelerating high quality carbon removal and contributing to global climate goals.

For every dollar of economic value we create, we destroy one dollar of nature value -> This is a rich discussion on how companies are responsible for more than just profits and growth and how they can make a positive impact on the environment and society to give back.

Show Notes Transcript

Are you following the most critical, vital, existential fight of our planet?

The potential application of blockchain to decarbonize our economy and our world so that we can avoid catastrophic temperature rise is happening. Discover along with others in our field how blockchain, may actually be a suitable technology.

A compelling conversation between Ripple’s Carbon Market Product Manager, Peter Rosberg and Berkeley PhD candidate, Ando Shah. Audience will learn how we are enabling blockchain for the carbon credit use case; modernizing carbon markets, accelerating high quality carbon removal and contributing to global climate goals.

For every dollar of economic value we create, we destroy one dollar of nature value -> This is a rich discussion on how companies are responsible for more than just profits and growth and how they can make a positive impact on the environment and society to give back.

Lauren Weymouth: (00:07)
Hi, I'm Lauren Weymouth, leading the University Blockchain Research Initiative, UBRI, for Ripple, and your host of All About Blockchain. We continue to bring you blockchain use cases that solve problems to make a difference in our lives across various sectors. Uncovering what is possible with this tech and where it's gonna take us in the next three to five years. We do this by interviewing academic and entrepreneurial partners who are building meaningful projects on chain. Now, as this summer is entirely too hot everywhere, it's time to dive further into sustainability. We're excited to discuss carbon markets and ways to address climate change. I've asked my friend and colleague Peter Rosberg in San Francisco to lead this discussion, and you'll hear why.

Peter's been in Silicon Valley's startup scene for over 30 years, working for companies in crypto, lending, fintech, and e-commerce. Now with Ripple Engineering, he's building products with partners to mitigate climate change, encourage ecological and technical project development, and support the United Nations' sustainability goals. Peter will be interviewing our guest, Ando Shah, PhD candidate in the information science department at UC Berkeley. Peter, let's jump in.

Peter Rosberg (

Thank you, Lauren. Today, we're live at Ripple headquarters in Downtown San Francisco with Ando Shah, an experience designer, systems engineer, and virtual reality pioneer. Ando focuses on financing biodiversity and climate positive interventions. He's currently working on a project, Decentralized Framework for Accurate and Consistent Carbon Pricing. Ando, welcome to All About Blockchain.

Ando Shah (01:29):
Thanks, Peter. It's a pleasure to be here.

Peter Rosberg (01:31):
Thanks for coming into our offices today. Are you based in Berkeley?

Ando Shah (
I am, yes.

Peter Rosberg (
What drew you to information science and working with Professor John Chuang?

Ando Shah (01:40):
I've been in the industry for about 15 years before I went back to grad school. And I was at a place in life where my previous baby, the company that I started, was doing well. And sort of my mission in life had deviated a little bit from the trajectory of the company, and I wanted to go back and explore the things that were really important to me. And I felt like doing a PhD, where you get the sort of space and the time to think deeply and develop things at depth that can have potential impact was quite high. And the School of Information at Berkeley is a, kind of a weird, wacky place because we study anything that has to do with information, which in today's world is, you know, everything. it allowed me that sort of,  the horizon to explore and be able to  you know apply technology to social environmental good, but also look at the harms of technology and where we can, uh, find a good balance between all of these systems that interact.

Peter Rosberg (02:36):
Before we talk about your project, could you give our listeners a high level description of how the Voluntary Ecological Markets work?

Ando Shah (02:43):
you could make an argument that the, the voluntary carbon markets are actually part of the Voluntary Ecological Markets als- although the, the ecological aspect of it is much more wide ranging. Um, carbon is addressing a very, very specific need, which is the,  need to remove carbon from the atmosphere, right, which is very, very directly related to the carbon crisis, the, the climate crisis essentially.

But there are many aspects of the climate crisis that carbon does not address. Um, there is sort of a triple threat, right now to,  to ecosystems, to the climate, as well as to societies around the world. Um, and just applying the lens of carbon is reductive and is not going to get us all the way there. So, we have to look at it in terms of how we can protect and restore ecosystems, which is keeping the balance, um, on the planet in a healthy way.
 if you look at the numbers i- in what is required to protect and restore ecosystems and what funding is being allocated to them, there's close to a trillion-dollar gap on a yearly basis on what's needed. So there is a sore need for funding for ecosystems to, to be protected and preserved. And so the, um, the voluntary ecological market is an attempt to do that, and is an attempt to extend the, the carbon crediting mechanism to also to biodiversity. And that's sort of the very high level view.
and as we get closer to the ground, what's happening now is that the, Kunming-Montreal Biodiversity Framework, which was arrived at, uh, last year which was agreed to by almost all countries in the world, they... we decided, together, um, to provide funding for the protection of ecosystems, so things like payment for ecosystem services, green bonds, biodiversity offsets and credits. And so that is now paving the way for an actual, uh, financial, ecological market to exist. And early work has started. There is a few companies that have started  producing these credits, but it's very, very tiny right now, and a small percentage of its potential.

Peter Rosberg (04:37):

Yeah. That's a great point. You know,  everybody, when you think about sustainability, thinks about the carbon markets, but there's so many other things that are, are going on and so many other things that need to be preserved, like biodiversity in the ocean.  the United Nations has a, a list of 17 sustainable development goals.  these are goals like no poverty, climate action, clean water, life on land. , how does  what you just described with the, uh, Voluntary Ecological Markets relate to these UN SDGs?

Ando Shah (

So, one way to look at how these markets are evolving is sort of an, an attempt to internalize all the externalities of the global capitalist system. And what I mean by externalities is sort of the, the negative outcomes that are not being priced for within the system.

So, when factories pollute or supply chains have leakages or what have you it's not just the addition of carbon dioxide to the atmosphere. It's also, um, degradation of natural ecosystems, pollution in the ocean, in rivers and so forth. And so now, the attempt is to kind of create this modular,  crediting systems, where carbon is sort of one of the blocks.

And then you can have other blocks that are responding to threats to biodiversity threats to social cohesion. Um, things like plastic pollution could be very specific sort of crediting mechanisms. So, somebody could get paid for cleaning up the plastic in certain areas. Um, these could also provide incentives for companies that are heavily reliant on plastic products and plastic outputs to switch to sustainable alternatives. So, this sort of stackability of this crediting system can allow... can enable some of the, the funding gaps to be filled that then go towards projects that can provide the incentives to cre- have this transition.

And how it relates to the SDGs is, you know, like you were mentioning, Peter, you know, the, SDG 3 is, like, good health and wellbeing, 6 is clean water and sanitation, 13 is climate action, life below water is 14, and so forth. And so all of these need to be addressed not just at a framework level where the UN says, "Hey, this stuff needs to happen," but also at an action level, which is already happening. Communities are rallying around these causes and, um, creating very impactful projects. But they also need the financing for us to backstop these and also to enable them to continue in a sustainable way into the future. So I think that's where the rubber meets the road.

Peter Rosberg (
Tell us about the, the current problem you're looking at and, how you're trying to solve it.

Ando Shah (
my personal sort of ethos is around working on problems relating to the global commons. So the global commons are essentially parts of the world which nobody really owns but has massive benefits and effects on the rest of the world. So an example of that would be the atmosphere. Nobody really owns the atmosphere, but we're all part of it. We breathe it. We also pollute it. And it is a shared responsibility.

The oceans, the rivers, our protected lands, these are all global commons. And there's a famous term that is called the tragedy of the commons, which is the idea that because we don't own the commons and there's no actual responsibility for them, we don't actually end up taking care of them.

And the global commons are extremely important in, you know, how we deal with living on this planet, going forward and how we've always taken care of it. And so some of the problems that I'm looking at is like, "Okay, how can we try to restore the balance to the global commons?" one of the projects is working around protecting large, oceanic areas, so marine protected areas.

One of the projects is working with the government of Costa Rica, which has established one of the world's largest marine protected areas.  this is in, in the order of hundreds of thousands of square kilometers of open ocean, uh, which is very hard to patrol, very hard to understand and study let alone protect. And it requires a lot of funding for a relatively small developing nation, um, to undertake. So we wanted to create a sort of framework, a, a first pass, if you will, at building a crediting mechanism that can help them finance the continued protection of the ocean.

Another project that I'm working on deals with illegal and unsustainable mining, um, across the world. There's a big one around, uh, sand mining.  sand is an essential ingredient in concrete and asphalt, ... especially in the Global South where infrastructure projects consume so much concrete. Um, and all the sand basically comes from beaches and rivers, which are the global commons.

And the beaches and rivers are being degraded at an incredible rate today, that has huge repercussions on society, both locally as well as the world globally. we are looking at ways of monitoring and creating policy around ameliorating some of these harms.

another one is looking at carbon pricing i- in the context of corporations. And carbon pricing is a very important mechanism in, um, the corporate net-zero movement. carbon pricing, simply put, is a way to internally price, uh, carbon dioxide as part of the operation of the organization. So just as how we would, uh, price goods and services, we also need to price carbon dioxide. So there is an internal incentive, to be able to reduce en- the carbon footprint of organizations.

Peter Rosberg (09
That's fascinating.  in terms of like, your monitoring and the tracking of prices how can blockchain play a role in that, what are your thoughts on how blockchain solves that problem, or does it?

Ando Shah (09
I think the jury is still out, part of the solutions that we envisioned were, um, to sort of  bring on these,  complicated carbon pricing models, what they call the integrated assessment models. And what they produce are the social cost of carbon. And the social cost of carbon is, simply put, a way to price the emission of one ton of carbon dioxide to society at large, meaning it has to take into account what that ton of carbon dioxide does in the atmosphere over the next few hundred years.
What does it do to ecosystems around the world? What does it do to livelihoods? What does it do to the ways in which we produce and consume value in the world, which is, as you can imagine, a very complex undertaking. And so a lot of research organizations is... also at UC Berkeley have produced some of the leading models for carbon pricing for social cost of carbon. . it's sort of the cutting-edge in the most equitable forms of carbon pricing.
traditionally, how carbon pricing is done is mostly market-based system. So, for example,  the European Emissions Trading System is semi-regulated by the European Union, and there are other... The voluntary carbon market is entirely market-based, so it's a supply-demand curve that's being solved, but it doesn't take into account what the true price of carbon is, right? So what are all the costs associated with the emission of carbon dioxide?
So the social cost of carbon does that. And our idea was that we need to start looking at the hard truths about carbon emissions. And one of the ways to do that would be to bring these models to organizations that actually need to start pricing carbon internally. These models, however, are very complex. They're very opaque. They're all open source. But, you know I would encourage, you know, our more technically minded listeners to try and run some of these.
But they, they require a lot of understanding of how these models work under the hood, to be able to parameterize them because there are, dozens of parameters that vastly modulate the outcome value. So these models exist, but they're not very well used outside of, say governments saying, "Oh, this is a price that we believe in," or the UN saying, "This is what the price should be." So they're not actually operationalized to a large extent.
We wanted to change that, try to operationalize these. And so we, we brought some of these models online, where, you know, gave them an interface. And so anybody can go in and play with the parameters. And the education on how to use the system  is built  into the user interface. So this is already live. and we can post links to that later. And we wanna take that a step further and, A, give these to organizations that could use them, and then also be able to track what they're doing with them, right?
we wanted to store not just the value that's being picked. Okay. So  the price of carbon that we pick will be $110. The model says so, but also the inputs to the model which represent the ethical framework that the organization has... is vested in. So for example, one of the most important parameters in the calculating the social cost of carbon is called the discount rate. And the discount rate within these models determines how much of the lifetime cost of the carbon that you're emitting is the emitter being versus society at large being in the future.
what that implies is that how much do we value future generations? How much do we value the human society and the ecology at large? if the organization takes 100% responsibility for all their emissions, then, it implies that perhaps, they have different ethics than somebody who doesn't.
So there are ethical parameters within these models.  we wanted to be able to track all of these and in a transparent way. So that's where a distributed ledger becomes really valuable to be able to track these over time across space, across organizations and see what different organizations are doing. Sorry. That's a very long-winded way (laughing) of answering your question.

Peter Rosberg (
There's lots to unpack there too, like just the concept of being able to take future generations into account and what's the discounted rate of a future person 50 years out versus 25 years out. And I'd love to just jump down that rabbit hole, but I, I think that's probably a different (laughing),  discussion. That's fascinating just taking all that into account, the price of the carbon and just how little of it is actually taken into account today and,  when you've got a $15 carbon credit when it's really $3,000 worth of societal damage.

How did you get into blockchain or what made you get interested in blockchain to begin with in terms of this project and-

Ando Shah (14:18):
I think my interest in blockchain is around very specific characteristics of the underlying technology, which is the decentralized aspect and the transparency aspect, and what they can enable. in general, I work with a bunch of buzzword technologies, blockchain, AI, et cetera, (laughs) et cetera, and not because they're the coolest things, although, you know, in, in all honesty, they do tend to attract funding.
they all provide something that's useful. So I, I try to distill them to their essence that can provide value to a project. And I try to use it for what that use is. So in this case using a distributed ledger, and actually allowing a smart contract to be able to interact with the system was what attracted me to this and the idea of sort of an algorithmic price setting mechanism we have all of these, net zero pledges and emissions reduction pledges.
And if you just look at the history, like, nobody's meeting their pledges. They're very, very far from it. so can we pressurize organizations to actually meet their pledges in an algorithmic way? Can we bake it into a smart contract where there are actual repercussions to not meeting your pledges? this is very optimistic thinking. I don't think many organizations will actually sign up for it, but I think, as an experiment, it's a valuable thing to try to conduct and see what could happen and at least open the doors to this sort of thinking.
And so a smart contract could enable an increasing schedule of prices, for example. You know, like you mentioned, the actual price of carbon is something like $3,000. Nobody's gonna pay $3,000 a ton of carbon today. But, if they're okay with starting at even 10, 20, $50 a ton, but you can say, "Hey, let's put policy in place or social pressure in place, where you need to sign up for increasing schedule of prices. And let's bake that into a smart contract." So here's where all of this stuff can kind of start fitting together and making sense.

Peter Rosberg (16
climate and sustainability,  I'd say it's also a pretty big buzzword, very important buzzword. Um, but what, uh, what first got your interest in, uh, moving into the climate and, and ecological space?

Ando Shah (16:17):
I've sort of been in the, the climate-adjacent space for a long time. I did, a startup in on Gaza, where we were trying to make solar energy more affordable to the people of East Africa

Peter Rosberg (16
You've spent so much of your life looking at sustainability and been adjacent to all the climate science  and blue carbon in the ocean. on your current project, what, what other groups and organizations are you working with to accomplish your goals? What collaborations are you doing 'cause that's, that's complicated, right? You're trying to do carbon pricing and figure out how these complex models work. You can't do that by yourself. So who else are you working with there?

Ando Shah (16:52):
On the, the carbon pricing side, we've been very lucky because at Berkeley, there's some of the top environmental economists, who work in practice there. And they are the ones who've built these models. So we had like full access to the people who wrote the code and devised the equations and all that. I'm, you know, very, very far from an expert environmental economics. And they really handheld us through the process of how to actually use these models, how to parameterize them so that we could do the translation of, "Hey, how can we allow this to be used by a layperson online, on a web i- interface," and then translate that into what corporations need.
So right now, we're in the process of interviewing a lot of ESG practitioners in different organizations, mostly Fortune 500 companies consultants that work with Fortune 500 companies to build out their net-zero programs and strategies and carbon pricing strategies to really understand where the roadblocks are for equitable carbon pricing, where the roadblocks are for adopting new mechanisms, which is not just reactive to what your, um, competitors are doing or what policy requires you to do, and also in, in some ways try to influence policy that enables all of these.

So I think on one side, there's I would say, you know, deep engagement with, um, with corporates. there's engagement with academics that's required to operationalize all of these. On some of the other projects, like for example, the, the sand mining one, where we are basically looking at satellite images across the world and detecting and using machine learning to detect where illegal and unregulated sand mining is happening at large scales.  the hope is to try to inform  local organizations to take action on that, inform local governments, local civil society, and so forth.
So over there, we're working with smaller nonprofits in South Asia.  we're working with the Global Sand Observatory, which is at the United Nations Environmental Program.  multinational, multilateral organizations, small NGOs, um, other academics.I'm really the person who's trying to string together this expertise and create a cohesive whole where they can interact in a meaningful way.

Peter Rosberg (18:53):

That's a great point on the monitoring and helping local governments enforce, the sound ecological practices.    
There has been negative press lately about some of these projects. There was a, a recent piece in the, uh, in the Guardian on forestry projects. And are they really additional? and for those of you that aren't...  listeners that aren't in the sustainability space, additionality means, would this project have happened without the additional funding, or, or am I paying some government that was going to preserve a forest anyway, or am I paying to support a project that wouldn't have been sequestering carbon had I not been there to support it? what kind of monitoring systems are in place to help show that? what are some of the other ways this can be addressed, like with market pressures?  for example, pricing.  what are your thoughts on, on ways to address this?

Ando Shah (19:423):
Okay. That's a great question, Peter. And I'm gonna start out by saying something slightly controversial, uh, which is that I think additionality, or the value of additionality, in my mind, is, uh, is quite context-specific. And I don't think there's anything necessarily wrong with being a, a government to continue protecting a very valuable ecosystem. For example, the Amazon, which is under incredible threat today,  and requires a lot of support from, you know, out- outside of Brazil and outside of the Amazonian countries to continue its protection.

I think there's a lot of nuance in there. hese are very wide, large examples. And I wanna get into some of the nuances. So let's zoom out from carbon a little bit. Let's go into, the greater aspects of,  why we should do this in the first place, right?

So carbon is a very clear answer. We should do this because we've put out too much carbon in the atmosphere, and we're gonna probably continue to do that at a detrimental rate, and we have to offset that somehow. Fine, great. but if we... If I go out there and I chop down, um, pristine rainforest and replace that with a, a timber plantation, which is basically eradicating all of the value, uh, that, that ecosystem provided not just to us, but to all non-human entities, eh, to things that are very, very hard to quantify, including things like the, the global climatic system and how changes in the Amazon and the, the Sahara, dust systems affect, winds and rainfall and  what have you, across the world.

These are very, very complex things to determine at a global scale for local, um, changes. So if you, if you look at something like biodiversity, right, we... we've become fairly familiar with the word biodiversity, but there, there isn't a good working definition yet for this.  the person who is really responsible for coining this term and making it popular is a very famous biologist by the name of EO Wilson, and he said, "Biodiversity is the totality of hereditary variation in life forms across all levels of a biological organization." Good luck translating that into a credit. (laughs)

if you talk about additionality in biodiversity, what does that mean? Does that mean that we, we increase the number of, um, the plants that were growing there, the number of species, of insects and, uh, birds and reptiles? Is it the total number of individuals? Is it the, the variation of genetic, uh, diversity? Like there are so many different definitions. And how do you come up with that and build a unit off of it?
With carbon, it's still hard but it's relatively easy to say a unit of carbon is a ton of carbon dioxide equivalent.  and we can measure that, you know. We have models of we're like, "This tree has this much carbon dioxide. The root system and the soil system has this much carbon dioxide." All that stuff is not completely worked out, but we are very far along.

In biodiversity, we've been struggling with this, you know, for, for a long time. .. we're gonna continue to struggle with this, but it's, it's an important conversation to have and push forward.
so there are situations where I think, you know, additionality constraints should not be enforced. There is a... There's a di- div- division now between this idea of protection and restoration credit. So if you have an ecosystem that's very degraded, and the, the owners of the land, whether it's a government or a, a private entity, they, uh, have the wherewithal to be like, "I wanna get paid to restore that ecosystem." I think that's a very, very good case for additionality. there's another scenario where, you know, take the example of the marine protected area in Costa Rica. Um, it is incredibly difficult and incredibly expensive to main- continue maintaining that, uh, marine protected area because, you know, it... it's not just that area. It's providing breeding grounds for hammerhead sharks and hawksbill turtles and... that, that go to other countries and provide other services. I- it, it allows the fish stock in the entire eastern Pacific Ocean to actually be healthy so that the, the food that is, uh, being consumed by the population of that entire coastline can also be preserved in a sustainable way. But these things are not priced into the price of fish that one pays in those markets.

So the government of Costa Rica wants to raise funding to be able to continue the protection. So I think the thing to do is rigorously evaluate not just what the outcomes of the protection are, but also what are the efforts that are being put in, because there are other externalities that can come in and completely dilute your efforts.

So, for example,  we can verify through satellite images, through, uh, reports, through sensors. Okay, things are actually been... are happening. Patrols are happening. Uh, illegal fishing is being stopped da, da, da. Things are happening. But the ocean continues to absorb carbon dioxide because we're releasing excess amounts of carbon dioxide, and that is acidifying the ocean that is just bleaching coral reefs, that is, um, making it harder for crustaceans to grow and thrive.

It is making it harder for, species to migrate, and so forth. And all of this is going to reduce the biodiversity in an area even though you do all the protection in the world. So that needs to be accounted for in certain ways i- in that very specific example. And I think all these nuances exist. So I think we have to be very careful about applying these, uh, these sort of hard lines. And we have to think about like the sort of greater repercussions within these complex interconnected systems.

Peter Rosberg (24
that's a great point., in the carbon world, you have this concept of you're setting a baseline. So you analyze what the baseline is. And then from there, you start calculating additionality and other, other, other aspects that prove that CO2 is being sequestered.
Then if I go off and I have a rubber tree plantation,  it's not really accomplishing anything other than that, (laughs) that very specific thing of, "Sure, I'm doing really good agroforestry on a monolithic crop of rubber trees, right?" That's, that's not what we wanna do.

And so trying to figure out how you can capture some of those other aspects or what in the sustainability world is called co-benefits to that carbon sequestration, um, with proving the biodiversity and, and proving t the baseline of that biodiversity is now higher,  it's very early days. You know, people joke about counting salamanders and stuff because (laughs) it's just like, ha- you know, there's literally, uh, microphones hanging in forest counting bird calls. , how do you prove that? But it's something-
we gotta figure out, right, 'cause it's not just about sequestering the carbon. It's also about where 14% of our species are... that are going away. 

Ando Shah (25:46):
Out of the millions of species that we don't-

Peter Rosberg (25

Ando Shah (25:48):
... even know about at this point.

Peter Rosberg (25:49):
Yeah. (laughs) Exactly.

Ando Shah (25:49):

Peter Rosberg (25

Ando Shah (25:51):
And this is where the stacking model becomes really interesting, right? But we're, we're not knocking on carbon. We're not knocking on additionality. I think these are very, very important things to keep into account. But here's where we can say, "All right, the, the carbon is important. We will provide the financial incentives for that. Let's also stack on the biodiversity. Let, let us evaluate what the... not just the market price, but also the true price of biodiversities in... within these markets."  We can stack on social credits. You know, what is it doing for the local indigenous population? How is it helping them?

Are we going into eco- eco-colonialism? Are we just grabbing land and providing incentives for large companies to come in and get these carbon credits and, you know, depriving the local, population of their, uh, sacred lands and their heritage?  I think we have to innovate in these fields to make all of these work.

Peter Rosberg (26:34):
Yeah. That's a great point. I mean, eco-colonialism is a huge issue and, and, being able to actually work properly with indigenous populations is, is super important for projects. If, if you end up hurting people (laughs) in a... in the process of trying to preserve the environment, what are you, what are you really accomplishing? Um, what, what other challenges are, are out there? What other challenges exist that you're, you're trying to address

Ando Shah (26
I think one of the, the big challenges, which was not particularly a big surprise, was that when we were in the process of speaking to corporations about incorporating the social cost of carbon, at least within their models of carbon pricing, I mean the thing that was evident is that there are so few companies that are even gone past the idea of operationalizing their net-zero pledge. Firstly, net-zero pledge or even reduction of, you know, emissions pledges.

Then, there's a question of operationalizing then. What are the tools that you use to operationalize? And one of them is carbon pricing.  who's actually making changes. And there are so few large organizations that are doing this. So... And then when you introduce this idea of, "Hey, this is a... our best idea of the true price of carbon," they look at the number, and they're like, "This is 700% that... the value of what we think the price of carbon is."

So it's, it's a non-starter, right? So then the question becomes, "How can we make this a starter?" So their idea is, "Okay.  we...  can incentivize organizations to use the social cost of carbon as a benchmark, as e- as something to aspire towards, you know?" At least, it's in, in their horizon, in their vision.
These are markets where there isn't regulation around carbon pricing like the, the European trading system that, you know, European Union organizations have to, uh, adhere to. Um, s- so I think the challenges are like getting these carrots and sticks in a configuration that provides enough incentive without robbing enough value so there isn't enough backlash. So I think the, the whole carbon pricing space is, is very fraught with this... the potentiality of both harm and benefit that, that, that can be derived from it, um, which I don't feel particularly adequately equipped to deal with. (laughs) I'm just learning so much as I speak to people in this space. . I think those have been some of the big surprises (laughs) for me.
One other challenge  that I think is, is more at an ethical level that I face personally is this idea of trying to put a monetary value on nature. It's kind of our only way of mashing it into the, the economic system and the economic model that the world has adopted essentially at large, you know, almost without exception. And it seems like there is no way out of this, I think there is value to thinking about alternative's... alternative ways towards protecting nature and having this balance between human activities and  what the biomes across the world need and also integrating ourselves more within nature and not being so separate from nature.
And a lot of this stuff is gonna sound woo-woo.  I think, part of the, the larger considerations the human race kind of has to start dealing with over the next few centuries. Otherwise, you know, it's kaput.

Peter Rosberg (29:29):

Yeah. Yeah, for sure. That is a big struggle in the industry itself, you know. There's the people that are saying, The only valid way to deal with this issue is for me to be tracking, as a company, my emissions and my supply chain emissions, and my employee emissions. And I should be laser focused on reducing those emissions and, uh, allowing people to buy carbon credits and to put dollar values on, on, um, sequestering carbon is the wrong way to go about it. We just need to be better. but for me (laughs) as a capitalist, (laughing) I also recognize, "Look, money, money is, is a, is a huge motivator."  if I can get a company that can't get rid of all their emissions, I mean, they should try to get rid of all their emissions first, right? But if they can't get rid of all their emissions,  allowing them to take e- their money and spend it to offset the rest to finance these projects that are also sequestering, I think, I think is, is a valuable, to the, the industry at large. And it's gonna jumpstart a lot of our... a lot of projects. But totally, totally understand that that's, um, you know, that's difficult, balance between the, um, the, the two different sides of what we're trying to accomplish here.

 it was also interesting, I was hearing in there a lot of what Ripple's been going through, and many large companies been going through in a corporate evolution, right? So you know XRPL, that's been energy efficient from the beginning, what little, carbon it produces that we, we now offset with, renewable energy, um, REX.  so that's a 100% carbon neutral.

 Ripple as a company, we started offsetting what, what our employees do, either by reducing our emissions, exposing that to, to our employees. They see just how impactful a plane flight may be, for example. , but now, I think we've hit that next level of a, of a corporation where we're like, "Okay, we need to be more active." And, and, uh, you know, we've started up this $100 million sustainability fund where we're actually investing in projects. and we hope we're gonna get a good rate of return on some (laughs) of these projects that we're investing in too. But we also feel that it's important for us to start putting money back into sustainability and building out this, nascent, market that, that needs more financial backing whether it's green bonds or buying forwards.

Google, Microsoft, there's a lot of other large tech companies that are starting to allocate billions of dollars into this space. how do you think your project is gonna help companies like Ripple invest in sustainability?

Ando Shah (31:44):

I'm not sure about that. , I (laughs) think one thing that could be useful with understanding how different companies and how serious they are about their internal carbon pricing mechanisms could be a signal for, you know, how successful they might be in decarbonizing. And so, if that can be tracked, uh, transparently in a way that's actionable, I think that could be useful for investors' point of view who is really focused on sustainability and making sure that the companies and their portfolio are also serious about it, um, instead of, you know, relying on empty pledges. that's on one side of things.

I think the other side of things is, you know, DLTs in general and, um, more, uh, sustainable blockchains can be used in the whole... uh, what we call the MRV process, the monitoring, reporting and verification process.  so there is, something called the Biodiversity Credit Alliance now which is created by the United Nations. It's got a whole lot of members. And one of the things they're trying to do is use DLTs to transparently store and track all of this biodiversity information.

You know, Peter, like you were saying, you, you know, you have these microphones hanging around in the, in the tropical rainforest to record bird calls. Where does all that data go? How do you process the data? How do you audit it and make sure that, you know, A, the algorithms that are doing the job are, not lying,  they're not inefficient, they're recording the data that can then not be manipulated. , they should not be double counted, blah, blah, blah. There's, you know, stuff at different levels of the stack that need to be made more and more robust.
And I think DLTs will play a large role in this, whether it's in the carbon, the biodiversity, or any of these green financing mechanisms that requires a lot of monitoring, reporting, and verification.  the technology can be used, and maybe some of the things that are being built by the technology can be used by these, companies and organizations. So perhaps, that's the way. (laughs)

Peter Rosberg (33:32):

We've covered a lot today. (laughing) We're a little overwhelmed by everything we've talked about.  well, last tip for our listeners,  how do you keep up?  what are your favorite podcasts or websites? What do you, what do you go to?

Ando Shah (33:44):

Oh my god, it's a mess. There's just so much out there.  it's kind of crazy. I mean, I do most of my reading on (laughs) because I read a lot of academic papers.  I read this book called The Ministry for the Future by Kim Stanley Robinson. It's very popular by now. You-
Peter Rosberg (34
It's a classic. Everybody should read that book.

Ando Shah (34:02):

it's a classic by now, right?  And it's not all doom and gloom because it's, it's really like, "How can we rise to the challenge the reality behind everything?"there's the idea of the carbon coin in there which is very fascinating. And that kind of put this idea in my head, "Okay, I need to switch gears." And that's how I ended up going to Berkeley and starting a PhD program. So I do recommend that.

Peter Rosberg (34:21):

Well, great. Thank you so much.

Lauren Weymouth (34:24)

It's so encouraging to learn of these new business models and applications of technology addressing the climate crisis. Ando is helping to build a world where our planet's global commons are better monitored and taken care of. Ando, thanks for taking the time out of your day to share your mission, and for visiting us in person to record this episode of All About Blockchain.