Published Mon Jun 20 2022
In April 2022, Polygon ushered in a new era for the on-chain Voluntary Carbon Market (VCM), committing to offset the network’s carbon emissions since inception and pledging to go carbon negative for all of the network’s future transactions. These pledges form a part of Polygon’s broader commitment to sustainability via its Green Manifesto, which also earmarked $20 million in funding for initiatives that leverage Polygon’s technology stack to promote climate action.
Polygon’s climate-positive commitment has cemented its roles as both the base layer of Regenerative Finance (ReFi) and as home to the on-chain VCM: Polygon has the deepest liquidity for carbon trading, the greatest utility and adoption for climate-focused projects, and a low energy footprint. Furthermore, the network's emissions will drop dramatically once Ethereum's merge to the Proof-of-Stake approach completes.
Using KlimaDAO’s carbon retirement aggregator, Polygon has now fulfilled its carbon-neutral pledge, retiring 104,794 tonnes in the form of Toucan’s Base Carbon Tonne (BCT) and Moss Earth’s MCO2 tokens, representing a financial commitment of over $400,000. In doing so, Polygon has truly set its Green Manifesto in motion.
Polygon’s carbon retirement transactions using KlimaDAO – which accrued only ~$4 in gas transaction fees, and 16 seconds in aggregated transaction times – are particularly notable:
This article takes a deeper look into the real-world impact of Polygon offsetting its historical emissions.
Polygon’s historic carbon offsetting followed the same process as any organization using Klima Infinity to achieve climate-positive outcomes:
Breaking down the retirement, Polygon opted to retire 100,300 tonnes via BCT and 4,494 tonnes via MCO2. Amounting to a total of 104,794 tonnes, the tonnage is significant – equivalent to roughly 1.2x what an organization like PayPal emits per year, or the equivalent of 69,862 transatlantic flights from London to NYC.
Offsetting carbon at this scale will have tangible real-world impact. Polygon’s commitment has irrevocably and verifiably removed over 100,000 certified carbon credits from the market. By retiring these credits, existing forest conservation and renewable energy projects are incentivized to continue – and even ramp up – their activities, in order to mitigate the release of more carbon into the atmosphere, while climate-minded entrepreneurs are encouraged to launch their own green initiatives and seek carbon credit certification as a reward for doing so.
The journey of the carbon credits from project to on-chain retirement is illustrated below:
Blockchain technology enables us to follow the data trail: all tokenized credits retired by Polygon carry metadata – important information about the credits such as vintage, project type, and geography. As part of their offsetting goals and strategy, Polygon decided to support specific projects by retiring the carbon credits these projects have generated. Below we profile some of the projects they chose:
Bull Run Forest Conservation Project, Belize
The Bull Run Forest Conservation project, located in Belize in Central America, protects 4,650 hectares of pine forests – roughly 14 times the size of Central Park in New York. This area is not only a home to several endangered species such as orange-breasted falcons but also comprises several natural bird habitats, unique landscapes, and pre-Columbian Mayan ruins.
The Bull Run Forest acts as a carbon sink by absorbing 12,315 tonnes of GHGs every year. It also preserves biodiversity and provides a sustainable means of livelihood for the inhabitants of the forest. This area, if not conserved, would have been subject to deforestation, being converted to a coffee plantation. The project is now preserved for 30 years (ending 2038) and is protected through regular patrols and a restrictive covenant (restriction on the land use), which is placed on the property for the life of the project.
Ghani Solar Renewable Power Project, India
Ghani Solar Power Project is a 500MW renewable electricity generation project in Kurnool, Andhra Pradesh in India. It is a part of a larger solar park by Greenko Group. Over a 10-year period, the project will avoid the emission of 887,800 tonnes of GHGs every year. It will also replace 919,800 MWh/year of electricity that would have been generated by thermal and fossil fuel-based power plants.
The project has generated economic opportunities during the construction and operational phases. It has also led to the development of community infrastructure, in particular improving road connectivity in the area. Successful implementation of the project encourages investors to consider similar projects, helping to move the entire power generation infrastructure toward renewable energy. This is key to not only reducing GHGs but also the atmospheric pollution of particulate matter – an issue directly affecting the health of millions living in larger cities across Asia.
Wind power project at Jaibhim, India
The wind power project at Jaibhim in India is located in the Dhule-Nardurbar wind park in the state of Maharashtra. It was built by Suzlon (a Wind Energy company) for Serum Institute of India, one of the biggest vaccine manufacturers in the world. As part of the project, 16 wind turbine generators were commissioned, producing 50,662 MWh of electricity every year, resulting in the annual mitigation of 53,000 tonnes of GHGs.
Besides providing economic opportunities, this project helps to reduce India's reliance on fossil fuel-based power generation. Despite an abundant wind and solar energy generation profile, India has only tapped into 10% of the renewable energy landscape. In addition to the revenue from power generation, revenue through carbon credit issuance incentivizes investment by the operators to improve the efficiency of power generation, and pursue more renewable energy investments.
Various conservation projects in the Amazon rainforest via MCO2
Moss.Earth is determined to preserve the Amazon forest, which is one of the largest carbon sinks in the world. The Amazon forest holds more than 123 billion tonnes of carbon above and below the ground. Wildfires and deforestation tied to animal-focused agriculture are some of the biggest problems facing the Amazon, resulting in 300 million tonnes of carbon being released into the atmosphere each year.
Moss, through the MCO2 token, helps to finance various REDD+ certified projects – one of the most widely recognized frameworks for environmental and societal impact. By retiring MCO2, Polygon is helping to incentivize the protection of the Amazon.
By retiring over 100,000 tonnes of tokenized carbon, Polygon has solidified its status as the green hub of ReFi and the base layer of the on-chain carbon economy. The outcome is unambiguously positive, and the benefits extend far beyond the blockchain. Projects building on Polygon gain an instant competitive advantage, being able to build on a sustainable base layer, where each transaction’s environmental impact is offset. Polygon then benefits further, as it can draw in developers and funds that have a long-term focus on climate action. Ultimately, our entire planet benefits, as the incentives to fight climate change continue to become more attractive, and the on-chain VCM receives validation as the venue to take advantage of these incentives.
The future for Polygon is bright. Ethereum’s transition to Proof-of-Stake consensus in 2022 will result in a 99% reduction in Polygon’s emissions footprint. In order to prepare for its future offsetting needs, Polygon decided to purchase and stake KLIMA. The staked KLIMA balance will accumulate tokenized carbon credits that are then distributed to Polygon as staking rewards. Polygon will continue to periodically retire carbon to claim the benefit of the carbon offsets.
We believe that Polygon is setting a new green standard, and expect Layer 1 blockchains, the broader Web3 ecosystem, and, beyond that, the non-crypto-native economy to follow suit. Watch this space.
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