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☁️ "Carbon Offsets; an Investment not an Expense"


Photo by Jasmin Sessler / Unsplash

Table of Contents

Host: Silas Mähner
Guest: Demian Klenk | Co-Founder | 6c-Index
Category: ☁️ Carbon Reduction | Carbon Offsets

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Podcast’s Essential Bites:

[7:16] “On a very high level, [6c-Index] is a profound new tool to redirect the narrative and sentiment on how we actually clean the atmosphere. It's a way of taking an immature market, which has a lot of new technology that lacks the kind of transferability and the investment and the understanding from the general markets and we're taking a lot of traditional tools from finance, and using them in a new way through blockchain technology to amplify those markets.”

[11:25] “Generally, it works out to about 1% of your gross revenue that you need to spend to remove carbon. […] The issue and the reason that the carbon market itself is seen as a market failure is that the 1%, and the idea of going zero doesn't solve the issue. We have 50 billion tons and growing that we need to remove. And even if everybody got to that 1% that wouldn't account for neighboring countries or companies that aren't mandated to do it. So we need to find ways to change that overhead costs to an investment. And that's where the derivative programs come in, like ours.”

[12:47] “The way that the carbon market works is that you buy those credits, and then you […] retire them […] so they can never be used again, and they become a dead asset. They become a cost on your books. But through blockchain, we contractually retire them. So they can never be used for any other specific individual mission, they can never be used as an offset, but they maintain their collateralized value. So that they can still grow as an appreciating asset and it can be used for alternative revenue models. So that 1% cost can turn into a two plus percent investment of your risk on portfolio.

[13:46] “If nothing else, […] crypto has proven that we can create massive market caps, volume sizes of almost 3 trillion with almost no centralized policies. So if we start to apply those to agrarian or altruistic sectors like carbon, […] I think that it has the potential to really change the discourse in general, and eventually, actually the value system of humanity. That's how big I think it can go and how important it is, if it gets engaged properly.”

[17:23] “The problem is the price, because it's still at a subsidized level. We know what it costs to remove the carbon, but it's traded much below that. And so it doesn't make great investment sense. That being said, the carbon markets have been one of the most successful markets there are in the last year and a half, two years. They're up about 120%.”

[17:56] “The main issue is about liquidity, meaning the volumes that you can trade. […] We got to remove 50 billion tons [and] the average price of removing that adds up to about $9 trillion. […] It's 12% of the GDP of all the money made in the world in a year. But how do you move that amount of money? […] The reality is that we don't have carbon products. The market doesn't exist. And, and generally, when you move that amount of capital, that amount of money, there has to be some sort of security, usually a bond level security, so it's protected by a government body, or different centralized agencies.”

Rating: ☁️☁️☁️

🎙️ Full Episode: Apple | Spotify | Google
🕰️ 45 min | 🗓️ 06/26/2022
✅ Time saved: 43 min

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