6/16/2022 - Technology and Innovation

Compensate: A good business

By Horacio Gustavo Ammaturo

Compensate: A good business

Although corporate social responsibility is not defined either by formal laws, decrees or regulations, it involves all public and private practices, “self-regulated” by companies and corporations in order to contribute to the care of the environment and society, in general, of the places where they operate.

In 1994, sociologist John Elkington defined the concept of “Triple result” as a result of the consideration of the business activities, relating the traditional economic and financial result to the social and environmental effects that they produced within the evaluation period.

Among the various concepts that are included in the responsible practices, we will focus on those that refer to the impact of business and social activity on the environment and awareness about the effects that greenhouse gas propagation has on the earth.

For decades, the vast majority of states in the world have expressed concern about pollution and global warming.

Initiatives such as the United Nations Framework Convention on Global Warming of 1992 or the famous Kyoto Protocol of 1997 intended to be seeds to put the agenda into question, although after almost thirty years few results have been obtained.

The commitment made in Kyoto, Japan, by some states and companies to reduce the climatic and biological impacts on the product environment of the productive, industrial and commercial processes are only required to the signatories of the agreement and many of the major responsible have not been expressly involved in these attempts.

Carbon damage. An Argentine in front of the proposal.

Seeking a convenient proposal from an economic point of view that companies that start the way to reduce the impact produced by their activities, an economist born in Argentina, Graciela Chichilnisky, who is currently a professor at Columbia University in the United States, presented in 1,93 the proposal to use carbon obligations. This work, together with its formal theory of Sustainable Development of 1,996 and the participation as U.S. representative in the Intergovernmental Group of Experts on Climate Change, gave it the Nobel Peace Prize in 2007.

Basically, the carbon bond system allows companies to contribute to the improvement of environmental quality and thus regulate the impact their activities have through the emission of CO2 certificates, considering the right to issue CO2 as a well exchanged and with a price established on the market.

A carbon bonus represents the way to compensate a ton of carbon dioxide, benefiting companies that do not issue or decrease emission and paying those that issue more than agreed.

The work carried out by the representatives who sought the form of awareness of rulers, entrepreneurs and inhabitants of our planet on the effects of practices that degrade our lands, waters and air began to germinate in the form of protective organizations of biodiversity, plant and animal species, and in our days in the voice of young millennials who perceive in an almost innate way the responsibility we have all about what passes and will pass in our environment, as Greta Thunberg

“Ecology and bitcoin”

Many of the investors in digital assets, mostly young, have expressed their differences regarding the lack of consideration with the “green economy” concept of Bitcoin, to such a point of stating that this type of “virtual money leaves a real carbon footprint”.

The Bitcoin algorithm requires increasing amounts of computer processing capacity to validate transactions. In fact, in our day, if it were a country, its carbon footprint estimated annualized would be comparable to that of New Zealand in about 37 million tons of carbon dioxide. Its detractors argue that a Bitcoin transaction generates the equivalent of CO2 that 706,765 passes from a Visa credit card.

Technological developments are not alien to environmental problems.

Not all cryptocurrencies need algorithms that require energy quantities for their processing. In fact, the technology in which digital assets circulate, Blockchain, will be critical to improving the interaction of finances with the environmental ecosystem.

This technology allows you to create, manage and audit digital carbon certificates. Blockchain technology provides the basic components for what is known as decentralized autonomous organizations, allowing climate commitments from states, companies and people to engage in transnational climate initiatives and individual climate actions.

Market-based carbon pricing instruments such as emission trading schemes often face challenges around data collection, processing and analysis of transparency that make transactions in different systems quite complex. The adoption of Blockchain, Big Data, Internet of things and other modern technologies promise to address the needs of the new generation climate markets to develop, manage and harmonise the information of greenhouse gas mitigation actions in multiple industrial sectors and government jurisdictions.

Oxygen certificates in Blockchain. Once again Argentina.

Currently, there are several digital asset projects based on ways to compensate for CO2 emission.

The Banco de Florestas Foundation is close to launching in the form of ecologically active digital carbon certificates generated with Blockchain technology.

In the view that, in order for industries whose processes generate toxic waste or are used pollutant chemicals for production processes, both ecological liabilities, there must be an environmental asset that compenses it, the first answer to be resolved is compensation for the conservation of existing natural lungs.

Forests, forests and natural meadows, many of them inaccessible and with the appearance of little prodcutive value make counterpart the emission of greenhouse gases from activities such as livestock, likes, thermal power plants or even any means of transport.

The current economic model punishes those who have environmental awareness and rewards the unconscious, because while the first preserves assets without commercial value, the second obtain the incomes on their land and are free the benefit of compensation of the preserved surfaces.

In the best style of Fray Luca Pacioli, recognized for having formalized the dual starting system, the basis of the accounting of our times, environmental certificates in Blockchain are a digital, transferable, auditable and registrable manifestation of the ability to compensate for the emission of greenhouse gases.

Combining satellite technology to identify the plant species that are present in a prediction, the databases on the oxygen generation capabilities and CO2 compensation of each one, and Blockchain, owners of this type of land can exchange the domain property for certificates representing the contribution each hectare makes.

These certificates will be acquired by environmental passive generators so that their balance sheets are incorporated as investment and compensation according to their corporate social responsibility. In this way, the asset and debt are within the same state of results.

One of the most interesting aspects to consider is that much of these lands are fiscal and are in the hands of the national states, therefore the undeniable role of physically auditing and preserving the foretelling could fall in the state and obviously receive revenue.

Social evolution, first of all, shaped in the environmental awareness of today's generations, the tactical need to solve the harmful effects for man's life and other spices for greenhouse gas emissions, the transparency that provide the products made using Blockchain as a tool and the convenience of awarding those that preserve virgin terrains that help compensate our contaminations make these special moments in history to generate a turning point in which to fulfill good environmental commitments.

Like bitcoins, the ability to compensate CO2 is a finite element, but the difference is that without cryptocurrency mankind has survived thousands of years, in exchange without oxygen would be impossible.

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horacio gustavo ammaturo

Horacio Gustavo Ammaturo

I am Gustavo Ammaturo. I have a degree in Economics. CEO and Director of infrastructure, energy and telecommunications companies. Founder and mentor of Fintech, DeFi and software development companies. Blockchain Product Designer.

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