Last month’s post on reimagining the future role of subsidies for renewables touched on a little known but interesting venture by the Tapscotts called CarbonX, a new loyalty program for carbon offsets that runs on blockchain.
“Team Tapscott” also happens to be the same authors of “Blockchain Revolution,” a short but well-researched, 300-page, non-technical resource on the new technology.
Based in Canada, CarbonX aims to create a peer-to-peer, decentralized marketplace of tokenized carbon offsets by creating incentives for buyers and sellers of those tokens to make more sustainable choices in their daily lives. The tokens, called CxT, will be tracked via an app on mobile.
By taking public transportation, for example, or a ride-hailing service instead of a car, or by buying locally-produced instead of imported goods, CarbonX can return up to $250 to users of its platform each year, an amount it believes is achievable and sufficient to incentivize those users to remain active year over year.
Will It Work?It Depends On Who You Ask
Disputes do remain, but a growing number of Americans today are more aware of the impacts of their lifestyle and consumption habits to the environment, the climate and the planet.
A Pew survey in 2013 pointed out that over 60% of U.S. adults are willing to make major changes to their way of life because nearly 50% say climate change is due to human activity. The survey also pointed out that nearly 40% believe that reducing carbon footprint can make a big difference to climate change.
While the survey’s results are encouraging, habits die hard for many and there is institutional inertia.
Conservative policymakers in the U.S. government have suggested foregoing active intervention in favor of an alternative proposal to tax carbon emissions.
The proposal’s authors say such a program would “help reduce the country’s carbon footprint, while also providing support to many economically disaffected Americans.”
Increased scrutiny and/or regulation is also inevitable if not around the corner, such as the new requirement by the SEC for digital token-trading marketplaces to “register as an exchange.”
Still, a growing number of Americans are taking matters into their own hands in recent years by, for example, purchasing more electric cars and/or installing solar panels on their roofs.
This same customer segment, generally younger and more passionate about their carbon footprint impact to the planet than other segments, might be the initial target demographic for a product like CarbonX.
And executed right, its loyalty incentives should favor increased adoption. Loyal consumers feel special, according a study last year by Emily Collins of Forrester Research who found that empowered consumers want what they want when they want it.
Yes But Wait …
Do carbon offsets really help reduce carbon emissions? And if so, by how much?
A study, published in the journal Frontiers in Ecology and the Environment by Stanford researchers, and cited by Scientific American last year, found that carbon offsets do genuinely reduce emissions.
As for the amount of emissions reduced, the study, which focused on California forestry projects, found that roughly 4.7 million metric tons of carbon of emissions were saved. Credits earned for the savings were then distributed among 39 forestry projects, 16 of them within California.
So Why Use A Blockchain?
Because among the “maze of point systems,” loyalty and rewards programs available to U.S. consumers today, along with inefficient processes for exchanging points among program partners, loyalty programs are ripe for some kind of disruptive innovation that would make them easier to use, Harvard Business Review contends.
For those consumers who feel apprehensive about signing up to yet another loyalty scheme, blockchain can help provide a single loyalty points and rewards “wallet” where redemption and exchange for multiple loyalty programs are updated automatically according to each scheme’s rules.
As such a wallet makes it easier for consumers to use multiple loyalty programs, more sign up and retailers suddenly have an incentive to join in. In CarbonX’s case, access to carbon footprint data about their customers, says Tapscott.
A planned carbon calculator in CarbonX will be designed to collect detailed energy, transport and housing data from consumers which can then be combined with transaction data that would be useful for targeting other products and services.
Read Some More
“Why Do Consumers Love Rewards,” Ifeelgoods, March 2015.
“Blockchain Reinvents the Power Grid,” Fortune, May 2016.
“Carbon Offsets and REDD+,” B-E-F.org.
“Blockchain Will Transform Loyalty Programs,” Harvard Business Review, March 2017.
“How Consumers Really Feel About Loyalty Programs,” Forrester Research, May 2017.
“Carbon Offset Introduced in the Philippines,“ Reddit, June 2017.
“Carbon Offsets Really Do Lower Emission,” Scientific American, August 2017.
“Can Personal Carbon Trading Take Off on the Blockchain?” Fast Company, October 2017.
“15 Firms Leading the Way on Energy Blockchain,” Greentech Media, October 2017.
“Microgrids and the Blockchain are Powering our Future,” Wired, October 2017.
“New Blockchain Token Aims to Decentralize Energy Consumption,” Blockchain Business, December 2017.
“A Guide to Airline Carbon Offset Programs,” The Points Guy, January 2018.
“Statement on the Potentially Unlawful Platforms for Trading Digital Assets,” SEC, March 2018.
