| Title | Blockchain and regenerative finance: charting a path toward regeneration |
|---|---|
| ID_Doc | 87 |
| Authors | Schletz, M; Constant, A; Hsu, AE; Schillebeeckx, S; Beck, R; Wainstein, M |
| Published | Frontiers In Blockchain, 6, |
| Structure | I have analyzed the article and extracted the sections with two sentences each: The Regenerative Finance (ReFi) movement aims to fundamentally transform the governance of global common pool resources (CPRs), such as the atmosphere, which are being degraded despite international efforts. The ReFi movement seeks to achieve this by utilizing digital monitoring, reporting, and verification (D-MRV); tokenization of assets; and decentralized governance approaches. The ReFi stack is a combination of technological and traditional processes that interact and shape each other, including accounting using D-MRV approaches, finance and market creation through tokenization, and decentralized governance approaches. Decentralized governance serves as the overarching system that intersects both information transparency and accountability. Digital monitoring, reporting, and verification (D-MRV) approaches use digitally native data collection approaches like earth observation, source data like local sensors, and big data approaches, increasing information availability and interoperability while improving quality and transparency. Currently, most climate data are still collected through analog and manual processes, leading to high costs and limited data availability. Tokenization has the potential to increase pricing transparency in the carbon offset market by creating a digital representation of carbon credits, which can be recorded and traded on a secure, decentralized blockchain ledger. Tokenization enables businesses to capture private value from the support of public goods without expropriating or displacing the co-benefits created through this approach. Decentralized governance approaches are necessary for the effective governance of global commons, as they enable the participation of multiple stakeholders and provide a more inclusive and participatory decision-making process. The governance of blockchain technology also raises new governance complexities that have yet to be addressed. The present ReFi literature does not engage with regenerative principles and models, so it remains uncertain and undefined how ReFi can support a paradigm shift toward a regenerative global model. The commodification of carbon assets primarily leads to short-term thinking, with a focus on buying and selling carbon credits rather than making long-term investments in sustainable practices and infrastructure. ReFi needs to define a clear path forward of how it distinguishes itself from the status quo of extractive economics and create and implement models that actually drive the “Re-” in ReFi. The ReFi community needs to overcome its own interoperability limitations before delivering on the promise of improving interoperability in the larger climate ecosystem. The ReFi movement has potential to drive large-scale change, but it needs to address the challenges associated with blockchain and related web3 tools and challenges related to the coordination and governance of on- and off-chain activities. The governance and rule-setting of the off-chain community through the design of community rules for technology evolution, adjudication, and conflict resolution is a colossal governance challenge. |
| Summary | The Regenerative Finance (ReFi) movement aims to transform the governance of global common pool resources, such as the atmosphere, by utilizing digital monitoring, reporting, and verification (D-MRV); tokenization of assets; and decentralized governance approaches. However, ReFi faces limitations, including a lack of a clear path forward, interoperability challenges, and governance complexities. The authors propose a ReFi stack of interconnected components, including accounting using D-MRV, finance and market creation through tokenization, and decentralized governance approaches. The authors also explore the theory of regenerative economics and CPRs to encourage further discussions and advancements in the ReFi space. Regenerative economics seeks to create a more sustainable and equitable economy by prioritizing the regeneration of natural resources, community well-being, and long-term value creation. ReFi can enable decentralized decision-making processes and more transparent and auditable governance structures through the information commons. However, the absence of a formal framework for the governance of now digitized global commons in the ReFi space raises questions about whether ReFi communities will govern the commons more successfully than countries or incumbent transnational governance processes. The authors argue that ReFi has potential to drive large-scale change, but it needs to address its growing pains, including the need for a clear path forward, interoperability challenges, and governance complexities. To achieve this, ReFi needs to focus on creating an information commons that leverages the potential of decentralized and transparent data, democratize financing through tokenization and pooling of index tokens, and enable decentralized decision-making processes and more transparent and auditable governance structures. |
| Scientific Methods | Based on the provided scientific paper, research methods used in the article can be identified as follows: 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. The research methods used in the paper are primarily qualitative, including literature reviews, conceptual frameworks, case studies, and expert interviews. The paper also incorporates quantitative data analysis, conceptual modeling, and system dynamics analysis to support the authors' arguments. The use of blockchain technology and tokenization is also a key research method in the paper. |
| Article contribution | The article presents a comprehensive analysis of the Regenerative Finance (ReFi) movement and its potential to address the challenges of climate change and resource degradation. The authors provide a clear definition of ReFi, which includes digital monitoring, reporting, and verification (D-MRV), tokenization, and decentralized governance approaches. The article contributes to the field of Regenerative Economics by highlighting the need for a paradigm shift from extractive economics to regenerative economics. The authors argue that ReFi has the potential to create a more sustainable and equitable economy by prioritizing the regeneration of natural resources, community well-being, and long-term value creation. The article also explores the limitations of the ReFi movement, including the lack of a clear path forward, growing pains, and the need for a formal framework for the governance of now-digitized global commons. The authors suggest that alternative blockchain deployments can contribute to CPR governance and regeneration without relying on private-for-profit financial instruments for managing public goods. The article provides several key contributions to the field of Regenerative Economics, including: 1. A clear definition of ReFi and its potential to address climate change and resource degradation. 2. An exploration of the limitations of the ReFi movement and the need for a formal framework for the governance of now-digitized global commons. 3. A discussion of the potential for alternative blockchain deployments to contribute to CPR governance and regeneration. 4. A framework for evaluating the effectiveness of ReFi initiatives in driving systemic change. Overall, the article provides a comprehensive analysis of the ReFi movement and its potential to address the challenges of climate change and resource degradation. The authors' definition of ReFi and their exploration of its limitations and potential provide a valuable contribution to the field of Regenerative Economics. The article's contributions to Regenerative Economics can be summarized as follows: 1. 2. 3. 4. 5. Overall, the article provides a comprehensive analysis of the ReFi movement and its potential to address the challenges of climate change and resource degradation. The authors' definition of ReFi and their exploration of its limitations and potential provide a valuable contribution to the field of Regenerative Economics. |
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