Adam Neumann is back. The co-founder and former CEO of WeWork and subsequent subject of the podcast-turned-TV-series WeCrashed now says he wants to fix climate change — with crypto.
Specifically, Neumann wants to put carbon credits on the blockchain. But making carbon credits easier to buy and sell does nothing to solve the real problem with carbon credits and offsets, which is that they’re broken. More easily trading a broken product doesn’t make it any less broken.
Neumann’s new company is called Flowcarbon, and it has big ambitions, which will be backed by $70 million from the crypto arm of the venture capital firm a16z. On its website, Flowcarbon says that the current system of buying and selling carbon credits is built on an “opaque and fractured market infrastructure” and that the carbon credits themselves have “little liquidity, accessibility, and price transparency.” In other words, the problem is the carbon credit market, and the way to fix it is by making it easier to trade carbon credits.
This is a classic argument for a crypto company, by the way. The answer for everything in the crypto world seems to be greater commodification. But when it comes to saving the planet (as with most things in life), that’s not necessarily true.
Carbon credits and offsets are two sides of the same coin, and the terms are often used interchangeably. A carbon offset refers to a project that reduces carbon dioxide emissions (preserving forests is a popular one), and carbon offsets generate carbon credits. And both trade in units that represent one metric ton of carbon dioxide. Flowcarbon is supposed to work through the creation of a new crypto token, called the Goddess Nature Token, or GNT. Those tokens would represent carbon credits, and Flowcarbon users looking to trade carbon credits would do so by buying and selling those tokens.
That second part has the potential to be problematic: Unlike stocks or cryptocurrencies, carbon offsets ultimately need to be taken off the market in order for them to have any lasting, traceable impact on a company or individual’s carbon footprint. Google, for example, “retires” any carbon offsets it buys, putting a stop to the trading so nobody else can claim their climate benefits. (How effective those offsets ever were is debatable.) Flowcarb
