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Nori Is Creating the World’s First Carbon Removal Marketplace

Amy Brown headshotWords by Amy Brown
Investment & Markets
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A few years ago, Paul Gambill, the CEO and founder of Nori, a startup aimed at creating a blockchain-based market for carbon removal certificates, was grappling with what he called “a simple problem” - that the world was making the quest to take on climate change far too complicated.

Rather than despair over climate change, Gambill said his engineer’s mind told him there had to be a solution. Gambill, with experience developing mobile and web applications for companies like Nike, Target and Starbucks, established the first-ever community dedicated to the large-scale removal of carbon from the atmosphere, Carbon Removal Seattle. That led him to think about taking the same approach to a global level.

“I was curious about why there were not more efforts to solve the whole thing and make it go away. It seemed to me this was a simple problem. There are too many greenhouse gases in the atmosphere. There had to be a way to pull them out, and create a value for them, so people have an incentive to remove carbon,” Gambill told TriplePundit.

With plans to launch in early 2019, Nori’s goal is to create a new way for anyone in the world to pay to remove excess carbon dioxide from the atmosphere. The company does so by connecting buyers and suppliers in the world’s first carbon removal marketplace with a mission to reverse climate change, Gambill says.

Tapping into transparency of blockchain

The company has created a cryptocurrency called a Nori token; one token equals one tonne of carbon removed. Once a carbon removal claim is verified by an accredited independent third-party, Nori issues a Carbon Removal Certificate (CRC).

The transparency of the blockchain—meaning, the cryptographic proof that what is on the blockchain is what actually occurred in the digital world—ensures easy auditing of the lifecycle of the CRC, according to a Nori white paper.

“A Nori token is sort of like a gift card for a future carbon purchase,” Gambill explained. “The buyer can sell it or hang onto it. He or she can sell it for cash or another cryptocurrency. This creates a universal, market-driven price for carbon, something that economists and companies have wanted for decades.”

Power to the people

Nori converts what has been a lengthy, costly, and unreliable process to a simple e-commerce transaction, Gambill adds, which can be as large as a company paying to remove megatons of carbon or as small as an add-on to a taxi ride.

The continual wrangling over a global climate treaty—the COP24 climate talks last week barely ended in agreement on a set of rules to help curb global warming—is yet more evidence, Gambill told TriplePundit, “that people are sick and tired of waiting around for policymakers and politicians to do what needs to be done.”

“We’re saying, ‘Forget that, let’s put the power in the hands of everyday people and everyday companies to start cleaning up the atmosphere. There is no need to wait for large scale voter approval or policy changes. You can deal with the carbon problem right now,” he said.

Problems with current offset market

“Carbon offsets don’t solve the problem,” Gambill says.

Nori’s aim is to remove the seven or eight layers of middlemen in the traditional carbon offset markets, and to reflect the true market value of removing one ton of carbon from the atmosphere— rather than government-defined price ceilings and floors. It would resemble a simple e-commerce transaction.

Greenhouse gas emissions to the atmosphere should be treated like any other waste stream, Gambill argues. Just as most people pay garbage collectors to remove waste and break it down, recycling what they can, and responsibly storing the parts that can’t be recycled, Nori would become the garbage collectors of greenhouse gas emissions, he says.

“Considering them as such brings the issue onto an economic—rather than moral—plane,” he adds.

Providing incentive to scale new technologies

As futuristic as it sounds, there are already many viable ways to remove and store carbon from the atmosphere, Gambill notes, including regenerative agriculture, afforestation, biochar, marine permaculture, bio-energy with carbon capture and storage, mineral carbonation, direct-air capture and the use of more climate-friendly construction materials.

The pioneers behind each of these methods need more funding to scale their solutions, as well as a price signal to ensure their upfront costs will be worth the investment—and that is what Nori would address, he explains.

By creating a fair and transparent marketplace for activities that remove carbon dioxide, Nori says it will drive the expansion of a brand-new global industry that will restore the carbon balance in the atmosphere, he predicts.

Helping farmers sequester carbon in the soil

The first methodology on Nori’s platform is regenerative agriculture. There are plenty of reasons for this, Gambill explains. Agriculture and food companies want farmers to transition to this type of farming, but have often not been able to adequately account for and verify removal of carbon from the soil. And farmers, faced with soil erosion and the cost of fertilizer, are all in favor of adopting practices that are more sustainable—while making money for removing carbon.

Turning carbon into a cash crop is the aim of the collaboration announced last month between Nori and Granular, which gives farmers access to software and analytics to increase their overall profitability. Together, they are working to enable farmers to get paid for sequestering carbon in their soils.

“This is a big deal because farmers use Granular for planning and operating their growing practices, and in the process they capture a lot of data that is useful for measuring the carbon that they store in the soil,” Gambill says. “We want to make it as simple as possible so farmers who are already working to restore the health and quality of their soils can easily monetize that.”

Finding the buyers

Gambill says he expects the buyers on Nori’s platform to be people and organizations who have long wanted to neutralize their carbon footprints. But these same buyers generally don’t trust that the carbon offset credits offered for sale in traditional markets have actually accounted for avoiding or removing emitted carbon dioxide in the full amount they purport.

Nori believes airlines, which currently have no way to directly neutralize the carbon footprint of air travel, will be among those first movers, along with cities and government that can use the Nori platform to meet and motivate commitments to reduce or even negate carbon emissions.

To grow the market, tokens will be heavily discounted compared to the typical price of carbon markets, anywhere from $1 to $20 per ton of carbon. Nori’s tokens will cost $0.075 per ton for corporate customers and $0.15 per ton for investors.

Taking the first leap

A company called Kyero, which manages Spanish property transactions for overseas buyers, was the first to take the leap. The online business realized its carbon footprint was larger than they had assumed, considering the flights taken by its staff, the electricity consumed and heat generated by data centers and that their business model is built on encouraging clients to take a lot of long-distance flights.

As co-founder Louise Dell described her dilemma in an article on LinkedIn, realizing the true scale of the carbon the company was emitting, directly or indirectly, into the atmosphere could have been a moment where she would “wave my hands in the air and bemoan the futility of trying to do something - and excuse myself from doing anything at all.”

That changed when she found out about Nori, she writes. Kyero invested in order to remove double the amount of its CO2 footprint for the next 10 years. Furthermore, Kyero will acquire these carbon removal tokens so that it can remove carbon emissions at a rate twice of what the company’s customers are projected to generate over the next 10 years when flying to Spain.

“At this early stage there are many unknowns and what-if's about the marketplace Nori is creating,” Dell acknowledges. “Maybe the sensible thing would be to stand back, do nothing and see if they make it? There are so many ways to justify playing a ‘wait and see’ game - but, we know how that’s likely to play out. Besides which, Kyero is a marketplace business, so we understand that ‘someone’ has to jump first to get the ball rolling.”

Democratizing the power to remove carbon

While the major buyers in the Nori marketplace are expected to be companies, the founders wanted to make it broadly available to any individual over the age of 18 by launching a crowdfunding campaign. The initial target was to sell $50,000 worth of tokens, a figure that has more than doubled so far.

Recognizing its novelty and its complexity, Nori is actively engaged in educating people about how its platform will work. It hosts a weekly podcast called “Reversing Climate Change” and has launched a webinar series to provide updates, gather feedback, and dive into specific topics around its market design.

“Ultimately our goal is to show people that carbon removal really is possible, that the incentives do exist,” Gambill said. “Too many people have been afraid of climate change, but there are solutions, if we build the right incentive structures.”

Image credit: Aleksandr Eremin/Unsplash

Amy Brown headshotAmy Brown

Based in southwest Florida, Amy has written about sustainability and the Triple Bottom Line for over 20 years, specializing in sustainability reporting, policy papers and research reports for multinational clients in pharmaceuticals, consumer goods, ICT, tourism and other sectors. She also writes for Ethical Corporation and is a contributor to Creating a Culture of Integrity: Business Ethics for the 21st Century. Connect with Amy on LinkedIn.

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