Looking Back on Our Time at COP28 in Dubai

CARBON Copy was at COP28 in Dubai from December 1st to 9th. What follows is a recap of the experience from our perspective, with a particular focus on regenerative finance and the broader Web3 impact space.

Note: If you are looking for a recap of the negotiations and outcomes, check out this, this, or this. Climate Collective also has great daily recaps on X.

Getting to know COP

Having not been to a COP before, the thing that struck us was just how much there was going on outside of the official COP venue. You could literally spend all of your time going to events and not even visit the actual COP venue.

Since we didn't have passes to the Blue Zone (the official UN part of the conference where the negotiations happen), we opted for a mix. We spent a couple of days in the Green Zone and the rest of the time going to events and meeting people in the city.

The Green Zone was like a climate theme park powered by massive solar "trees." It featured pavilions galore, everything from energy transition to country-specific venues. The Uzbekistan pavilion was particularly well designed with its mini Registan feel. There was also a startup village, where climate startups could promote their solutions, and interactive exhibits depicting the future without urgent climate action.

One thing we learned on the first day is that you don't want to burn yourself out right away. We came with a fairly packed schedule but decided to pare it down significantly once we realised how much time we'd spend in transit if we wanted to attend everything.

Okay, enough preamble. Let's get to the good stuff.

A solution to a real problem

Massive carbon footprint aside, the great thing about COP is the diverse group of people you get to meet. Not only people from different regions of the world, but representatives from virtually every discipline interested in the climate. It was a stark realisation that collaboration is what's going to get us to our goal.

The international development people had a lot of interesting things to say on the topic. For years, they said, farmers around the developing world have received assistance in the form of technological advancement. They now have access to drought-resistant seeds, modern irrigation techniques, and efficient machinery. What they lack is financing to bridge the time lag between initial planting and harvesting.

It turns out that the finance side of the development house has not advanced nearly as quickly as the technology side. Big lenders, for fear or risk or low profits, seem loathe to provide the capital that kickstarts the agricultural flywheel. The thinking being that farmers just need the initial loan to get started. After that, revenue from the harvest will go towards the next planting and loan repayment. Micro-credit institutions help, but the scale is too small for the kind of impact needed.

"What we need are lenders to step up," as the common refrain.

We couldn't help by reply, "Are you familiar with ReFi?"

ReFi seems poised to fill this void. Web3 lending protocols provide a level of efficiency not attainable by traditional lenders, so borrowing rates can be less onerous for farmers. In fact, we're already seeing this in practice. impactMarket and EthicHub are demonstrating success at a relatively small scale, putting them in a great position to expand lending capacity.

While generally skeptical, the international development people we talked to admitted that Web3 lending protocols, while still needing to demonstrate a lot more in terms of financing sources, are an intriguing solution to the problem of liquidity.

A question of identity

In other conversations with people outside the ReFi space, the question we found ourselves answering most often was how ReFi fits into the larger effort against climate change. Or, put another way, where does ReFi start and where does it end?

The answer we gave was centered around Web3 and money. Did ReFi necessitate the use of Web3? Yes. Did it require value changing hands in some way? Yes. But this prompted more questions, like What is the difference between ReFi and things like micro-lending? and What about all of the services, dMRV providers and so on, that support ReFi? How do they fit in?

In hindsight, these questions weren't something we had spent much time thinking about prior to COP, but have spent a lot of time thinking about since. The question we keep arriving at is whether ReFi risks isolating itself by trying to establish boundaries of what it is and isn't? Since we're all after the same goal, perhaps it would be better to present a broader picture to the world?

To us, this may be the fundamental question heading into 2024. There are people and projects out there doing incredible work. What's the best way to present a united front so that we can present a clear picture of what's going on in the space and draw a clear connection with broader climate action?

Commercialisation needed

Of all the conversations we had, those with traditional finance people were the most enlightening. The reality is that if you spend most of your time in the ReFi/Web3 world, you rarely get insights from the people that have been managing billions, if not trillions of dollars for decades. Say what you will about traditional finance but these insights are invaluable.

After the obligatory explanations of ReFi, regenerative economic theory, and blockchain's actual value, discussions often boiled down to a single question:

That all sounds great, but how do you commercialise a ReFi project to make it attractive to investors?

It's an existential debate for people in ReFi. Can commercialisation and real impact co-exist?

After hearing of at least one founder who turned down VC investment because of a demand for commercialisation, it got us thinking that there are two camps within ReFi. The first sees commercialisation as a necessity to scaling impact. They work closely with Web2 companies, act as a bridge between Web2 and Web3, and have no qualms about building business models that are more appealing to traditional investors.

The second camp values on-the-ground impact over everything else. They prefer raising smaller amounts through quadratic funding and other sources to iteratively and organically scale their operations.

There isn't a right answer, as far as we can tell. Where you fall likely depends on whether you believe meaningful climate impact can happen without institutional finance. What's important, however, is that we ensure the first camp continues to meet its impact goals and continue to support the second camp in its mission to make impact where its most needed.

Meeting fellow regens

The most rewarding part of the whole week was meeting the people we've become acquainted with on X.

The highlight was definitely the Blockchain x Climate event entitled The Promise of Blockchain: Catalytic Scale for Climate Finance. From the moment we walked in, there was a sense that everyone in the room was aligned to a single purpose. There was no relentless hustling, no bullshit. Just productive, collaborative conversations with everyone we spoke to.

Not to mention some great panels, including product presentations from Filecoin Green and Hedera, as well as a fireside chat with Kennedy N'gan'ga of Shamba Network on dMRV solutions in Africa and a panel on scaling climate finance featuring Meghan Edge of Ripple, Svenja Telle of Base Carbon, Shilpika Gautam of Opna, Hayley Mollar of Thallo, and Genevieve Leveille of AgriLedger.

Unfortunately, we weren't able to attend the ReFi cruise organised by @Terexitarius that brought together people from inside and outside the space.

Other perspectives on COP28 for ReFi

We've collected some comments from ReFi and ReFi-adjacent people. Will continue to update as more come in.

Looking forward to COP29 in Azerbaijan

As we look ahead to next year's COP, we believe that ReFi and the broader Web3 impact world needs to leverage its inherent collaborative power to present a united front. There is an awareness gap to fill, and we need to dedicate significant time and energy to it over the next year. It will take leadership, compromise, and hard work, but the result should be an industry that knows what it wants, where its going, and how to talk about it.

In the worlds of @solarpunkmaxi:

We at CARBON Copy hope to play a critical role in bridging the awareness gap, starting with a qualitative industry report scheduled for Q1 2024 followed by a cornerstone industry report for late 2024. Holler at us if you want to get on board.

Until next COP....

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