Analysis of Sādu’s NFTs on Carbon Emissions and Ecological Restoration
Every NFT released in the collection supports ecosystem restoration and conservation. 25% of every NFT sale is a direct source of funding for, SeaTrees, The Haiti Tree Project, and ReClimate. Additionally, royalties on secondary sales within the NFT marketplace are allocated to the ecosystem partners. The collection is being released on Polygon, a carbon neutral Layer 2 Ethereum network, and is available for sale on OpenSea.
This article will provide an analysis of each ecosystem partner and the technical infrastructure used to create an NFT. The objective is to provide a comparison between the work that can be achieved with funding from our NFT sales and the emissions associated with blockchain transactions. Over time, Sādu hopes to provide a more granular analysis on the emissions associated with every NFT.
If all NFTs in the Sādu collection is sold, a minimum of 11.2 ETH will go to every ecosystem partner. The first project to receive funding from Sādu’s collaboration is The Haiti Tree Project. The successful sale will result in the monitoring of 42,828 trees. Monitoring will be conducted to ensure sustainable agricultural practices and the reforestation of Haiti.
The next project ReClimate, based in Ukraine’s Rivne Region, pays farmers to implement regenerative agriculture. Their focus is on areas mono cropped for timber production. 11.2 ETH has the potential to ensure 13,000 trees are planted in order to restore the natural habitat of the region. These species include English oak, quince, spruce, alder, and aspen. Most inspiring, the work continues despite the war being fought within other parts of the country.
SeaTrees by Sustainable Surf, is another partner that will receive funding. The organization works closely with The Bay Foundation to restore Kelp forests off the coasts of California. 11.2 ETH can restore up to 5,000 square feet of kelp forests. Kelp not only creates wildlife habitats but also provides food for sea creatures. Additionally, ongoing research is proving that kelp forest can sequester up to 20 times the amount of carbon compared to a terrestrial forests.
Depending on where a forest is located, it has the potential to sequester approximately 10 Million MTCO2. This amount is equivalent to the yearly emissions of approximately two million vehicles (WRI). Other estimates say that a tree sequesters an average of 48 lbs per year once fully grown. Research varies widely depending on the methodology used to calculate carbon removal. Therefore, it becomes important to consider the positive externalities associated with reforesting, such as biodiversity, job creation, increased standards of living, and food security.
In addition to the work done by the ecosystem partners, the net positive environmental impact of Sādu’s NFT collection is a result of Polygon’s commitment to offset emissions. The following research provides information on the emissions associated with the Polygon blockchain and an overview of their carbon credit purchase.
As of June 21st, 2022, Polygon labels itself Carbon Neutral with the purchase of $400,000.00 USD worth of carbon credits. Polygon permanently retired, or in other words chose not to resell the credits, in order to the offset 104,794 tonnes of greenhouse gas emissions. The credits were purchased in the from blockchain based carbon market KlimaDAO. The official press release can be found here.
According to Polygon 90 Validators consume 0.00079TWh of energy yearly and 0.0009 GWh annually as of April 28th, 2021. This equates to GHG emissions amount to 122 passenger vehicles driven over one year and 67.3 home energy consumption for a year. Polygon’s research can be found here.
According to an analysis published by KlimaDAO on April 28th, 2021, the emissions related Ethereum bridging, which is necessary to transfer tokens from Ethereum to Polygon, consume 0.21 TWh of energy. Additionally, checkpointing, which ensures all transactions on the Polygon chain are recorded on Ethereum, uses 0.014 TWh of energy. The energy consumption results emissions equivalent to 80,966 mtCO2e. More information here.
In comparison, Ethereum’s Proof of Work consensus mechanism consumes as much energy as the 27th largest country on the planet, with anywhere between 35–140 TWh of energy used. Consensus mechanisms are algorithms that validate all blockchain transactions. Every network relies on one of these algorithms and some consume more energy than others.
The energy consumption of Ethereum is expected decrease by over 99% when the network shifts to a Proof-of-Stake(PoS) consensus. According to the Ethereum Foundation, this process, known as “The Merge,” is planned to take place at the end of 2022. The Merge will greatly reduce Polygon’s emissions tied to bridging and checkpointing on Ethereum.
Further research is needed in order to gain a complete view of the emissions associated with Sādu’s NFTs. In addition to blockchain transactions, NFTs often contain metadata. This information contains additional data like the images, and qualitative descriptions that are linked to an NFT.
The emissions from data centers like IPFS, which transfer and store metadata are currently unknown to Sādu. Additionally, the full scope of emissions associated with NFT marketplace OpenSea will result in better accounting. According to an article in the MIT Technology Review, all data centers, not just those associated with NFTs, account for 1.8% of all electricity use in the US and 0.5% of the country’s greenhouse-gas emissions. This information could include distributed data centers but is not verified.
In order for Sādu’s NFTs to have an exponentially positive impact on the environment, a clearly defined commitment to the use of carbon free energy must be made across web3, or all companies utilizing blockchain technology. The technical complexity of this commitment is high but nevertheless necessary. To get an idea of how this can be achieved, Google’s goal of running on for 24/7 carbon free energy is a potentially useful case study. While the company is not considered web3 at this point in time, the case study provides a framework of policy objectives for IT infrastructure.
Lastly, Sādu’s ability to leverage NFTs for environmental restoration will be bolstered by structural policy changes and the adoption of new technology. This includes, the energy transition towards renewables like solar, wind and modular reactors. The development of improved load balancing and battery storage. Continued investment into transmission, distribution, and micro grid technologies. Plus, incoming regulations that restrict the type of energy blockchain mining operations can consume. An early example of such regulation is New York State’s proposed moratorium. More information here. Sādu advocates for all aforementioned structural reforms in order to achieve the sustainable growth of web3 technology.
It is possible to claim that Sādu’s NFTs create a net negative carbon reduction. This is achieved by incorporating the carbon credit purchases of Polygon with the work of the ecosystem partners that receive funding from the sale of every NFT. However, this claim is not good enough to ensure adequate ecosystem conservation and restoration in response to climate change.
Sādu’s goal of turning living trees into digital assets that gain value over time in tandem with the energy transition, and The Merge, will result in a net negative reduction of carbon from the atmosphere. Given the multiplicity of milestones needed to achieve this goal our objective is to empirically measure the impact of our apps web3 stack along with every tree that backs an NFT to ensure a truly productive solution.