Carbonbase CEO on Launching a Digital Carbon Registry

The next project we'll be chatting about is a climate change startup that's using Blockchain technology and teaming up with the HR Foundation and impact X to launch a digitally native carbon registry. Joining us now to discuss is carbon based Ceo Max. So Max, welcome to the show. Thank you so much. It's a pleasure to be here. All right, before we dive into your project, let's take a little bit of a step back. Uh summarize the goals, the mission of carbon base and while you're at it, maybe tell us about the core challenge that you're trying to solve here. Thank you so much. So as we all see, you know, climate change is kind of at our doorstep, it's gone from something that's very abstract into something that is going to impact all of our daily lives. In fact, it's impacting our summer right now. So at carbon base, we've decided to take on this challenge by marrying the incredible tools of infrastructure and digital technology with a Blockchain to address climate change in a fundamental way and the way we do that is actually by designing an unchain carbon registry. So for those of you guys who have never heard about this concept before. A carbon reg is kind of like a central bank for carbon credits. It's the entity that has the permission and the ability to actually create carbon credits, which are then economically valuable to stakeholders. In fact, Microsoft Disney Stripe Apple all spend millions of dollars every year buying and purchasing these credits. So the metaphor I want to make here for our viewers is that the carbon market seems a little bit like the Bitcoin market in the sense that people around the world in decentralized fashion are actually actively working on carbon mitigation today. And through the carbon registry ecosystem, they have a way to receive economic value for that and also to earn a living and also to build a family and also to um you know, sort of grow their own economy and this market has grown tremendously in the last 10 years from a very small toy example into now billions of dollars. And according to Mark Carney, the former Central Bank of England and also mckinsey, this market is going to grow to about $100 billion in the next 5 to 6 years. Where did the carbon credits come from? It's a good question. What carbon credits mean in this context is actually the effort that people have done to put carbon into the ground. So to use a very uh simple metaphor, if we have a giant machine that captures carbon credits we can actually um record, let's say, putting five tons in the ground and in return, receiving five carbon credits. And in order to receive these credits into our registry account, we actually have to prove that we have actually done this thing. So there's a lot of verification, a lot of sort of data uh drive that actually makes this possible. Um And our key innovation is that, you know, similar to what we heard earlier today about real world assets, carbon actually is a digital native asset. In fact, I would argue it's one of the most exciting digital native assets because it is globally tradable. It's not a security, it's a digital commodity and it is recognized by fortune 500 companies. It actually has real touch points for the real life economy. So this I think is gonna unlock a very interesting new chapter of real world assets, you know, climate change, finance and also the web three ecosystem. Uh I, I want to ask about the about but before I do, uh what, what Blockchain are you using? Is it a, is it a proof of work or proof of state Blockchain are using those? We are using Hadera. And we're very excited to be partnering closely with Hera, partly because they have an incredible enterprise ecosystem, right? They have almost 30 fortune 500 size companies actively participating and running the nodes that hold up the uh had Blockchain. Um And we've actually had a chance to meet some of the council members, we spoke together um on Davos stages earlier this year. Um And we believe that this is kind of the alignment of interest from the corporate sustainability um concern of a fortune farming company and also their innovation arm trying to find, you know, meaningful use case for this new web three infrastructure and, and you deal primarily with carbon credit. So like S Rex, which uh we have a lot in uh the beautiful garden state, New Jersey, uh solar solar uh credits. Here, you guys are not trading in SRE, right? You're just dealing with no, actually our uh our joint effort is called Global Climate Registry. And so the idea is that we will deal with carbon, we will deal with energy, we will deal with water and ocean related credits and also with social development uh credits. So the idea is actually that all of the facets of the climate infrastructure, the climate asset class, we will be able to interact and uh participate solar for sure. Yeah, Max, what's your stance on the debate over Bitcoin's environmental impact? So I was uh previously uh a co-founder of a sustainability standard for Bitcoin. I spent about two years looking into this. Um And my belief is that uh Bitcoin like data centers uses a lot of power. The choice of actually how do we, you know, sort of address this is actually fundamentally at the power sector. How do we get the miners to be willing to actually use and prove that they're using renewable energy at the mining level that would actually solve a lot of the problems associated with Bitcoin's negative energy profile. And quickly before we go, I know that this, you're focusing on the Asia Pacific region. Why focus there first? So we find that, you know, the Asia region is responsible for more than 50% of the climate change um footprint and specifically in Hong Kong, there's a really interesting intersection of the old economy and also now the government taking a very proactive stance on web three. So we sort of see this confluence of two factors. You know, I was a Schwarzman scholar, I studied at Tsinghua, I wrote my master's thesis on us China and Green finance and public policy. And my thesis conclusion is that if and when Asia Pacific takes a leadership position on climate change, we will really see proactive kind of large scale uh deployment. Uh And I think we're just at the beginning of that afternoon, that's a big if and when, because it doesn't seem that the the government here uh particularly care China particularly cares about uh carbon emissions at least yet. And it doesn't seem like there will be any chance for that to happen soon. Given uh you know, I guess anybody who says anything that's not necessarily in line with government um doesn't necessarily have a voice in, in policy. Uh Apparently. Um so what, you know, like, uh what would it take? I mean, like, you know, we, if you chart global emissions of carbon against the growth of uh of industry in China, it's, it's a, it's a, you know, it, it's, it's a, uh it's a parallel line. I mean, they, they go right together, what would it take for the Chinese government to say, you know what, this is probably an issue. We should probably get into the business of carbon credits uh on a on a serious scale. So that's a fantastic question. And this is kind of the thesis I wrote about uh I would say three things here. First. Um you know, the president of China President Xi has actually declared China's ambitious carbon neutrality goal. Uh it's called 30 60. So carbon peaking by 2030 carbon neutrality by 2060. And that's a really radical statement, right? Just to kind of interpret that for a second, China today alone accounts for 27% of global emissions to be able to say that the entire 27% is going to go to zero in about 20 something years, is pretty uh dramatic. Second is China has actually launched a national wide carbon compliance market, similar to the ones launched in California uh in northern New England and also in Continental Europe. And it's putting a very strict and enforceable kind of legal price on carbon for heavy emission industries. So today there's already people who have to wake up every morning, paying an extra carbon tax on their pollution from coal and from steel. And the third, I think the most final one is actually China. Today is 20 is about 70% of global wind and solar energy production. So even though there is still a lot of emission activity happening right now, they're spending a lot of money trying to develop new technology stack. And we in Hong Kong have this interesting back balancing act, right? Where when I sort of really want to face the rest of the world, I want to sort of help a lot of countries and companies in South America and Africa, Southeast Asia get recognition for their climate work and actually be able to receive economic rewards for that. And at the same time, we want to sort of find the right way to deal with China. All right, Max, thanks so much for joining us this morning. We're gonna have to leave it there. Thank you guys. That was carbon based Ceo Max Song.