Regenerative Finance (ReFi), which connects cryptocurrencies with climate action and aligns incentives to empower millions of individuals to take climate action, is swiftly establishing itself as a prominent player in innovative climate funding. Anyone can participate in meaningful activities and earn money for them with just a few mouse clicks. Menthol Protocol is one business that is taking this idea to the next step. It is creating a blockchain-based dApp that will assist in automating the offsetting of carbon credits and achieving climate-positive goals.
The State of Climate Action 2021 study advocates for a "near doubling of the pace of action" in order to meet our 2030 goal of halving current emissions. According to it, $5 trillion in yearly climate finance is required to meet our 2030 emissions targets. ReFi is an economic advancement in technology and attitude that can support the necessary rapid scaling of climate action. ReFi alters the underlying narrative that supports our existing economic model to use money as a tool to address fundamental issues.
ReFi is grounded in regenerative economics, a new philosophical model that calls for economic-system design to be based on "the universal patterns and principles the universe uses to build stable, healthy, and sustainable systems". The CEO of Earthbanc, Tom Duncan, created a straightforward explanation of how the company would operate in 2017 based on the fundamental ideas that make up regenerative economics.
Regenerative means making up for all negative externalities and more. Being economically regenerative means that every activity that degrades ecological, human, and community health in the economy calls for a stronger activity that not only makes up for the extraction but also results in a net improvement in those biophysical parameters.
Negative externalities were historically only made up for if a government taxed them and then redistributed the money to make up for what was taken or degraded. Unfortunately, only a few nations have adopted this notion, and our economic system generally assumes that negative externalities will be borne by the rest of the world, resulting in diffuse catastrophes like climate change that affect people locally and worldwide.
Earth Overshoot Day, the annual calendar day when humanity's resource use exceeds what the planet can renew in that same year, is one of the tragedies of our time because rates of extraction significantly surpass regeneration, especially in reference to the exponentially rising technology commons.
A circular economy that substitutes our current linear "take-make-waste" system is mapped out by regenerative economics. A circular economy is a comprehensive strategy for economic growth that aims to benefit people, the environment, and businesses while preserving the planet's resources. It is intended to eventually divorce growth from the use of scarce resources because it is regenerative by design. Similar to our current economy, a circular economy is driven by shared perceived value, which means that
The goal of the ReFi movement is to enable positive change, with financial gain coming as a byproduct. Money is reduced to a tool rather than an end. Our existing economic system has incentives that are primarily designed to maximize profits while socializing negative effects.
ReFi shifts the incentives away from profit maximization and toward the maximization of positive externalities for activities that repair, regenerate, and heal while also enabling capital to reach the communities most impacted by negative externalities to adapt, mitigate, and prosper.
The third development of the internet, known as Web3, is defined by blockchain technology, which makes it possible to use virtual currency. This type of financing deviates from the traditional concept of money. Regenerative finance employs incentives produced by newly developed marketplaces that are supported by new web-3 regenerative finance infrastructure. AI, satellite, and remote sensing data processing with programmable blockchain modules and distributed computing power