A Catalyst Fund7 proposal: The Cardano Carbon Footprint

Blockchains use energy and have a carbon footprint. Cardano is a low energy consuming blockchain, due to its Proof of Stake protocol. It uses about 10.000x less energy per transaction than Bitcoin. (Ref) However, it still uses energy and a lot of other resources that cause carbon emissions.

SHIFT Pool, as part of the Climate Neutral Cardano group, have been doing some initial carbon footprint estimations and at the same time we have been partnering with the Cardano Foundation and Veritree to bring you the #CardanoForest that is currently being planted in Kenya and will continue to capture carbon for many decades to come.

However, while we were working on these projects, we noticed how important it is to know and how difficult it is to determine the Cardano Carbon Footprint.

Therefore, we have been applying for funding through the Cardano Catalyst Fund 7 in order to solve this question and develop a first independently verified Cardano Carbon Footprint Methodology with expert help.

The full proposal is available below and currently (December 2021) going through the assessment stage on ideascale for you to comment and interact: https://cardano.ideascale.com/a/dtd/The-Cardano-Carbon-Footprint/385045-48088

Full proposal:

The Cardano Carbon Footprint Proposal, Catalyst Fund 7

Problem statement :

We want to make Cardano carbon neutral and climate positive. If we know Cardano’s carbon footprint, we can make the shift to positive.

Describe your solution to the problem

A Cardano greenhouse gas accounting standard verified by independent specialists, the Cardano Foundation, SPOs and delegators.

Relevant experience

We are climate scientists, environmental and computer engineers who run several stake pools and help organise ClimateNeutralCardano.org

https://www.climateneutralcardano.org/

Detailed plan – Fill in here any additional details

Introduction and impact

Blockchain has a chance to replace many massively wasteful financial processes with a decentralised, permissionless and democratic infrastructure for digital money, exchange and smart contracts. This is driving phenomenal growth, and that growth creates both a danger and an opportunity. The danger is that proof-of-work mining has huge energy costs and a negative climate impact. The opportunity is that a proof-of-stake chain with built-in community-controlled treasury and cheap smart contracts can actually swing the balance the other way and make the technology climate positive. We think Cardano is positioned to make this shift; this project will show how to take the next step in the process.

In addition to the positive environmental impact the project will draw the significant numbers of people who are interested in the environment towards Cardano. By showing exactly how much environmental cost Cardano has, and how it is moving towards being climate positive, we will attract a new layer of people to our ecosystem.

All human activities have an impact on the climate. A few of them are beneficial: tending forests, planting trees, sustaining natural ecosystems. To make Cardano climate positive we must first measure its negative impacts (the cost of running stake pool servers, or of heating the house of a plutus developer, for example). Then when we invest in projects that have positive impacts we will be able to build a transparent strategy to get us to zero carbon and beyond. When the balance swings beyond neutral then we’re beginning to contribute to a safer future for us, our children and the whole Cardano Community.

We have done an initial carbon footprint calculation for the impact of electricity consumption of Cardano stake pools (https://www.climateneutralcardano.org/offset-calculation/). This has already provided an idea of scale and positive impact for projects like the Cardano Forest (https://ito.veritree.com/).

Challenge

While doing the initial carbon calculations we have learned that there is no methodology or clear scope to determine the impact of Cardano’s decentralised ecosystem. It is unclear which institutions need to be included, or how much of their activities are dedicated to Cardano. How much of the personal carbon footprint of a Stake Pool Operator (SPO) should be associated to Cardano, for example? How do we verify the real contribution of carbon offsetting projects? (Just counting the number of trees we plant is misleading: it needs to be the right trees, in the right place, involving the right people for the right reasons, or else carbon drawdown may not happen or may even go into reverse!)

Action Plan and Outcomes

We have commissioned ‘My Carbon Zero’ (www.mycarbonzero.org), a project of The Pond Foundation (www.thepondfoundation.org), as an independent expert partner organisation that can help us answer these questions. Together we will determine a solid methodology of carbon accounting for our community which is transparent and can be used continuously while Cardano grows. We will work to collect and estimate the required information from our community and create a live model of our impact.

Deliverables:

  1. A parametric model of Cardano’s climate impact. For example, the number of Cardano stake pools varies over time (partly due to configuration choices such as the saturation point of a pool). The amount of computation that those pools need to perform when minting new blocks on the chain also varies, and will increase over time due to the impact of smart contracts and Plutus on-chain programming. Therefore our model of the impact of the ecosystem as a whole has to include both parameters that can be adjusted as the story unfolds, and the ability to dynamically regenerate the impact figures in order to model alternate futures and to describe the current state at any particular point in time.
  2. Community-specific data harvesting and analytics tools. Different actors in the Cardano ecosystem make impacts in different ways: think of the difference between IO Group or Emurgo and a single SPO, for example. We need specific mechanisms for entering and estimating impact data and for analysing diverse data sources (some of which will be precise and reliable but others of which will be partial and unreliable and will need to be estimated via sampling). These tools need to be able to continuously feed updates into the model as the ecosystem evolves.
  3. Model visualisation and promotion. When we have the live data streaming into our impact model, we will provide visualisations and summaries of the data. We will then promote the data throughout our community (using our links with key actors such as the Cardano Foundation, Veritree, individual SPOs and SPO groupings). In each case we will produce guide material for the community to show how each element can achieve carbon neutrality and then move beyond neutrality into the climate positive blockchain space that we hope Cardano can come to occupy.

KPIs and audit:

What will success look like? How will we measure progress? The ultimate prize is the rise of climate positive blockchain technology in all its forms, and an irreversible shift away from both wasteful proof-of-work and wasteful Big Finance. Key indicators for the (small, initial) steps of this project will be:

  • Connection. A running estimate of our engagement with all the Cardano ecosystems categories of actors.
  • Scope. Summary of the coverage of the impact model across the different types of impact that we’re making, and across the different commonly accepted impact scopes as used by the Greenhouse Gas Protocol (https://ghgprotocol.org/).
  • Trend. Is Cardano’s climate impact rising or falling? To what extent are compensation projects (e.g. tree planting) contributing verifiable impact reduction? How far have we got to go and how fast are we getting there?

(For scheduling specifics see next section; public launch will be 6 months from start.)

Transparency and audit: we work best i nthe open, and all output from the project will be pushed to a public GitLab repository, and all work will be conducted in the open with public backlog/sprint/done lists on GitLab boards. Our carbon accounting partner and our outcomes will both support industry standard carbon accounting audit. Our team covers all the software engineering (20 years open source experience), cardano community and carbon accounting skills we need.

Cardano’s social mission makes it the ideal vehicle to combine climate action with blockchain and cryptocurrency technology. This project will spread that message and will initiate development of the toolbox that climate NGOs, SPOs and the Cardano Foundation will use to tip the balance from negative, through neutral and into positive.

Beyond this, we believe that Cardano is making a step towards a world where new mechanisms of decentralised cooperation and consensus can start to replace the cheap-at-all-costs and business-as-usual structures that are degrading the world we live in. There’s a lot to play for! Join us?

Timeline

We will use an agile development approach, iterating over four activities:

  1. Stakeholder network building. We already support a network of key stakeholders in Cardano community climate impact accounting, including SPOs, the Cardano Foundation and stake pool delegators. Activity 1. will extend this network and reinforce its interconnections, giving the project live input from the community on impacts and feeding back and trialling project results in practice.
  2. Carbon accounting method adaption. With our specialist partner we will adapt established accounting methods to the new context of decentralised and permissionless blockchain technology. We will also incorporate the surveys of other blockchain accounting activities to ensure comparability between Cardano and other leading chains.
  3. Live data modelling and analytics. For each key actor category (e.g. SPO, Foundation, core developers like IOG or Emurgo, Plutus developers and startups, ₳DA delegators, the Catalyst community) we will provide a live impact modelling capability, with dynamic results aggregation and data analytics.
  4. Cardano footprint disemination. Publication, advocacy etc.: as well as the headline figures on footprinting (which we expect to give a good indication of both how much Cardano’s staking wins over yesterday’s proof of work mining and how a decentralised financial infrastructure can win over today’s banking) there will be breakdowns of the impact by ecosystem actor categories, and we will promote the model and to each of these categories. We will also provide guidance for actor-specific remediation based on the model.

We plan for between 4 and 6 iterations over the project lifetime (depending on the speed with which we collect the data we need and allowing for unexpected obstacles and risk management). We aim to publish results continuously and make major milestone deliveries every 3 months. We will complete all the main milestones within a 6 month period. By 12 months we should have a self-sustaining footprinting culture in place within the community, and be well on the way to a carbon positive blockchain!

About us

The proposal is submitted as a joint project of pools of the Climate Neutral Cardano Stakepool Operator group (https://climateneutralcardano.org). The applicants are Stefan Rehfus, environmental engineer and SPO of CO2POOL, and Dr. Christian Unger (environmental scientist) and Prof. Hamish Cunningham (computer scientist and software engineer), both SPOs of SHIFT Pool. We are committed to a climate neutral Cardano Blockchain and have been collaborating with the Cardano Foundation and Veritree on the project of the Cardano Forest to plant one million trees (https://ito.veritree.com/).

Budget

The budget breakdown mirrors the action plan. Our costs cover three activity streams:

  • Modelling. Our professional impact assessment partner requires resourcing to adapt climate accounting methods to Cardano and to help us codify the method in a live-update model.
  • Harvesting. We require resources to reinforce and extend our existing networks within the community and set up live streams of both hard and soft data sources.
  • Promotion. Lastly we require resources to feed the model and visualisations back to the community, and to assess the results in order to feed back into the next development iteration.

We have estimated the costs of these three activity streams (essentially labour time of the scientists, engineers and modellers in the project team) based on what we believe to be realistic for a project of this type. Financial details available in the proposal on Ideascale.

Sustainable Development Goals (SDGs)

Cardano is focused on social, economic and environmental issues and this proposal specifically tries to address two of the UN Sustainable Development Goals.

SDG 7: Affordable and clean energy

SDG 13: Climate Action

Knowing the Cardano Carbon Footprint will better identify our impacts and enable the appropriate climate actions. This will also encourage the use of clean renewable energy and spread awareness with blockchain users around the world.

For more information on SDGs the Cardano Community has developed a specific SDG tool that helps you to link your Catalyst proposal to these goals: https://cardanocataly.st/proposer-tool-sdg/#/

Note: We also participate in and support the proposal on ‘A world map of green Cardano’ in F7: Global Sustainable Indep. SPO’s: https://cardano.ideascale.com/a/dtd/A-world-map-of-green-Cardano/384960-48088

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