The United Kingdom branch of the World Wildlife Fund—one of the world’s largest environmental charities—is launching a line of NFTs: tradable, blockchain-backed digital creations known as “non-fungible tokens,” the proceeds from which will go toward the conservation of 13 endangered species. WWF Germany previously released a collection of “Non-Fungible Animal” NFTs. “Just as NFTs are limited in their existence because they only exist in the number that the creator has written into the blockchain,” the group explains on its website, “some animal species are now also severely limited in their existence and therefore threatened with extinction.”
WWF’s entry into the cryptocurrency space raises a number of questions, including: “Why?” and, “Aren’t animals definitionally non-fungible?” It’s easy to skewer this as a shameless fundraising gimmick, because that’s exactly what it is. But it’s also part of a broader movement toward financializing nature and its protection: NFTs for conservation are the natural extension of a philosophy that suggests asset ownership can save the planet.
Environmental economists have long argued that assigning a more accurate value to greenhouse gas emissions—namely through various sorts of carbon pricing—will allow markets to better reflect their costs, sending a signal to companies and consumers to weed out planet-killing activities. In recent years that logic has created an enthusiasm among finance types for so-called “nature-based assets” that monetize the protection of endangered species and biodiversity, among other things. That’s included a push to assign prices to traditionally free ecological processes that maintain amenities like clean air and water, transforming them into “natural capital” so that markets can recognize their worth. In 2019, for instance, the International Monetary Fund estimated the value of a whale at $2 million, thanks to the amount of carbon dead whales capture.
Though they seldom talk about crypto, popular wisdom among policymakers in the United States and European Union now holds that enticing capital to much-needed climate investments means transforming them into return-generating assets. (For example: Investors will pour cash into a fancy new form of solar technology if there’s reason to believe it will prove profitable.) As a result, lawmakers have pursued policies that effectively socialize risk from climate-friendly investments with public money while allowing private companies to collect the profits. The result is transforming what might otherwise be public goods under democratic control into assets subject mainly to the whims of investors, a phenomenon economist Daniela Gabor calls the Wall Street Consensus. Among the biggest advocates for this approach has been State Department climate envoy John Kerry, who said at a World Economic Forum event with Bill Gates last month that “private sector investment and private sector discovery more than anything else” will “get us out of this hole.” As he neatly summarized at the Glasgow climate summit, COP26, “Blend the finance, derisk the investment, and create the capacity to have bankable deals. That’s doable for water, it’s doable for electricity, it’s doable for transportation.”
Kerry isn’t alone in this approach. The same day WWF U.K. announced its NFT drop, the EU dropped a draft of its “sustainable finance taxonomy,” some of the first government-sanctioned guideposts around what does and doesn’t qualify under the broad and increasingly profitable umbrella of environmental, social, and governance, or ESG, investments. The taxonomy will serve a dual function: to offer a rulebook for what’s “sustainable” and what’s not and, in doing so, tell investors eager to cash in on a booming ESG market where they can park their cash to reap financial and reputational benefits. If that last bit sounds too cynical, then consider the most telling detail in this new taxonomy: It won’t include any constraints on investments in greenhouse gas–intensive activities. Methane gas projects, in fact, are set to qualify for the EU’s green label, over protests from climate campaigners and member states Spain, Austria, Denmark, the Netherlands, Sweden, and Luxembourg.
WWF’s NFTs, ridiculous as they seem, only distill the mainstream fixation on asset-ownership-as-climate-policy into a conveniently heinous package. Is it any more strange to think buying an ugly picture of an Amur leopard cub will save said leopards than to turn tree-planting into a tradable commodity or entice private investors to finance seawalls by making them “bankable” projects that generate steady returns?
The specifics of the WWF case aren’t reassuring. The project is apparently being built on Polygon, an “environmentally friendly” blockchain, which WWF says qualifies its NFTs as “green.” Cryptocurrency experts are skeptical. Polygon is a dependent side-chain of Ethereum, which—though it’s pledging to move to more energy efficient techniques—now has a carbon footprint bigger than Sweden, thanks to its use of extremely energy-intensive “proof of work” currency mining, requiring massive amounts of computing power and (thus) electricity. Catherine Flick, of the Center for Computing and Social Responsibility at the U.K.’s De Montfort University, told Sky News that, “I don’t know of any fully environmentally or climate-friendly mainstream NFT implementations that are trustworthy.”
Even if you were to take WWF and Polygon’s “eco-friendly” claims at face value, there’s still the question of what exactly the proceeds from these sales are funding. With a net income of $170 million in 2020, WWF isn’t exactly strapped for cash. And in recent years, WWF’s conservation practices have come under major scrutiny for purported involvement in what environmental and Indigenous rights groups claim to be rampant human rights abuses. In Colombia, for instance, WWF partnered with Smurfit Kappa—a European packing company—on an industrial tree-planting carbon-offset project that advocates argue has violently evicted the Misak, Nasa, and other Indigenous peoples from their land. A lengthy 2019 investigation from Buzzfeed alleged that WWF provided cash, weapons, and high-tech equipment to brutal paramilitaries to ward off poachers in Nepal, who used deadly torture methods to do so. The reporting led to a congressional hearing last October. WWF has denied connections to the misconduct.
This isn’t the first time that cryptocurrency has been dubiously posited as an environmental savior, either. In 2018, Bath Spa University researcher Sian Sullivan described the Natural Asset Exchange seeking to leverage the blockchain platform Ethereum to cash in on what its supporters claim to be a $120 trillion market for “untapped natural capital” via “EARTH tokens,” to be purchased with the crytocurrency ether. As Climate Home News’s Chloé Farand reported this week, a U.K.-based cryptocurrency venture called Save Planet Earth has sold 1,000 “limited edition carbon credits” as NFTs, including one—worth a single ton of carbon dioxide—that sold for $70,000.
Ostensibly the increasing value of Save Planet Earth would be linked to increasing returns for the planet. In reality, its promises to plant more than a billion trees across Sri Lanka, Pakistan, and the Maldives appear wildly overhyped; of the up to 27,000 SPE has planted so far, none have been used to generate actual carbon credits, Farand reports. Even without the kinds of “tokenization” Save Planet Earth and other crypto entrepreneurs are pushing, verifying the quality of carbon credits can be extraordinarily difficult.
It’s almost as though creating new asset classes subject to volatile, speculative markets is a bad way to reduce carbon emissions. WWF U.K., meanwhile, appears to have more drops planned.