The problem of carbon offsetting through NFT

In the NFT field, which is attracting attention these days, the carbon problem is intensifying. Rather than cutting emissions head-on, it’s about buying carbon offsets, i.e. carbon rights. Digital art platform Nifty Gateway held a climate change-themed auction (#CarbonDrop) at the end of March. do.

Proceeds were donated to the Open Earth Foundation, a non-profit organization that uses blockchain to track climate change responsibility and emissions. A carbon offset was given to the artist to indemnify the estimated 500 tonnes of carbon emitted at the auction. This carbon offset does not reduce emissions, but offsets emissions through activities such as planting trees.

Also, according to the investigation, there is a possibility that the offset itself may be cancelled. Some of the farm projects opened in Brazil have seen a decrease in forest area, according to the survey. In addition, a forest secured for offset in Oregon, USA, was burned down in a fire, and carbon was released into the atmosphere.

However, the owner of Niftygate Gay also emphasized in a tweet about the auction that the project has made the NFT industry’s overall carbon figure negative. He also said that Nifty Gateway offsets 42 times the emissions, so the carbon figure is minus 42 times. It doesn’t mean anything by itself, but it certainly has an effect. What these carbon offsets mean is that they serve as a good excuse to slow the movement towards massive reductions in NFT platforms.

Wealthy buyers get the art, and non-profit environmental organizations get the money they need to fulfill their mission. However, depending on the auction method, there is a real risk that the big problem with the platform or technology that supports script art in general will become invisible.

According to several studies, carbon pollution by Nifty Gateway is the second most serious problem for NFT platforms. As a result of an artist’s analysis, it is said that by March 22 of this year, the carbon emission by Nifty Gateway was 13,170 tons, the second highest after Open Sea. The Ethereum blockchain used by Nifty Gateway is a platform that allows participants, including celebrities, to create tokens, and can do things like appraisal licenses for almost all entries, including digital art.

Ethereum is wasting a lot of energy because it uses computers all over the world for blockchain mining. This method is called PoW. Ethereum developers have been preparing for a way to reduce energy consumption by converting it to PoS and have been insisting on it for years, but implementation delays continue.

Carbon pollution cannot be solved by offsetting it. Offset may be necessary in fields such as cement production and aviation, where decarbonization is difficult. However, in order to prevent the worst impacts of the climate crisis, we must start now with the actions that are really necessary for decarbonization, including the NFT. Also, it is good for individual artists to do their best to offset this influence, but the reality is that systemic changes are needed, not individuals.

One expert points out that Nifty Gateway was able to fall into the trap created by the fossil fuel industry by deceiving the energy obtained in the existing way by offsetting the energy obtained in the conventional way, even though there are many methods that do not produce carbon pollution.

Of course, there is no need to blame the participating artists or buyers. Carbon offsets receive a lot of criticism for transparency and end-to-end validation, and offsetting itself isn’t going to solve the big problem. Moreover, this cannot be said to be a problem unique to individuals or NFTs. This is because the emission by NFT is only a fraction of the estimated 13.89 megatons of annual carbon emission of Ethereum.

There is also a debate about whether it would be better for artists to refrain from making works until this problem is resolved. Public opinion seeking to change policies or switch to a less-damaging script network for platforms using Ethereum can put pressure on them. Cryptocurrency operators could be pressured to withdraw from carbon-intensive currencies if they do not take steps to reduce the damage to the ecosystem. Ultimately, as with all issues related to the climate crisis, action by groups rather than individuals is becoming necessary. Related information can be found here.