In the most literal sense, FTX doesn’t have direct impacts on climate change at a globally relevant scale. We have no factories or global shipping, we have no supply chain or physical products, and we rent a few small offices spread out around the world and operate online.
However, we do operate in the crypto industry, in which large amounts of energy are used to mine major chains. We understand the reasons behind this and the benefits that Bitcoin, for example, offers the world. But the energy used to secure the Bitcoin network and the cost to the environment can be decoupled, and we’re excited for a future in which mining can be powered from better sources with no cost to security
Our program was started after a twitter thread from Sam: [link] and later updated by the FTX account [link].
Both for the direct good it does, and to help establish precedent for other exchanges and business in crypto, we are deciding to go carbon neutral with consideration of energy used in mining.
Estimating this is nontrivial: mining is decentralised; no one knows exactly how much energy is coming from each type of source; there doesn’t exist a principled system for attributing ownership of mining related pollution to a company that sends withdrawals, and even if everything was perfectly known, the crypto ecosystem is dynamic and the picture may change dramatically month-to-month.
Our current estimates suggest that it will cost one million dollars to take ownership of our portion of the environmental costs of mining. We have done this: we have purchased a total of 100,000 tons of carbon offsets though two providers for of $1,016,000.
The two providers we have chosen are:
We have purchased 7000 VER certified carbon credits from BurnStoves. Toxic chemicals being breathed in while cooking contributes to 2.3 million deaths annually, most often from the poorest households and the women and children in those households. We were excited to find that BurnStoves offers a great solution to this, cheap cooking stoves popular in many African countries where this issue is the worst, and they have recently started offering carbon credits to help them scale and reduce the selling price for their stoves.
Unfortunately they only had 7000 credits left at the time of purchase, but we recommend looking into BurnStoves and following along as their program expands.
You can learn more about energy poverty and the impacts of indoor cooking in this twitter thread by Max from Our World In Data, or reading their full article: here
You can learn more about BurnStoves on their website here and a research report from Giving Green on them here
We have purchased 93,000 carbon credits from Pachama. Specifically we purchased:
23,000 carbon credits from the Kootznoowoo project in Alaska. We chose this because we believe there is value in preserving the amazing old growth forests in this region, helping to protect the habitat for the animals that live there, and have the money go to the indigenous community that owns this forest.
10,000 carbon credits for the Nicaforest project in Nicaragua. We wanted to include a reforestation project as part of this program and are excited to see that part of the funding went towards the local economy by hiring local employees to carry out the reforestation. From a carbon perspective we aren’t fully confident that the six times multiple on cost for reforestation is justified so this is the smallest of the 3 forestry based offset projects.
60,000 carbon credits for the Baja Clima project in Colombia. This is an area with extreme biodiversity and funding this project will help protect a significant amount of this forest and support the council of local landowners who oversee the execution of this project. We have completed our payment to Pachama and when these credits are formally retired over the next two weeks you can see more by going to: https://pachama.com/impact/ftx
Current thoughts on this area:
We view carbon offsets as a promise, and when investigating how to meet our needs we were interested in finding projects where our money could help make long term changes as well as fund these shorter term carbon offsets. BurnStoves is exciting to us because the money we paid will help them expand and offer stoves at more affordable rates. Please see the articles mentioned at the beginning for details but we hope that our small amount of funding here can play a role in the reduction of health issues from indoor cooking and the economic savings for those that need it the most.
When looking for forestry based offsets we chose Pachama because we believe there are issues in how the current forestry based offset market operates and hope Pachama can be part of the solution. Pachama stood out because they openly address many of the current issues and they are developing monitoring technology to help increase confidence in the offset space.
The total we have spent on these two projects is $1,016,000 USD to purchase a total of 100,000 tons of carbon offsets.
We would also like to give a notable mention to TradeWater as another option you should consider when looking into the carbon offset space. Unfortunately the timing didn't work out at this stage but the disposal of refrigerants and toxic materials in general is a growing issue that needs to be solved.