Approach
OVERVIEW
BLUE CARBON’s approach is driven by the enormous gravity, accelerated timeframe, and serious consequences that global warming and climate change pose to society and the planet. This approach positions the ocean as a crucial opportunity to provide solutions to meet this tremendous global challenge. BLUE CARBON’s strategy is further refined and buttressed by an alignment with the prevailing global shifts and trends in technology, business, capital markets, economies, and civil society.
Climate change poses one of the greatest risks to the survival of the human species. Leading climate scientists and the UN’s Intergovernmental Panel on Climate Change (IPCC) have warned that there is less than a decade for global warming to be kept to a maximum of 1.5˚ C, beyond which even half a degree will significantly worsen the risks of drought, floods, storms, extreme heat, and poverty for hundreds of millions of people. Increased greenhouse gas (GHG) emissions, driven in large part by human activity, have strengthened the greenhouse effect and contributed to climate change, threatening ecosystems biodiversity, economies, and human livelihood. It is imperative to utilize all the tools available to reduce GHG emissions from the atmosphere and accelerate the pathway to reach Net-Zero.
BLUE CARBON believes strongly that technology and nature-based solutions that target the oceans present the best opportunity to generate the highest impact within this narrowing window of time. The main drivers of this opportunity are the ocean’s vital role in the earth’s carbon cycle, high capacity for carbon sequestration, and predisposition for carbon removal rather than avoidance. Finally, ocean solutions provide co-benefits that are linked to many SDG goals, such as biodiversity conservation, food security, economic growth, and socio-cultural benefits for local populations.
BLUE CARBON offers a timely and differentiated stakeholder strategy to fight climate change and achieve Net-Zero that Focuses on voluntary carbon markets and blue carbon credits; Builds an innovative “phygital” platform business model and strategic partnership network; Connects all stakeholders through unique user experiences and smart technologies; Positions high-impact R&D ocean research projects and pre-seed ocean deep tech startups; Markets a “Flagship” product and integrated programs and services; Amplifies scale and impact through a foundational strategic partnership’ integration within a larger global innovation platform and youth; and Leads humanity towards sustainability and a human-centered society.
IMPACT INVESTING & VENTURE PHILANTHROPY
BLUE CARBON’s strategy is congruent with the emergence and growth of impact investing over the past decade in the financial industry. Impact investors have a dual objective to pursue both financial returns and a social or environmental impact. Within the financial industry, the two key groups that have been driving this shift towards impact investing are venture capital and institutional investment. As well, foundations and charities are increasingly investing in companies that deliver social and environmental impact. These players are looking for returns on investments, as an alternative to traditional grants or donations. This new model falls under the umbrella category known as venture philanthropy.
CORPORATE & INDIVIDUAL SOCIAL RESPONSIBILITY
BLUE CARBON’s approach is aligned with the growing importance for businesses and individuals to ramp up their focus on social responsibility. Research has shown that companies with effective Corporate Social Responsibility (CSR) and Environment, Social, and Governance (ESG) programs are more profitable. Consumers and other stakeholders are placing increasing pressure and scrutiny on companies to see social good as a necessity, not just a marketing strategy. This demand is evidenced by the statistics, 96% of S&P 500 firms published CSR reports in 2022, relative to 20% in 2011. Individual social responsibility is also taking hold as a parallel evolution as citizens become more aware of their own personal carbon footprint and direct impact on the environment and other societal issues.
FOCUS
BLUE CARBON’s strategy focuses on carbon markets as the fundamental transitional tool to achieve scale and impact rapidly by deploying capital to incentivize actions to avoid, reduce, and remove carbon emissions in the most efficient manner. Briefly, carbon markets are trading systems in which carbon credits are sold and bought. One tradable carbon credit equals one ton of carbon dioxide or the equivalent amount of a different greenhouse gas reduced, sequestered, or avoided. There are broadly two types of carbon markets: compliance and voluntary. Compliance markets are created by national, regional, or international policy or regulatory requirements. Voluntary carbon markets, national and international, refer to the issuance, buying and selling of carbon credits, on a voluntary basis.
The current supply of voluntary carbon credits comes mostly from private entities, NGOs, and governments that develop projects certified by carbon standards that generate emission reductions and/or removals. Demand comes from corporations with corporate sustainability targets, private individuals that want to compensate for their carbon footprints, and other actors aiming to trade credits at higher prices to make a profit. While not a silver bullet, BLUE CARBON believes that scaling voluntary carbon markets can dramatically accelerate the timeframe to achieve Net-Zero.
BLUE CARBON CREDITS
Blue carbon credits are in their infancy but are quickly gaining popularity and attention. Very recently announced projects supported by high profile companies such as Apple, Proctor & Gamble, and Salesforce have helped to create momentum and a premium price over terrestrial carbon credits ($7/ton vs $15-20/ton). As far as the big three criteria that define the quality of carbon credits, permanence, additionality, and leakage, blue carbon outperforms their terrestrial counterparts in all of them. Blue carbon sinks offer longer permanence because they are less susceptible to wildfire and lower natural decomposition rates. Co-benefits tied directly to SDG goals provide additionality. Finally, there is very little leakage as they are less attractive to logging and lumber commercial activities.
VOLUNTARY CARBON MARKETS
BLUE CARBON’s approach focuses on the emerging voluntary carbon markets (VCMs). Reportedly reaching approximately $2 billion (USD) in 2022, VCMs are poised for rapid growth. Their value is expected to grow to between $40 and $50 billion (USD) annually by 2030. In recognition of the vital role that voluntary carbon markets play in the global effort to achieve Net-Zero by 2030, the Taskforce on Scaling Voluntary Carbon Markets (TSVCM) was initiated by Mark Carney, UN Special Envoy for Climate Action and Finance, in September 2020. TSVCM is comprised of over 250 member institutions that represent buyers and sellers of carbon credits, standard setters, the financial sector, market infrastructure providers, civil society, international organizations, and academics.
BUILD
The foundation of BLUE CARBON’s strategy rests on establishing the pillars of an innovative platform business model and the build-up of a multi-stakeholder community. These pillars are congruent with BLUE CARBON’s focus on accelerating the timeframe of scale and impact. Also, the timing of this approach coincides with the emergence and dominance of the vanguard firms of the 21st Century, not just Uber but also Amazon, Google, Facebook. These players represent a new type of platform-based business model that builds on developments of the 80s and 90s but combines them with new features. Whereas the previous linear “network of contracts” (NOC) model centered largely on price-based competition amongst producers of relatively similar products, today’s platform firms are built on connected networks that represent a new way to create and capture value.
Regardless of the type of platform business model, all are based on mobilizing human beings to contribute. Platform business models create value by facilitating interactions among many participants. A key advantage of this collaboration is the platform’s speed, flexibility, and scalability. Above all, it is the platform business model’s capacity to extract and harness immense amounts of data that allows them to operate as critical intermediaries and market makers. The ability of the platform owners to translate this capacity into value depends on their understanding of their ecosystem and their ability to coordinate the value-creation mechanisms within that ecosystem. By providing affordances and facilitating transactions, successful platforms become a breeding ground for innovation. This is particularly true for pioneering research activities and development of novel deep technologies.
STRATEGIC PARTNERSHIP NETWORK
The build-up of BLUE CARBON’s phygital platform relies heavily on a network of research, technology, supply chain, mentoring, integration, public policy, non-profit, corporate, marketing, and financial strategic partnerships. In addition to the skills, competencies, and resources these strategic partners bring to help build BLUE CARBON’s innovative physical and digital platform, their accompanying affiliated networks are equally as important in the scaling of BLUE CARBON’s community build-up process. BLUE CARBON’s approach regarding the management of its strategic partnerships is one where the venture’s “Flagship” product will be tightly managed in-house, while most of the integrated program and services’ operations will be administered by leading organizations in their respective fields, industries, and markets.
PHYGITAL PLATFORM BUSINESS MODEL
BLUE CARBON’s business model is centered on an integrated “phygital” platform that incorporates the five (5) main types of business platforms; (1) innovation or technology; (2) service or application; (3) social; (4) aggregation; and (5) transaction. Phygital refers to the bending of physical and digital elements in the user experience. While much of our lives have become more digital in nature, we still live in the real world. The physical-digital combination bridges the gap between the online and in-person user experiences across a wide range of environments and contexts. BLUE CARBON plans to intertwine its phygital business model through its “Flagship” product and integrated programs and services to create a more immersive user experience and a deeper and rapidly scalable community build-up process.
CONNECT
BLUE CARBON’s strategy leverages the “network effect” to enable the venture to scale rapidly. The term “network effect” refers to any situation in which the value of a product or service, or platform depends on the number of participants who leverage it. Typically, the greater the number of participants the greater the “network effect” and the greater the value created. In turn, the value that is created for the participants increases as the platform scales and brings on more participants. BLUE CARBON’s innovative phygital platform business model will create the required physical and digital “spaces” and facilitate the optimal user experience for all its participants and stakeholders to connect and ignite the “network effect”.
Not all platform business models are created equally, with some platforms having more potential than others to trigger powerful forms of increased value and higher returns. BLUE CARBON’s phygital platform business model integrates the five (5) main types of business platforms fused within both physical and digital environments and experiences. A unique user experience depends on the strength and quality of the platform ecosystem, its participants, and integrated smart technologies. BLUE CARBON’s approach positions the venture’s “Flagship” product as the “hook” and reason to attract participants from all stakeholder groups to join and believe in the platform.
SMART & IMMERSIVE TECHNOLOGIES
BLUE CARBON understands the dynamics of the fourth industrial revolution technologies that are accelerating the emergence of Web 3.0 and the metaverse. BLUE CARBON plans to integrate AI and machine learning algorithms into the backbone of its IT infrastructure to ensure the user experience for its participants is more intelligent and intuitive. Blockchain and quantum encryption technologies will also be embedded to ensure privacy and security. Tokens will be used to further incentivize participants to experience BLUE CARBON’s “Flagship” product to generate revenue and membership. Metaverse technologies such as gamification, augmented and virtual reality will ensure the user experience is immersive and engaging, and fosters deep and trusting connections.
UNIQUE USER EXPERIENCE
BLUE CARBON’s approach involves designing its platform’s user interface (UI) and user experience (UX) for the rapidly emerging Web 3.0 and the metaverse. In Web 3.0, we will all be creators and owners of our own content and data. Thus, privacy and high security of personal data will be paramount. The metaverse represents an interactive and immersive space that participants will populate on a platform through a “digital twin” or avatar of themselves. BLUE CARBON is preparing for this fast-approaching transformation of the global digital world and plans to utilize advanced protocols to build a large and strong network of participants. The Metaverse will provide BLUE CARBON with new and alternative ways, tools, and media to incentivize its participants to join its phygital platform.
POSITION
BLUE CARBON’s strategy is positioned with the deep understanding and experience that true technological change is a complex process of interactions within stages that are both upstream and downstream of innovation. The upstream stage, “invention”, is driven in large part by research and development (R&D), including both basic and applied. At the end of this stage and the beginning of the downstream phase, “innovation”, it is still not determined whether the technology, product, or service will be adopted and widely used. That happens only if there is success in the final two stages, “adoption” and “diffusion”, which reflects the field or commercial success of a technological innovation.
Presently, there is a tremendous public and private funding gap that exists in the first stage of pioneering ocean research and all the way through the “valley of death” of the innovation and the adoption stages of ocean deep tech startups. Although the carbon markets have opened-up private funding, capital is directed mainly at mature and independently verified field ocean blue carbon protection, management, or restoration projects or ocean deep tech startups with diffusion-ready technologies. BLUE CARBON believes strongly that supporting high-impact R&D projects and pre-seed ocean deep tech startups will ultimately be the optimal pathway to scale and make the greatest impact to achieve Net-Zero.
PRE-SEED OCEAN DEEP TECH STARTUPS
For an ecosystem that covers a majority of the planet, the ocean has largely been ignored by entrepreneurs and investors. Plenty of money is spent on ocean-based industries, but most of today’s marine investments are into extractive industries. However, in recent years, there has been a shift. Entrepreneurs and investors have started to look for opportunities to conserve, and even enhance, the ocean’s resources rather than exploit them. This investment space is relatively unchartered. BLUE CARBON has identified this gap and has designed a pre-seed funding model. A particular area of interest is opportunities in kelp and seaweed farming and coral reef monitoring and restoration. Again, BLUE CARBON’s approach will include an independent carbon credit verification, monitoring, and reporting process as well as incorporating a financing funding/investment model and mechanism for pre-seed deep tech startups.
HIGH IMPACT OCEAN R&D PROJECTS
While marine systems are under attack, they are woefully underexplored and poorly misunderstood. Oceans are massive on a scale that is sometimes hard to comprehend, covering about 70% of the earth’s surface. So why are climate change’s effects on oceans never front-page news? The short answer is that ocean science exists out of sight and out of mind. BLUE CARBON recognizes this blind spot and the incredible opportunity that pioneering ocean research presents to provide potential transformational solutions to climate change. BLUE CARBON will target high-potential upstream research projects, such as controlled methane hydrate extraction and atmospheric reforming. BLUE CARBON looks to work with its strategic partners to establish a rigorous carbon credit framework for the upstream research projects. BLUE CARBON also plans to utilize “forward sale” structures with blended financing to provide funding.
MARKET
BLUE CARBON’s strategy considers the rapidly evolving financing innovations in the carbon markets. The carbon markets are recently witnessing the emergence of the “forward sale” agreement, otherwise known as “streaming” or “royalty” financing used in the mining industry. As a direct result, the carbon marketplace is seeing early entrants that are typically led by former mining executives and funded by existing mining operations. In these contractual agreements, an investor or investor group makes an upfront deposit or investment in return for the rights to future carbon credits generated by terrestrial and ocean restoration, management, or protection projects.
BLUE CARBON’s strategy incorporates this carbon credit streaming financing structure and integrates it with a blended financing model in its “Flagship” product to provide capital to its portfolios of high-impact ocean research projects and pre-seed ocean deep tech startups portfolios. This model also includes provisions, if applicable, for additional payments per carbon credit to field project management organization and the local community when carbon credits are sold. BLUE CARBON’s financing structure will ensure contributions by government, corporations, private foundations, and individuals.
INTEGRATED PROGRAMS & SERVICES
BLUE CARBON’s approach regarding its integrated programs and services is intended to drive “participants” (members) to the venture’s “Flagship” product, aid in the community build-up process, and develop deeper and longer lasting relationships. These integrated programs and services will be based on the themes of education, innovation, entrepreneurship, and leadership and directed mainly at the youth. In collaboration with strategic partners, BLUE CARBON plans to offer a suite of programs and services that include academic courses, makerfests, hackathons, contests, startup bootcamps, mentorship, blog, podcasts, newsletters, webinars, conferences, digital library, awards, scholarships, internships, royalty rewards, and “BLUE CARBON Digital Badges, Wallet, and Passport”.
“FLAGSHIP” PRODUCT
More than ever, employees are looking to their employers to demonstrate visible, everyday environmental actions and want the opportunity to be directly involved. BLUE CARBON’s “Flagship” product is a turnkey solution for businesses to align their CSR and ESG action and employee and individual engagement for meaningful climate-action and Net-Zero results. Corporations and individuals can offset their carbon footprints by purchasing a “BLUE CARBON Token” or an ongoing “BLUE CARBON Membership”. Corporations and individuals’ contributions will be matched by donations and funding from foundations and government within BLUE CARBON’s hybrid funding-investment model to fund high-impact ocean research projects and pre-seed ocean deep tech startups.
AMPLIFY
In many situations the most defensible and best growth and amplification strategy for a platform business model is to connect to other larger platforms and their respective networks. Platforms on global networks are much less vulnerable to challenges because it is difficult for new rivals to enter a market on a global scale. In addition, in any platform business, success hinges on acquiring a high number of participants and amassing data on their interactions. Such assets can invariably be valuable in multiple scenarios and markets. By leveraging them, firms that have succeeded in one industry vertically often merge or diversify into larger industry markets or lines of business to grow their community size and improve their economics. From its inception, BLUE CARBON has partnered and positioned itself with a larger global innovation platform community venture.
The new generation has an increasingly strong social and environmental awareness as well as the energy and knowledge to lead our societies towards a low carbon and climate resilient future. Young people like Greta Thunberg are actively engaged at local, national, and global levels in raising awareness, running educational programs, conserving our nature, promoting renewable energy, adopting environmentally friendly practices, and establishing social enterprises. Today’s youth are more tech-savvy than ever before and form the foundation of most online platforms such as Facebook, YouTube, Instagram, and TikTok. Youth’s intrinsic digital DNA and viral abilities enable rapid amplification and scalability. Given these attributes, BLUE CARBON’s approach within the community build-up process primarily targets the youth.
YOUTH-FOCUSED
BLUE CARBON ‘s leadership team has collaborated over the years with several high-profile non-profits, and for-profits in the fields of education, innovation, entrepreneurship, startups, and global leadership. Most of these groups are at the center of youth-focused ecosystems and bring mature networks with academic and research institutions, government agencies, social enterprises, corporations, investor groups, philanthropic entities, and high-profile personalities and celebrities. BLUE CARBON plans to establish formal partnerships and management agreements with these organizations to inherit and connect the various aligned youth-focused innovation communities to further amplify and accelerate scale and impact.
LARGER GLOBAL INNOVATION PLATFORM COMMUNITY
From its inception, BLUE CARBON has partnered with a larger global innovation platform venture. This partner is focused on the quantum-deep technology space across all industries and markets. There is tremendous cross-over in science and technology, namely quantum, artificial intelligence, and blockchain, as well as common IT platform players, funding partners , participants, and stakeholders. BLUE CARBON’s lager platform partner has been collaborating closely with leading IT and smart technology firms to design and build the infrastructure of a novel phygital platform and business model. This strategic partnership presents BLUE CARBON with lower capital needs, a differentiated and defensible marketplace position, and the networks to rapidly initiate and accelerate scale and impact.
LEAD
Climate change and global warming. The rise of authoritarianism. The devastating spread of pandemics that respect no boundaries. The challenges we face as a world today are both unique and daunting. The world is moving faster than ever, the global population is exploding, the proliferation of technology has made society more connected than ever before in history, and yet the divisions between us have only widened. At the same time and in the words of Dr. Klaus Schwab, Founder and Chairman of the World Economic Forum, “… our physical, biological, and digital worlds are fusing, impacting all disciplines, economies, and industries, and even challenging ideas about what it means to be human.”
Aside from climate change, inequality, in all its forms, is an issue that will define our time. To create a sustainable future for humanity and the planet that is truly equitable at the present time requires a special kind of leadership. It requires leadership that is grounded in the issues and deeply aware of the systems and structures at play. This form of leadership is unafraid to navigate the unknown in a rapidly evolving world and has the resilience to forge ahead even when there are no answers, seeking solutions from different people, places, and cultures. BLUE CARBON’s approach exemplifies this type of leadership and seeks a more just and inclusive world where every person has the opportunity to make their dreams and imagination a reality.
HUMAN-CENTERED SOCIETY
BLUE CARBON’s new type of leadership’s larger goal is to provide a private sector-led “beta” case that aims to elucidate a pathway to create a society where everyone has the opportunity to use their imagination and energy to solve global technological, environmental, social, public policy, and economic challenges. By doing so the future will be one in which new innovations, products, models, and services are created continuously, making people’s lives more comfortable and society and the planet more sustainable. This is Society 5.0 - a super-smart, imagination-driven, and human-centered society.
SUSTAINABILITY
BLUE CARBON has woven this new type of leadership into its strategy and plans to build its unique phygital innovation platform and business model. In addition to incorporating CSR and ESG practices into its own operations BLUE CARBON intends to require the same of its portfolio projects and startups. BLUE CARBON plans to incentivize its community partners and participants to implement these protocols into their own operations and daily life. Finally, BLUE CARBON is experimenting with its larger global innovation platform partner with an novel “beta” stakeholder capitalism model.