Good news for crypto buffs: You can now buy NFTs that are linked to specific tracts of land in the Brazilian rainforest. While the company claims that it’s a bold new vision for conservation, it’s in reality a harbinger of a wave of problematic crypto-driven greenwashing.
The company, Nemus, only owns 158 square miles (410 square kilometers) of rainforest at the moment, but the company hopes to use some of the cash generated from the sales of the NFTs to buy additional land, as well as fund forest restoration projects like tree preservation and forest upkeep. The NFTs Nemus sells won’t guarantee specific ownership of particular tracts of land, but will give buyers — which Nemus calls, somewhat eye-rollingly, “Guardians” — the ability to access information about the preservation of the land as well as decisions about its conservation.
“The means to protect the rainforest have historically been limited,” the group’s website grandly proclaims. “Old ways aren’t working. Nemus invites you to join a generation of Guardians who will fix this.”
According to Reuters, Nemus’s founder, Flavio de Meira Penna, “dismissed” any concerns about the carbon footprint of NFTs, claiming that the company’s mission of preserving the Amazon was much more important. (Before founding Nemus, according to Penna’s LinkedIn, he was involved in various projects in Brazil, including a sustainable lumber business, an agribusiness venture, and the “sale of Brazilian minority stake… in Oil & Gas business to American Multinational.”) Earther reached out to Nemus asking the company to elaborate on Penna’s statement and with questions about its environmental impact and any future plans for carbon offsetting, we did not hear back from them as of press time.
Like a lot of crypto operations, Nemus has some starry-eyed aspirations. On its website, a “Litepaper” walks potential Guardians (ugh) through a future vision for a world with Nemus. It’s a world where similar organisations have been created to safeguard oceans, corals, “and other valuable natural resources;” where a global marketplace based on land conservation prospers; where “people no longer have the luxury to destroy our land.” In this vision of the future, crypto’s carbon footprint is no longer an issue: “Efforts led by Nemus have had an enormous impact on climate change and its ecosystem allows for efficient trade of carbon credits generated from the lands that Nemus protects,” the website lays out. “It has helped establish a true market for offsetting emissions, which have decreased tremendously due to the high cost of offsetting versus the value of simply doing good.”
Even without this potential future crypto-utopia, the short-term goals of Nemus all appear, on paper at least, extremely worthy. Protecting crucial rainforest land from harmful development? A great solution. The involvement of Indigenous peoples, which the company says it plans to do? Absolutely necessary. Doing this all in the Amazon, which is one of the world’s most important carbon sinks that is coming rapidly under threat from climate change and overdevelopment, is extra needed.
But the current carbon emissions associated with NFTs can’t just be waved away in some moonshot vision of the future. Cryptocurrencies like Ethereum are based on what’s called proof of work, or the process of setting computers to work to solve equations that form the underpinnings of the network. These equations take a lot of energy. According to Digiconomist, which estimates and tracks the energy use of various cryptocurrencies, Ethereum’s current global estimated energy use is just over 112 terawatt-hours per year. (For some context, the entire country of Sweden used 123 terawatt-hours in 2020.) The skyrocketing popularity of NFTs has helped juice up this number: in late March of last year, as the NFT boom was getting into full swing, Digiconomost estimated that the cryptocurrency used just around 30 terawatt-hours per year.
Ethereum, the blockchain on which NFTs are based, has announced its intention to move to a system called proof of stake, which crypto experts say will substantially help lower energy use. But the shift has been constantly delayed by various factors. Ethereum founder Vitalik Buterin, who has been outspoken on the myriad of problems plaguing crypto and wants NFTs to only be sold in service of public goods, told a crowd at a crypto conference earlier this year that businesses worried about the carbon footprint of Ethereum should not use the network until after it has migrated to proof of stake, even if that date is several years in the future.
A lot of NFT devotees and platforms have dug into carbon offsetting as a “solution,” guaranteeing certain credits associated with the purchase of crypto art that will theoretically count against the emissions it takes to create them. But carbon offsets are simply a BandAid that allow polluters to keep churning out emissions, a distraction from the real work that deep and society-wide decarbonization is going to require. (You can see the sort of circular logic that plagues some carbon offsetting schemes particularly well with the possibilities Nemus presents: imagine Nemus funding land preservation with cryptocurrencies produced on a dirty grid, then offering that same land preservation as an offset that can be used to greenwash away the impacts of producing even more crypto.) And carbon markets are notoriously difficult to monitor and certify: a 2019 ProPublica investigation found that many forest carbon credit projects in Brazil failed to actually preserve the forest.
If I have to guess, Nemus is just the first front in a wave of NFT-based greenwashing schemes that promise climate solutions while falling short on the actual execution. Even if all of the company’s promises will come true, the idea of reaching a green techno-utopia shouldn’t deter conversations about the real and tangible shortcomings of the technology today. And while web3 proponents point to the possibility, in the short term, NFTs and crypto are still concentrating power in the hands of a few — many of whom stand to benefit from the sales of NFTs in the short term (Nemus’s early-stage investors receive a small cut of each sale). Greenwashing is getting a crypto facelift — and who knows who will fall for it next.