Living Capital: The Emergence of Nature-Based Currencies and a Sustainable Financial Future.

Introduction

As our world faces unprecedented environmental challenges, it has become increasingly clear that our current economic systems are inadequate for addressing these complex problems. One of the most promising solutions to this conundrum is the concept of Living Capital, the value of the living ecological systems. By incorporating Living Capital into our financial systems, we can create a more sustainable and resilient future for our planet. This article explores the potential of Living Capital and Nature-Based Currencies (NBC) to transform our economy and environment.

Living Capital and Common Pool Resources

Living Capital is closely related to the concept of Common Pool Resources (CPR), as defined by Elinor Ostrom. (Covered in this article and more extensively in my Book Homohacker (2016) (English version) (Spanish version). CPRs are natural or human-made resources that are shared by a community and managed collectively for long-term sustainability. By recognizing the value of Living Capital and incorporating it into our economic systems, we can better manage our planet’s resources and the ecosystems that support life on Earth.

From Reductionist Economics to a Living Systems Approach

Our current economic and financial systems have historically valued nature as a non-living, expendable resource, subject to the laws of supply and demand. This reductionist approach has generated short-term wealth at the expense of long-term sustainability, leading to negative externalities like the loss of biodiversity and the crossing of planetary boundaries.

Recent developments in artificial intelligence (AI), blockchain, and computational biology offer a new perspective on valuing nature. By creating a digital twin of ecosystems, we can transform Living Capital into a monetizable BioAsset, enabling the creation of Nature-Based Currencies.

Nature-Based Currencies: A Sustainable Financial Future

NBCs are digital currencies that derive their value from the underlying natural or living capital. These currencies, enabled by advancements in AI, Internet-of-Things (IoT) sensors, and Web3 technologies, offer a more sustainable and holistic approach to finance. They have the potential to transcend extractive economies by embedding nature and a living planet as a fundamental reserve.

Distinguishing Living Capital from Natural Capital

It is important to differentiate Living Capital from Natural Capital. While Natural Capital can include resources like timber, gold, and fossil fuels, Living Capital focuses exclusively on the emergent value generated by the relationships of living ecosystems. This distinction emphasizes the interconnected nature of ecosystems and the necessity of preserving them for future generations.

The Assetization of Living Capital

To create NBCs, Living Capital must undergo a thorough process of assetization. This involves measuring, reporting, and verifying (MRV) biodiversity using remote sensing, IoT sensors, drones, satellite imaging, and assessment models. The assetization of Living Capital allows for the creation of a financial instrument that dynamically adjusts its value based on the state and health of nature.

Trusted Ledgers for Nature-Based Currencies

NBCs require a trusted global mechanism for accounting, which can be provided by blockchain technology. As natural capital accounting becomes the fundamental asset for new monetary systems, blockchain’s inherent trust and sequential accounting capabilities are essential for monitoring and verifying the health of nature and its corresponding financial value.

Humans are Nature: AI-Enhanced Regenerative Behaviors and Nature-Based Currencies

One of the most intriguing possibilities of Nature-Based Currencies (NBC) is the integration of artificial intelligence (AI) into the regenerative use of these coins and tokens. AI can play a crucial role in developing minted layers of value and information that are built upon the accounted use of the currency. By registering the regenerative behaviors of users and the aggregated economy, AI can help to create a more sustainable and adaptive financial system.

As humans are intrinsically part of nature, incorporating AI into the management and use of NBCs can enable the monitoring and promotion of regenerative behaviors among users. This, in turn, can lead to the creation of a positive feedback loop that encourages and rewards sustainable actions on both individual and collective levels. By leveraging AI’s capabilities for data analysis, pattern recognition, and predictive modeling, NBCs can dynamically adjust their value and function to better align with the regenerative goals of living capital management.

Furthermore, the integration of AI into NBCs can facilitate more efficient and transparent resource allocation, as well as improved decision-making processes in terms of environmental conservation and restoration efforts. This can lead to a more proactive and adaptive approach to addressing the complex environmental challenges we face today.

Conclusion

The integration of artificial intelligence with Nature-Based Currencies presents a powerful opportunity to revolutionize our financial systems and foster a sustainable, regenerative future for our planet. By recognizing the value of Living Capital and leveraging the capabilities of AI, we can develop a financial system that not only sustains but actively enhances the living ecosystems upon which we all rely. This innovative approach, combined with the human capacity for adaptability and collective action, can help us tackle the complex environmental challenges we face and ultimately ensure a resilient and thriving global economy that benefits both people and the planet.

Some Ecological projects and cryptocurrencies transforming how we approach environmental conservation and climate change mitigation: Pachama, GBM Coin, and Single Earth.

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