Opportunities at the intersection of two technology domains

The drive for economic growth often sits in tension with the moral impulse to preserve environmental health. Economic value can be created by extracting and exploiting physical resources, and cost savings can be realized by degrading public goods. In the 21st century, however, emerging technologies are creating the opportunity to realign incentives so they point towards both economic and environmental goals.

This proposal focuses on two key technological domains which each represent rich opportunities in their own right and, when combined, create an unprecedented opportunity to understand behavior and redesign individual and organizational incentive structures at a local, regional and global scale to promote both human dignity and planetary regeneration.

The two spheres of focus are spatial data technologies including remote sensing, IoT and advanced analytics, and Web3 technologies including blockchains, oracles and smart contracts. Together, they form the constituent components to build sustainability-linked antifragile systems in areas as diverse as finance, mobility, machine governance, environmental impact assessment and others.

Our ideas are derived from a range of innovators working to connect empirical sensor measurements with smart contracts.

In many ways, these two spheres — spatial data technologies and consensus networks — do not fit together very easily. Spatial data volumes are not compatible with the high cost of storing data on blockchains. The computational cost of performing sophisticated spatial data analytics also means that public blockchains are not ideal computing platforms for these algorithms. With smart contracts, digital assets can be programmed — an immense opportunity, but also an immense security risk. Developing production-grade systems which include spatial data capture, analytics and sustainability-linked smart contracts will require substantial technological development. This said, the maturity of these technologies is also developing rapidly.

Capturing Information

Our approach is based on our understanding of the value of information, and its flow from point of capture to point of influence. Our collective capacity to observe what is happening on and around Earth is growing as the Information Age progresses.

Over 65 years ago, humanity launched its first satellite; today there are thousands of satellites in orbit, including thousands of remote sensing devices monitoring physical characteristics of the Earth and its atmosphere. What’s more, the cost of placing sensors into orbit is plummeting, as is the cost of the instruments — while the resolution of data capture capabilities is improving.

Satellite imagery is intensely useful to commercial, government, non-profit, academic and private consumers. Furthermore, technology is developing rapidly, including the ability to directly monitor environmental conditions such as greenhouse gas emissions, maritime shipping patterns, air quality and carbon sequestration.

Advancements in remote sensing represent a small component of the overall development of our collective capability to monitor human activity. The Internet of Things — a global network of connected devices — is capturing information about every aspect of human activity. As IoT devices are increasingly embedded in our infrastructure and the assets we interact with every day, our situational awareness capacity develops.

How does remote sensing and IoT connect with our aim to decarbonize and mitigate climate change? Physical observations of the Earth and its natural and human systems include signals which will enable us to:

• Identify major emitters of carbon, methane and other greenhouse gases, even if they don’t submit ESG reports, or publish misleading reports. Coupled with a global public asset registry, this environmental surveillance capability allows us to intervene with carrots and sticks to ensure firms behave sustainably — and support capture and storage initiatives.

• Identify system-wide opportunities to improve efficiency — for example, enhancing operational efficiency of flight routing, shipping and logistics, or autonomous vehicle networks.

• Insure natural systems, letting us rapidly unlock capital and intervene to assess damage and preserve critical systems and natural assets in the event of a disaster.

In order for data captured by edge sensors to be most useful, we will aim to increase the use and capabilities of secure enclaves. Trusted IoT has multiple advantages over devices using traditional processors. Data can be hashed and digitally signed at the moment of capture, providing integrity guarantees. Furthermore, it can be encrypted at the edge, meaning the device owner can be self-sovereign: they can have full control over the information collected by their assets throughout its life cycle. This dovetails nicely with Web3 technologies such as data marketplaces and proxy re-encryption, which enable access to plaintext data to be granted in a sophisticated, trustless and automated way, while remaining encrypted from end to end.

The evolution in our capacity to capture data is only useful due to a concurrent capability we are developing: our ability to analyze this data, and derive meaning from it. This step forms a key layer of our protocol stack: reams of spatial data is not useful to smart contracts due to prohibitive costs of processing and storing it on chain.

By extracting meaningful insights from spatial data, firms and governments can make more effective decisions. These have use cases ranging from planning and construction to transport, public health, emergency services, the ocean economy, retail, insurance and even finance.

The final layer of the spatial data sphere of our proposed framework is the data storage capability. This slice is being addressed distributed data storage projects such as Protocol Labs’ IPFS / Filecoin, Arweave, 3Box, or potentially any more IoT-data focused storage projects.

Consensus networks, blockchains and smart contracts are evolving to create a durable shared reality in the informational domain, controlled by no one, governed by a strict, transparent set of rules. We believe that this evolution will continue to complement — and eventually, in some ways outcompete — our legacy systems, and come to underpin the functioning of our global society.

Beyond the hype, blockchains and smart contracts are proving that — in appropriate cases — they can provide substantial cost savings over traditional processes, and sometimes enable applications that weren’t possible in legacy computing systems.

Spatial finance is “the integration of geospatial data and analysis into financial theory and financial practice”, according to Dr Ben Caldecott, the director of the Sustainable Finance Programme at the University of Oxford. Integrating geospatial data and analysis with decentralized finance applications, which run on smart contracts, holds extraordinary potential to design incentives that are closely tied to pro-environmental actions.

According to HSBC, bonds issued using blockchains realize almost 90% cost savings over traditional bond issuance processes. The potential to disrupt the global bond market — which is worth nearly $100T — while linking new issuances to sustainability metrics derived from the spatial data technologies described above holds the greatest promise to overcome institutional inertia and make a rapid shift to decarbonization. The global financial system is the central nervous system of the global economy — a sort of pressure point. Our aim is to exert pressure on corporate decision-making by affecting their bottom line, making it the economically rational course of action to preserve environmental health.

Sustainability-linked bonds are just one area of innovation in the emerging sustainable finance toolkit: many others are leveraging spatial data and analytics to develop products profiting off of the transition to sustainability. Changes in the regulatory environment are facilitating this, enhancing the potential profitability of sustainable behavior.

Another area stands out here: parametric insurance. Last year it was announced that a group of stakeholders in Quintana Roo, Mexico established the Coastal Zone Management Trust, which is dedicated to preserving the health of the coral reef that prevents coastal erosion and serves as a draw to tourists. The trust purchased an insurance policy for the Mesoamerican Reef that pays out should wind speeds in a pre-defined geography exceed 100mph, meaning reef damage is likely. This enables local stakeholders to rapidly assess reef damage and repair before irreversible erosion occurs.

This model could equally apply to other ecological systems — forests, glaciers, waterways, fish stocks, wildlife, etc — especially as reliable, privacy-preserving observation methods develop. These policies will be further enabled due to the efficiency distributed ledgers and smart contracts can offer to the insurance industry. Each of these parametric insurance plays rest on the accurate capture of the parameters which trigger a payout, explaining the emphasis on the first sphere of the investment framework.

The autonomous vehicle revolution holds immense promise to improve the efficiency of our transport networks and reduce the contribution of one of the most substantial sources of greenhouse gas emissions. It also has many unanswered questions, perhaps the most important of which: how can we develop safe, efficient autonomous vehicle networks that function across jurisdictional boundaries while still allowing for market competition? The free market is critical to drive innovation and exert downward pressure on costs, but some sort of pre-competitive cooperation is necessary to make sure vehicles are able to understand the local rules of the road and interact without colliding.

Again, here smart contracts offer great promise to reduce coordination costs by providing a single, authoritative data store for governments to share information with vehicles, and vice versa. Building self-sovereign mobility networks based on trusted IoT and end-to-end encrypted data marketplaces, secure multiparty computation and other privacy-preserving information technologies, we can create a system that captures the benefits that our enhanced situational awareness can realize while still respecting the individual’s right to choose privacy, and potentially profit off of their personal information.

Together, these two spheres hold enormous potential to find unprecedented efficiencies in critical processes across our economy. If we can evolve this ecosystem, we can bend incentivization mechanisms so the profit motive sits in alignment with the aim to preserve environmental health.

Opportunities at the intersection of two technology domains

The drive for economic growth often sits in tension with the moral impulse to preserve environmental health. Economic value can be created by extracting and exploiting physical resources, and cost savings can be realized by degrading public goods. In the 21st century, however, emerging technologies are creating the opportunity to realign incentives so they point towards both economic and environmental goals.

This proposal focuses on two key technological domains which each represent rich opportunities in their own right and, when combined, create an unprecedented opportunity to understand behavior and redesign individual and organizational incentive structures at a local, regional and global scale to promote both human dignity and planetary regeneration.

The two spheres of focus are spatial data technologies including remote sensing, IoT and advanced analytics, and Web3 technologies including blockchains, oracles and smart contracts. Together, they form the constituent components to build sustainability-linked antifragile systems in areas as diverse as finance, mobility, machine governance, environmental impact assessment and others.

Our ideas are derived from a range of innovators working to connect empirical sensor measurements with smart contracts.

In many ways, these two spheres — spatial data technologies and consensus networks — do not fit together very easily. Spatial data volumes are not compatible with the high cost of storing data on blockchains. The computational cost of performing sophisticated spatial data analytics also means that public blockchains are not ideal computing platforms for these algorithms. With smart contracts, digital assets can be programmed — an immense opportunity, but also an immense security risk. Developing production-grade systems which include spatial data capture, analytics and sustainability-linked smart contracts will require substantial technological development. This said, the maturity of these technologies is also developing rapidly.

Capturing Information

Our approach is based on our understanding of the value of information, and its flow from point of capture to point of influence. Our collective capacity to observe what is happening on and around Earth is growing as the Information Age progresses.

Over 65 years ago, humanity launched its first satellite; today there are thousands of satellites in orbit, including thousands of remote sensing devices monitoring physical characteristics of the Earth and its atmosphere. What’s more, the cost of placing sensors into orbit is plummeting, as is the cost of the instruments — while the resolution of data capture capabilities is improving.

Satellite imagery is intensely useful to commercial, government, non-profit, academic and private consumers. Furthermore, technology is developing rapidly, including the ability to directly monitor environmental conditions such as greenhouse gas emissions, maritime shipping patterns, air quality and carbon sequestration.

Advancements in remote sensing represent a small component of the overall development of our collective capability to monitor human activity. The Internet of Things — a global network of connected devices — is capturing information about every aspect of human activity. As IoT devices are increasingly embedded in our infrastructure and the assets we interact with every day, our situational awareness capacity develops.

How does remote sensing and IoT connect with our aim to decarbonize and mitigate climate change? Physical observations of the Earth and its natural and human systems include signals which will enable us to:

• Identify major emitters of carbon, methane and other greenhouse gases, even if they don’t submit ESG reports, or publish misleading reports. Coupled with a global public asset registry, this environmental surveillance capability allows us to intervene with carrots and sticks to ensure firms behave sustainably — and support capture and storage initiatives.

• Identify system-wide opportunities to improve efficiency — for example, enhancing operational efficiency of flight routing, shipping and logistics, or autonomous vehicle networks.

• Insure natural systems, letting us rapidly unlock capital and intervene to assess damage and preserve critical systems and natural assets in the event of a disaster.

In order for data captured by edge sensors to be most useful, we will aim to increase the use and capabilities of secure enclaves. Trusted IoT has multiple advantages over devices using traditional processors. Data can be hashed and digitally signed at the moment of capture, providing integrity guarantees. Furthermore, it can be encrypted at the edge, meaning the device owner can be self-sovereign: they can have full control over the information collected by their assets throughout its life cycle. This dovetails nicely with Web3 technologies such as data marketplaces and proxy re-encryption, which enable access to plaintext data to be granted in a sophisticated, trustless and automated way, while remaining encrypted from end to end.

The evolution in our capacity to capture data is only useful due to a concurrent capability we are developing: our ability to analyze this data, and derive meaning from it. This step forms a key layer of our protocol stack: reams of spatial data is not useful to smart contracts due to prohibitive costs of processing and storing it on chain.

By extracting meaningful insights from spatial data, firms and governments can make more effective decisions. These have use cases ranging from planning and construction to transport, public health, emergency services, the ocean economy, retail, insurance and even finance.

The final layer of the spatial data sphere of our proposed framework is the data storage capability. This slice is being addressed distributed data storage projects such as Protocol Labs’ IPFS / Filecoin, Arweave, 3Box, or potentially any more IoT-data focused storage projects.

Consensus networks, blockchains and smart contracts are evolving to create a durable shared reality in the informational domain, controlled by no one, governed by a strict, transparent set of rules. We believe that this evolution will continue to complement — and eventually, in some ways outcompete — our legacy systems, and come to underpin the functioning of our global society.

Beyond the hype, blockchains and smart contracts are proving that — in appropriate cases — they can provide substantial cost savings over traditional processes, and sometimes enable applications that weren’t possible in legacy computing systems.

Spatial finance is “the integration of geospatial data and analysis into financial theory and financial practice”, according to Dr Ben Caldecott, the director of the Sustainable Finance Programme at the University of Oxford. Integrating geospatial data and analysis with decentralized finance applications, which run on smart contracts, holds extraordinary potential to design incentives that are closely tied to pro-environmental actions.

According to HSBC, bonds issued using blockchains realize almost 90% cost savings over traditional bond issuance processes. The potential to disrupt the global bond market — which is worth nearly $100T — while linking new issuances to sustainability metrics derived from the spatial data technologies described above holds the greatest promise to overcome institutional inertia and make a rapid shift to decarbonization. The global financial system is the central nervous system of the global economy — a sort of pressure point. Our aim is to exert pressure on corporate decision-making by affecting their bottom line, making it the economically rational course of action to preserve environmental health.

Sustainability-linked bonds are just one area of innovation in the emerging sustainable finance toolkit: many others are leveraging spatial data and analytics to develop products profiting off of the transition to sustainability. Changes in the regulatory environment are facilitating this, enhancing the potential profitability of sustainable behavior.

Another area stands out here: parametric insurance. Last year it was announced that a group of stakeholders in Quintana Roo, Mexico established the Coastal Zone Management Trust, which is dedicated to preserving the health of the coral reef that prevents coastal erosion and serves as a draw to tourists. The trust purchased an insurance policy for the Mesoamerican Reef that pays out should wind speeds in a pre-defined geography exceed 100mph, meaning reef damage is likely. This enables local stakeholders to rapidly assess reef damage and repair before irreversible erosion occurs.

This model could equally apply to other ecological systems — forests, glaciers, waterways, fish stocks, wildlife, etc — especially as reliable, privacy-preserving observation methods develop. These policies will be further enabled due to the efficiency distributed ledgers and smart contracts can offer to the insurance industry. Each of these parametric insurance plays rest on the accurate capture of the parameters which trigger a payout, explaining the emphasis on the first sphere of the investment framework.

The autonomous vehicle revolution holds immense promise to improve the efficiency of our transport networks and reduce the contribution of one of the most substantial sources of greenhouse gas emissions. It also has many unanswered questions, perhaps the most important of which: how can we develop safe, efficient autonomous vehicle networks that function across jurisdictional boundaries while still allowing for market competition? The free market is critical to drive innovation and exert downward pressure on costs, but some sort of pre-competitive cooperation is necessary to make sure vehicles are able to understand the local rules of the road and interact without colliding.

Again, here smart contracts offer great promise to reduce coordination costs by providing a single, authoritative data store for governments to share information with vehicles, and vice versa. Building self-sovereign mobility networks based on trusted IoT and end-to-end encrypted data marketplaces, secure multiparty computation and other privacy-preserving information technologies, we can create a system that captures the benefits that our enhanced situational awareness can realize while still respecting the individual’s right to choose privacy, and potentially profit off of their personal information.

Together, these two spheres hold enormous potential to find unprecedented efficiencies in critical processes across our economy. If we can evolve this ecosystem, we can bend incentivization mechanisms so the profit motive sits in alignment with the aim to preserve environmental health.