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Cryptocurrency—A New Tool to Help Combat Wildlife Trafficking

Wednesday, August 2, 2017
Sara Kaufhardt

Sara Kaufhardt

Research and Publications Intern

The enforcement of wildlife trafficking laws suffers from a lack of capacity in “hotspot” countries to combat the powerful economic incentives for poaching endangered species. However, emerging technologies create new opportunities to counter these incentives for poaching by harnessing the economic incentives to protect ecosystems, natural resources, and wildlife.

“Cryptocurrency” is a new technology that can help mobilize resources for anti-trafficking operations by providing public and private actors with a virtual wallet to manage investments and assets in various currencies. The Blue Alliance, a cryptocurrency coalition, describes it as “currency with a purpose,” which can facilitate global environmental enforcement efforts by harnessing the $10 billion USD cryptocurrency market that is growing at an exponential rate.

The cryptocurrency market is a valuable platform for investment and financial asset exchange because it reduces transaction costs by providing immediate and direct ownership of recently acquired assets with no commission fee for exchanges made using cryptocurrency. This innovative financial network can facilitate the economic valuation of environmental protection.

Leading the currency revolution is Lykke, a company that has built a global marketplace for all types of financial assets, including cryptocurrency. Alan Laubsch, Director of Natural Capital Resources at Lykke, argues that cryptocurrency can protect critical ecosystems by “democratizing investment in natural capital” and facilitating the integration of ecosystem service valuation into global accounting systems. Cryptocurrency operates through a global online marketplace, facilitated by Lykke, which allows individuals to freely trade assets. Cryptocurrencies can be traded amongst themselves or traded for other currencies, for example the U.S. dollar.

Another cryptocurrency company, SolarCoin, provides a template for using cryptocurrency to strengthen environmental efforts. This volunteer project offers a “SolarCoin” to the producer of solar energy for every megawatt hour of solar electricity produced. As of June 2017, one SolarCoin is valued by Lykke at $1,300 USD and can be traded freely for other assets or currencies, which provides a powerful economic incentive to produce solar energy.

Tiger Alliance cryptocurrency is one new tool for mobilizing anti-trafficiking resources (Photo: Wikipedia).

The Freeland Foundation, a nonprofit dedicated to combatting wildlife trafficking, works to build capacity of local law enforcement in nations where poaching is most prominent. In a recent panel discussion, Steve Glaster, the founder of the Freeland Foundation, noted the success of the “Surviving Together Initiative” to stop the traffic of tigers in a small community in Thailand.

Through this initiative, Freeland provides community environmental education, professional patrol training for local rangers, and advanced technologies such as wilderness cameras that could surveil the forest and inform rangers of especially vulnerable areas. Deployed on a larger scale, these methods could improve enforcement of wildlife laws throughout Africa and Southeast Asia. However, “Surviving Together” requires a sustained source of funding to be expanded to all communities struggling to combat wildlife trafficking. Cryptocurrency can potentially mobilize the necessary resources to deploy these strategies on a regionwide scale throughout Africa and Southeast Asia.

In partnership with Blue Alliance, Freeland Foundation is developing a cryptocurrency to assign economic value to live tigers. One unit of the currency, called Tiger Alliance, equates to one square meter of protected tiger forest habitat. Profits from the sale and trade of Tiger Alliance currency will support the Freeland Foundation’s implementation of their enforcement strategy and capacity-building activities throughout Laos, Thailand, Zimbabwe, and other nations vulnerable to wildlife trafficking. 

Moreover, the power of cryptocurrency to strengthen environmental initiatives can extend beyond enforcement of illegal wildlife trafficking to carbon sequestration and natural resource preservation. In partnership with Worldview International Foundation (WIF), Lykke has created Heyerdahl Climate Pioneers (HCP), a cryptocurrency for living mangroves and carbon credits in Thor Heyerdahl Climate Park in Myanmar. The purchase of this cryptocurrency funds the planting of a mangrove tree to increase climate change mitigation through carbon capture. Dr. Arne Fjortoft, founder of WIF, says, “The challenge is to plant millions of mangrove trees mitigating 3-5 times more CO2 than rainforest trees. It costs only one U.S. dollar to capture one ton CO2 from the atmosphere by working with nature.”

Cryptocurrencies such as Tiger Alliance, SolarCoin, and HCP present new, and largely unexplored, opportunities to mobilize resources for environmental enforcement efforts. By integrating these new technologies into enforcement strategies, environmental authorities may be able to economically incentivize the preservation of endangered species, natural resources, and ecosystems.

This blog post was first published on the website for the International Network for Environmental Compliance and Enforcement (INECE).