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COTAP’s Rationale for Accepting Cryptocurrency

June 7th, 2021

Cryptocurrency’s Carbon Footprint


Estimates vary, but it’s well-established that many cryptocurrencies in general, and Bitcoin in particular, are energy intensive to create. Most crypto activity and value is currently centered around Bitcoin, which is predominantly mined in China, and primarily using electricity generated by coal. Even when mining is powered by renewables, it still causes problems by pushing communities’ electricity rates through the roof, spurring changes in state regulations and building codes.

Only Donate Crypto To Us if You Already Own It!


COTAP only seeks cryptocurrency donations from those who already own it and are already looking to donate it.

We are not contributing to crypto’s carbon emissions, as discussed below. By contrast, we’re creating a new, unique, and compelling mechanism for crypto owners to directly donate it to offset carbon emissions. Before, you’d either have to first sell it and incur capital gains taxes, or you’d have to set up a donor advised fund (DAF).

It’s also important to note that this decision goes far beyond climate and carbon. It was also based on the fact that donors will likely find us to be a compelling option because crypto essentially sits at the intersection of wealth and carbon emissions, and COTAP sits at the intersection of not only carbon emissions abatement, but also poverty alleviation.

We Didn’t Go Looking for Crypto, Crypto Found Us


In April 2021, we received a generous donation via a DAF. When we reached out to the donors (a couple) to thank them and learn why they chose us, they told us they’d donated Bitcoin to their DAF and then made donations from there. So, we’d begun “doing crypto” unintentionally! Because we’d received many anonymous DAF donations before this one, it’s possible we’d indirectly accepted crypto even earlier.

Then the question becomes… do we send the money back? If we did, would that reverse the environmental damage caused by the mining of this Bitcoin? Of course not. Not only that, but the funds would just wind up being donated to another nonprofit, and probably one whose mission has nothing to do with climate change. The most important question is, “Did these donors go out and obtain/mine Bitcoin for the purposes of donating it to COTAP?” Extremely unlikely. Accordingly, COTAP’s acceptance of cryptocurrency doesn’t result in new or “additional” crypto-related CO2 emissions, as discussed below.

“Additionality” & COTAP’s Role in Crypto’s Carbon Emissions


A core concept when evaluating carbon credit quality is what’s known as their “additionality.”  Additionality means that a carbon removal (e.g. tree planting) or avoidance project (REDD+, avoided deforestation) would not be financially viable absent the financing mechanism of carbon credits.  So, reforestation on public land as part of a compulsory national tree planting scheme is not additional.  A forest protection project inside a legally protected area or national park, where logging is prohibited, is not additional.  As with anything, there are complexities, exceptions, and edge cases but you get the point.

Applying the logic of additionality to COTAP and cryptocurrency, the question becomes something like “does COTAP’s acceptance of crypto drive demand for crypto and/or result in additional crypto mining?”  The answer is no.  That’s why we’re only interested in crypto specifically from those who already have it and are already looking to donate it.

An Imperfect but Correct Decision


So in theory, should a climate mitigation nonprofit accepting crypto be considered hypocrisy, duplicity, heresy, etc.?  That’s a very fair point, but it’s also important to note that the carbon/climate piece is half of why COTAP exists.  The other half is poverty alleviation and vulnerability reduction, not unlike Save the Children and World Vision. Both take in over $500M in annual donations… and they accept cryptocurrency.

Again, COTAP is only interested in crypto donations from those who already have it and are already looking to donate it, and that doesn’t result in new environmentally-damaging cryptocurrency mining.

That said, we’re also not completely innocent and blameless here. Our decision doesn’t reduce the legitimization and acceptance of crypto; our decision could be rightly characterized as a missed opportunity to be a purist/activist and lead by example – swearing off crypto because of its contribution to climate change.

When navigating complicated decisions like this, it’s important to remind ourselves of our missions and why we exist.  That’s to serve our partner projects and their participating communities, some of the poorest people in the world. While the climate/carbon part of what we do is a bit fraught when it comes to crypto, the poverty alleviation part is not.

Our decision to accept crypto was binary – not a maybe or just do it a little bit, but Yes or No. By putting crypto in context and not spurring new mining activity, by realizing that not accepting crypto won’t undo its carbon emissions, and by realizing that the money would be donated anyway to other nonprofits, we believe we’ve made an imperfect but correct decision.

Press Release: COTAP Becomes the First Carbon Offset Provider to Enable Funding Offsets with Cryptocurrency

June 4th, 2021

The below press release can be found on PR Newswire here and our cryptocurrency donation page is https://cotap.org/crypto. Go here to learn about our rationale for accepting cryptocurrency.



WALNUT CREEK, Calif., June 4, 2021 /PRNewswire/ — The global non-profit Carbon Offsets to Alleviate Poverty (COTAP.org) announced it has become the first carbon offset provider to accept all major cryptocurrencies. It joins over 200 other nonprofits which have partnered with The Giving Block to enable cryptocurrency donations, and to ensure that they are tax-compliant, secure, and automatically converted into cash. COTAP can now use cryptocurrency donations to support its high-quality, verified carbon offset programs in six low-income countries, creating a unique way to mitigate carbon emissions while generating life-changing income for some of the world’s poorest communities.

“This is a significant first on several levels,” said COTAP founder and CEO Tim Whitley. “The voluntary carbon offset market is exploding, with demand at an all-time high, and so is the market and demand for cryptocurrency. But there are still barriers to entry for companies and people who want to offset their carbon emissions, so we’re working to bring them down however we can, including by being the first to take cryptocurrency donations to support offset projects. At the same time, cryptocurrency, and Bitcoin in particular, has a huge carbon footprint. That’s a serious problem. By making it possible for the first time to use cryptocurrency to help support to high-quality offsets that lower emissions and fight poverty, we hope to help mitigate it.”

“Crypto is going to continue to grow explosively, so if we want to reduce its climate impact, we’re going to need a way to decarbonize it,” Whitley said. “Switching it to sustainable energy sources would be great, but will take time. Meanwhile, if you want to address the carbon footprint of the cryptocurrency you’re holding, or you want to use it to offset the carbon emissions of other activities, you now have that option. By donating just a fraction of one crypto coin, a donor can potentially counteract that coin’s emissions many times over.”

Cryptocurrencies are surprisingly carbon-intensive. Because it depends on high-powered, energy-guzzling computers, Bitcoin for example uses the same amount of energy as small countries like the Netherlands, generating an estimated 22-23 million metric tons of carbon dioxide emissions a year. That’s the reason for the market-moving controversy about whether Elon Musk would or wouldn’t accept Bitcoin as payment for Tesla electric cars, at least until Bitcoin “mining” transitions to sustainable energy sources. At the same time, Bitcoin and other cryptocurrency usage and acceptance are expanding across many industries.

Companies of any size, and individuals anywhere in the world, can work with COTAP to offset as little as 1 metric tonne of carbon emissions. In the U.S., individuals don’t pay capital gains tax on cryptocurrency used to make COTAP offsetting donations, and depending on their income level and whether or not they itemize, they may also get an income tax deduction.

COTAP’s carbon offset projects counteract carbon emissions through nature-based solutions including tree planting, agroforestry and forest protection. They are all located in areas where income levels are less than $2 per day, and are certified under Plan Vivo, the world’s longest-standing voluntary standard for forest carbon. Plan Vivo stipulates not only that rural communities must actually own their carbon offset projects, but also that they must receive at least 60% of the carbon revenues.

Donations to COTAP are used to fund these high-quality, verified carbon offset projects. 90% of net proceeds from carbon offsetting donations it receives goes to COTAP’s six Plan Vivo-certified projects in Nicaragua, Uganda, India, Fiji, Indonesia, and Mexico. Those projects in turn share 60% or more of the revenues with participating low-income communities. For example, a $5000 offsetting donation made out to “All Projects” would pay each of COTAP’s six projects $750 for 55.56 metric tonnes’ worth of their carbon credits, and generate a total of at least $2,700 in income for poor communities.

Contact:  Stephen Kent, skent@kentcom.com 914-589-5988

CommuniTree Surpasses 10 Million Trees

March 12th, 2021

Offset your CO2 emissions through this project here:

 


Taking Root’s CommuniTree reforestation project in Nicaragua has been a valued COTAP partner since 2011. CommuniTree recently released their 2020 annual report, which includes these impressive cumulative achievements:

  • CommuniTree has paid over $2.2 million to more than 1,300 farming families.
  • It’s planted more than 10 million trees over the equivalent of 5,000+ hectares, making it the largest reforestation initiative in Nicaragua.
  • 1,518,386 tonnes of projected CO2 removals (aka carbon offsets).

Overview of CommuniTree’s Impacts in 2020



Tracking Every Farmer, Dollar, Tonne, Tree, and Hectare…


In 2020, CommuniTree continued making great progress with its FARM-TRACE tracking software. Developed in collaboration with the University of British Columbia, FARM-TRACE empowers project supporters to delve into ALL aspects of the project’s activity since inception, including farmer info and tree locations. It has to be seen to be believed! As noted in the annual report, FARM-TRACE has now been rolled out in 8 other countries and is on track become an official monitoring approach under the Plan Vivo Foundation Carbon Standard, the oldest forest carbon standard in the world.

We met Roger Antonio Valladarez Garcia during our project visit in 2016, and below is his FARM-TRACE dashboard snapshot as of today. You can check out the full project at https://app.farm-trace.com/en/communitree/.

Overview of CommuniTree & COTAP

Learn more about the CommuniTree project at https://COTAP.org/Nicaragua and offset your CO2 emissions through this project here:

Cotapper Umair Kabani shares his enthusiasm for the Khasi Hills Community REDD+ Project

December 24th, 2020


Offset your CO2 emissions through Umair’s Khasi/COTAP campaign on GoFundMe. To receive a formal COTAP acknowledgement, please forward your GoFundMe receipt to donate at cotap dot org. If you prefer, you can offset through the Khasi project on COTAP.

 

 

As you can see, Umair Kabani has clear and infectious enthusiasm for the Khasi Hills Community REDD+ project! Umair is a Los Angeles-based startup entrepreneur, business coach, real estate syndicator, and connector. Earlier this year, he discovered that his ancestry includes the Khasi Hills in the northeastern Indian state of Meghalaya.

Umair’s research led him to COTAP, and he became so intrigued and inspired that he not only became a Cotapper and offset his personal emissions through the Khasi project, but he also launched a GoFundMe page to support it. As of December 24, 2020 his campaign has raised over $2,200 for the the Khasi Hills Community REDD+ project. Check out his video and you’ll see why!

More about the Khasi Hills Community REDD+ Project


The Khasi project is India’s first community-based REDD+ program, and one of the first REDD+ projects anywhere to be 100% owned, controlled, and operated by indigenous communities. Ten tribal administrative units called Hima represent 62 villages (with approximately 4,357 households) and collectively form the project’s governance and oversight council known as the Synjuk (or “Federation”). The Synjuk was legally established in 2011 as the Ka Synjuk Ki Hima Arliang Wah Umiam, Mawphlang Welfare Society (KKHAW-UMWS). The project is located in the East Khasi Hills District of Meghalaya and the Umiam River Watershed, which boasts one of the highest recorded annual rainfalls in the world.

Started in 2005, the project is now protecting and restoring 27,139 hectares of cloud forest, which in 2010 comprised approximately 9,270 hectares of dense forests and 5,947 hectares of open forests. 78% of the project’s emissions reductions over 30 years are expected to result from avoided deforestation through advance closure, cutting fire lines, distributing efficient stoves, and promoting alternative livelihood activities. The remainder will result from Assisted Natural Regeneration (ANR) performed on open forests in 1,500-hectare increments.

The project distributes benefits through its Community Development Grants Program, and the most frequent project type applied for is to improve water systems by installing tanks, building washing areas, and digging drinking water wells. The project successfully concluded its first 3rd-party verification in 2017 and its buyers include TUI Nordic Airlines, Arvid Nordqvist coffee, and Expedia, Inc.

The project operates in rural areas where firewood is the primary fuel source for cooking and heating, and the project’s purpose of reducing pressure on local forests through efficient stoves goes hand in hand with reducing wood smoke inhalation. The Khasi project’s multi-pronged effort to reduce fuelwood consumption includes distribution of electric rice cookers and liquefied petroleum gas (LPG) and a goal of ensuring half of the project area’s 4,400 households have an efficient wood-burning stove by 2020.

The Hima vote on how to distribute the project’s performance-based carbon offset earnings among villages. As an example, in 2015 68% of the 62 participating villages reported utilizing their community grants from carbon sales to improve their drinking water systems by installing wells, water tanks, and formal washing places. This was by far the dominant project type that year, as 100% of 8 recently-sampled water supply sites had confirmed the presence of coliform bacteria.

4 car donation case studies

December 1st, 2020

COTAP has partnered with CARS! Founded in 2003, CARS is a 501(c)3 nonprofit and respected leader in the vehicle donation space that has supported over 3,500 nonprofits. Learn more on our car donation page here.

The below case studies reveal that, on average, a COTAP vehicle donation counteracts 234.13% of the vehicle’s “tailpipe emissions” while generating $1,698.77 for our projects. Because all COTAP projects are certified by the Plan Vivo carbon standard, which requires that projects share a minimum of 60% of carbon revenues with participating communities, it follows that the average COTAP car donation creates at least $1,019.26 in earnings for some of the world’s poorest communities.

Case Study #1


On December 31, 2020, a donor from Fairfax, Virginia used CARS’ online form to pledge a 2004 Toyota Matrix with 110,096 miles on it. This donor stipulated that the net proceeds go towards offsetting evenly to all COTAP projects – in Nicaragua, Uganda, India, Fiji, Indonesia, and Mexico. The car was picked up on January 9th and on January 13thit was sold at auction for $2,200. Selling expenses were $130 for auction fees and $2.78 in miscellaneous costs. That left $2,067.22, 30% of which CARS charges as its fee.

On February 4th, COTAP received payment from CARS for $1,447.05. At our offsetting rate of $15/tonne, the donor is offsetting 96.47 tonnes to our partner projects, which will receive $217.06 each and $1,302.35 overall.

So, not only did this donor get rid of a car they no longer wanted/needed, they’ll also got a tax deduction (assuming they itemize!). Further, they’re addressing their unavoidable carbon emissions, helping to protect and restore landscapes all over the world, and creating income for rural communities.

Speaking of carbon emissions, the 96.47 tonnes offset compensates for 298.76% of the tailpipe carbon emissions generated by the donated car! Plugging the above 110,096 miles and 30 mpg (For mpg, we Google the model/year) into our calculator yielded 32.29 tonnes. In this example, the car donation is not only negating the tailpipe emissions for the original owner, but it’s also likely negating the tailpipe emissions for the remaining life of the car.

Case Study #2


On June 7th, 2020, a donor from Atlanta, Georgia called the above number and pledged to donate a 2013 Buick Encore with 190,879 miles on it. They stipulated that the net proceeds go towards offsetting with our Uganda partner project – Trees for Global Benefits. The car was picked up on June 10th and on June 18th it was sold at auction for $3,200. Selling expenses were $70 for towing, $50 for auction fees, and $2.78 misc. That left $3,077.22, 30% of which CARS charges as its fee.

On July 2nd, COTAP received payment from CARS for $2,154.05. At our offsetting rate of $15/tonne, the donor is offsetting 143.603 tonnes to our partner project in Uganda, which will receive $1,938.65.

The 143.603 tonnes offset more than compensates for the carbon emissions generated by the donated car. Plugging the above 190,879 miles and 25 mpg into our calculator yielded 67.18 tonnes. Again, this donation is negating the original owner’s tailpipe emissions as well as the tailpipe emissions for the remaining life of the car.

Case Study #3


On May 31st, 2020, a donor from Glendale, Arizona pledged to donate a 2012 Ford Focus SE with 168,537 miles on it. They chose for the net proceeds go towards offsetting evenly across all COTAP projects. The car was picked up on July 6th and on August 22nd it was sold at auction for $2,400. Selling expenses for towing, auction, and DMV fees etc. totaled $145.78, which left $2,254.22, 30% of which CARS charges as its fee.

On September 17th, COTAP received payment from CARS for $1,577.95. At our offsetting rate of $15/tonne, this donor is evenly offsetting 105.197 tonnes across all of our partner projects in Nicaragua, Uganda, India, Fiji, Indonesia, and Mexico. That’s 17.53 tonnes and $236.69 per project.

As in the first case study, the donor got rid of an unwanted car, got a tax deduction, and addressed their unavoidable emissions. What’s different this time is that they are not just protecting/restoring forests and empowering rural communities in Uganda… they’re creating those benefits all over the planet! Neither approach (one project vs. all projects) is better than the other, it’s just the donor’s preference on whether they want to focus their impacts in one region vs. “spreading the love.”

So, did this car donation offset fully compensate for 168,537 miles driven in a 2012 Ford Focus SE? We used 26 mpg, which is the lower end of the car’s fuel efficiency rating. The result? 57.03 tonnes. Similar to the first case study, this donation is not only compensating for the car’s tailpipe emissions for the original owner, but also for the tailpipe emissions for the remaining life of the car.

Case Study #4


On August 21st, 2020, a donor from Garden City, New York pledged to donate a 2005 Lexus RX 330 with 165,000 miles on it. They chose for the net proceeds go towards offsetting evenly across all COTAP projects. The car was picked up on August 25th and on October 27th it was sold at auction for $3,550. Selling expenses for towing, auction, and DMV fees etc. totaled $162.78, which left $3,387.22, 30% of which CARS charges as its fee.

On November 5th, COTAP received payment from CARS for $2,371.05. At our offsetting rate of $15/tonne, this donor is evenly offsetting 158.07 tonnes across all of our partner projects in Nicaragua, Uganda, India, Fiji, Indonesia, and Mexico. That’s 26.345 tonnes and $355.66 per project! Using the car’s average mpg rating of 22 miles per gallon, this car’s tailpipe emissions (from the original owner’s 165,000 miles) were 65.99 tonnes of CO2. By donating this car, the original owner compensated for 239.5% of the tailpipe emissions generated by driving it 165k miles.

In Summary…


The donor, CARS, COTAP, and our partner projects all come out ahead significantly and in ways that would not be possible without this very unique, meaningful, and symbiotic partnership!