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.
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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.
