State and Federal

State and federal officials face significant challenges with regard to managing decarbonization and reducing waste pollution in their territories. Coordination with foreign and internal stakeholders is difficult and takes time. The lack of financial and human capital and technology resources often lead to inaction or overaction. Regulation, taxes and bureaucracy makes reducing pollution a significant burden to all participants. For lack of better options, many state and federal governments are building their own technologies in an effort to obtain waste pollution and carbon emissions data at the individual company level. While we understand the concern and applaud the effort, many of the mechanisms being introduced are neither effective or manageable long term. In order to demonstrate the value proposition that the Carrot Fndn and $CARROT bring, let’s review again two common trends.

First, existing Extended Producer Responsibility (EPR) mechanisms that utilize purchase receipts of recycled material as confirmation of recycling offsets, do not provide the foundation for a solution that is trusted and transparent and which can scale. EPR risks the same credibility shocks experienced in the carbon credits markets, both past and present. Fake receipts and inflating recycling waste volumes is common throughout the world. Receipts can be generated by multiple recyclers and even other processors for the same waste mass, creating situations of double and triple counting, if not more. Managing and tracking receipts becomes an insurmountable task. Furthermore, the purchase of a recycling receipt does not benefit the entire recycling supply chain equally. Value flows only to the final participant and doesn't trickle down to other contributors, causing both economic and social harm, especially in markets that depend on pickers. Financial resources flow first to the biggest operators, eliminating the possibility of competition, investment and innovation in the market. And, most critically, EPR based on recycling receipts don’t impact the fundamental issue, which is the sorting at the source of waste creation. The incentive structure needs to be designed to impact the Waste Generator.

Second, waste tracking is often managed centrally by using transport manifests that are signed by the waste generator, hauler and processor. The systems usually require using paper to ensure that cargo can be verified on route in situations without internet connectivity. Physically carrying manifests, obtaining signatures, and manually inputting data slows down logistics operations raising costs and hurting performance. These solutions were designed specifically for long hauling or shipping waste, not for local hauling such as door-to-door pick-up at the waste Generator level. But the critical breakdown occurs because while waste can be “tracked” from point A to point B, it cannot be tracked from point A to point C. In other words, it cannot be tracked from the Waste Generator all the way to a Recycler, usually passing through multiple Processors.

Third, combining Transport Manifest reports with Recycling Receipts to establish a transparent EPR market is too challenging from both the technical and administrative perspectives as highlighted above.

The Carrot Fndn proposes a different approach, using the latest Web3 technologies including cryptography, blockchain, digital assets and tokenization to not only track waste custody from Waste Generators to Recyclers in a fully digital and immutable manner (MassIDs,) but also integrate an ESG and EPR marketplace for companies to be able to purchase certified recycling credits (Tokenized Recycling Credits and Tokenized Carbon Credits) that are trusted and non-invasive to business operations (e.g. purchase receipts) and which are stored on a public blockchain, thus sharing the data with shareholders, customers, employees and regulators. The value obtained from the offset markets can then be returned using $CARROT tokens in a decentralized manner, directly to the verified participants in the recycling supply chain, dramatically improving the incentive structure for recycling and inducing the Waste Generator to sort properly.

Finally, working with DAOs and their community members is a new way of imagining how technology can be delivered to constituents because it can be done in partnership with them. As soon as $CARROT governance tokens are being distributed to constituents they will become part of the solution as they will ultimately become responsible for finding the best way to address the problem. Authorities will then be tasked only with creating good legislation and policies (such as supporting Pay-As-You-Throw programs and establishing minimum EPR and carbon offset requirements,) enforcing compliance with the laws (such as proof of recycling by Waste Generators) and making sure that the market is open and competitive.