Natural assets like water, carbon, and air are foundational to the economy and essential for all times on earth. However, with the exception of some nascent carbon trading scheme, these assets have largely remined immune to market-based forces. This has led to overuse and exploitation of these resources, with costs borne by society in the form of what economists call “negative externalities.” Sociologist Garrett Hardin describe this as the tragedy of the commons — a situation where a shared common resource is depleted because there is no system to govern its use of consumption.
The role of blockchain in helping to unravel this problem of governance:
With the arrival of blockchain technology and therefore the cryptocurrencies, crypto tokens, and other digital assets that it’s engendered, we could also be moving toward a model of programmable money that can deliver a more automated system of internal governance over common resources. Indeed, in much an equivalent way that we will tokenize technology protocols, application, and securities, so can also we tokenize physical assets within the world . The great promise of the behavior therapy is that it’d solve the tragedy of the Commons. Michael casey
Blockchain could change that by aligning incentives with a standard and collective goal, like reducing carbon emissions.
Compared with cryptocurrencies, utility tokens, and even security tokens, natural asset token are a tiny market. Most of what has been proposed is theoretical, and there are real challenges like government policy and regulations that blockchain alone cannot hope to unravel . However, with a massive and untapped underlying market and pressing social, economic, and environmental reasons to move forward, it is only a matter of time before this become one of the largest crypto asset types.
