---
title: a carbon currency is not a forest
canonical_url: https://ensurance.app/guide/a-carbon-currency-is-not-a-forest
markdown_url: https://ensurance.app/guide/a-carbon-currency-is-not-a-forest.md
subtitle: money can be based on a living system. it should not be backed by a claim on the trees
category: philosophy
---

# a carbon currency is not a forest

*money can be based on a living system. it should not be backed by a claim on the trees*

The forest exists whether or not anyone mints a coin. It stored carbon before the first registry opened, and it will keep storing carbon, holding soil, and feeding a river long after the last tonne is retired. Any money that calls itself a **carbon currency** has to answer one question first: what can the unit call?

If you are evaluating one — as an allocator, a treasury, or a procurement desk that has been offered something more durable than a credit — this post gives you the vocabulary to sort the field. It is a short field. Most of the ideas in it are older than the carbon market.

:::johnson
**a currency can be based on a forest. it should not be backed by one.** Backing is a claim that can be called. Based-on is a foundation no holder can call. The difference decides whether the forest stays off the table.

[what else is on the table →](/guide/alternatives-to-carbon-credits)
:::

## what a carbon currency is

### what is a carbon currency?

A **carbon currency** is a unit of money that is meant to move because carbon, or nature more broadly, is the ground it stands on. That is the whole distinction from a credit. A carbon credit is bought once and retired once; its job ends the moment a company counts it against an inventory. A carbon currency is designed to keep circulating — to be earned, spent, held, and spent again — with the living system as the thing that gives it weight.

The idea is older and wider than the tokens now carrying the name, and each version answers the ownership question differently.

## the cousins, one sentence each

Four designs recur whenever someone tries to build money on a living system. None of them is a carbon credit, and none of them is ensurance.

| design | the idea in one sentence |
|---|---|
| **Gesell / demurrage** | Silvio Gesell argued money should lose a little value the longer it sits, like the goods it buys, so that it circulates instead of hoarding. |
| **WIR mutual credit** | WIR Bank in Switzerland has run since 1934 as credit that small businesses issue to each other against real trade, and usage rises when franc liquidity dries up. |
| **Commons reserve currency** | James Quilligan's proposal issues money bioregion by bioregion from a measured index of ecological regeneration, so the supply is disciplined by the land's recovery rather than by a central bank. |
| **Minted-from-nature coins** | Single.Earth describes MERIT as a currency minted from nature — forest carbon and biodiversity data become tokens, landowners keep title, and in their framing the token is not a lien on the forest. |

Each of these does something a credit cannot. Demurrage moves money. Mutual credit keeps it inside a real economy. A commons reserve ties issuance to recovery. A minted coin turns ecological data into a spendable unit. Concede all of that.

The first two never touch the land, so the question below is not theirs. It belongs to any unit that points at land or at tonnes — a commons reserve, a minted coin, a carbon currency, or ours: what can it call?

## the assignat lesson

Revolutionary France seized the Church's lands and, from 1790, issued the **assignat** — paper that could be spent buying those lands. Issuance outran the land behind it, war finance printed more, and by 1796 the paper was close to worthless. Two lessons sit in that history. Backing you cannot redeem is a story. And backing you can redeem, when the backing is land, ends with the land sold.

That second lesson is the trap inside the phrase **nature-backed currency**. It sounds pro-nature. But backing is a collateral relationship. If a unit is genuinely backed by a forest, then the forest is what gets called when holders want out — a secured claim on the forest, with better branding.

## based on, not backed by

The distinction that decides everything is two words.

| | backed by | based on |
|---|---|---|
| **what it implies** | A redemption claim on the underlying; the holder can call it | Nature is the foundation the system is grounded in; the unit adds no claim on it |
| **historical model** | Gold standard, secured debt — collateral that can be taken | Endowment, perpetual trust, glebe, inalienable commons — a corpus that stays whole |
| **what happens to the forest** | Put on the table: exposed to debt, rent, forced sale, land-use change if the claim is called | Kept off the table by the instrument: never pledged to it, never sold to satisfy it |
| **what circulates** | The claim on nature | The instruments; circulation funds the base |
| **failure mode** | Claim called, living asset sold | The instrument can fall to zero; the forest is not what pays it out |

**Backed by** points a claim at nature. **Based on** points the money at nature's protection and adds no claim of its own. The forest stays off the table. Instruments circulate.

### what is a nature-based currency?

A **nature-based currency** is money grounded in a living system without holding a claim on it. The ecosystem is the corpus — the reason the unit exists and the thing its circulation funds — but no holder can redeem the unit for the ecosystem or any piece of it. If the unit has a floor, that floor is designed to run against flow: the yield of the place, a pool, a standing bid. Never the land. A currency where redemption runs against the land is nature-backed, and the two are not the same thing.

### can money be based on a forest without claiming the forest?

Yes, if the design holds two tiers apart. At the corpus tier the currency adds nothing to the forest's title: no lien, no pledge, no right to sell. At the instrument tier the units carry value, trade, and — where a redemption path exists at all — redeem against what the place produces or against a pool, never against the place. Both must hold. Drop the first and you are back to collateral. Drop the second and the unit's only exit is the market, which is honest as long as nobody calls it a floor.

## where ensurance sits

[*Ensurance*](https://ensurance.app/?from=guide) is based on living systems. It is not a tonne, and it is not collateral.

A **coin** ([general ensurance](https://ensurance.app/?from=guide)) is protocol-wide currency whose trading funds protection across the whole book. It has no redemption desk; you leave through the market. A **certificate** ([specific ensurance](https://ensurance.app/specific?from=guide)) is 1:1 with a named place — one agent, one living system — and funds that place's present condition. Certificates are designed to redeem against flow or a pool, never against the place, and that pool is not switched on today. Neither instrument is fungible with a carbon credit. Neither is sold as neutrality. Neither gives its holder a claim on the parcel, the trees, or the water. A carbon credit is not a forest either, and that argument is made elsewhere: [a carbon credit is not a forest](/guide/a-carbon-credit-is-not-a-forest).

Two honest limits. Ensurance adds no claim on a place; it does not clear the claims already on it — a landowner's existing mortgage stays a mortgage. And **entrust**, the state where the land itself is held under an easement or a trust and free of rent, debt, and claims, is an end state that only a titled policy reaches. A line on a place funds its condition. It does not by itself change the title.

So when the coin circulates, the forest does not move. When the certificate changes hands, the peatland is not re-pledged. That is why the honest name for this is not nature-backed.

We are early and the volumes are small — live agents, live certificates, a book that is a fraction of what a compliance desk moves in a week. The claim is not liquidity. The claim is the shape of the hold.

## the two questions to ask any currency

If you are offered a carbon currency, or a nature-based one, the diligence fits on one line: **what is it based on, and what can it call?**

If it can call the forest, it is a secured claim on the forest, and you should read it as one. If it can call nothing but flow, and adds no claim to the place beneath it, then it is money based on life, whatever else you decide about the price.

Most of the real alternatives to a carbon credit are not currencies at all — public finance, insetting, contribution claims, beneficiary-pays bonds, nature shares. The survey is here: [alternatives to carbon credits](/guide/alternatives-to-carbon-credits). Ensurance is the row we know how to hold. It is not the only row.

Why the other rows keep leaving the place unpaid is a separate argument: [capital doesn't invest for nature](/guide/capital-doesnt-invest-for-nature). To see what a hold on a named place looks like today: [specific ensurance](https://ensurance.app/specific?from=guide). If you are structuring capital around the based-on design, [start here](/solutions/investors?from=guide&topic=carbon-market-alternatives).

The forest exists whether or not anyone mints a coin. Money that respects that fact stays out of the forest's way. Money that does not will eventually come for it.

## sources

[WIR Bank](https://www.wir.ch/) — Swiss mutual-credit cooperative operating since 1934

[James Quilligan — a commons-based architecture for climate finance](https://kosmosjournal.org/kj_article/position-paper-a-commons-based-architecture-for-climate-finance/) — commons reserve currency proposal

[Single.Earth — MERIT token minting](https://www.single.earth/blog/merit-token-minting-started) — the minted-from-nature model in its own words

## the series

[what a carbon market actually is](/guide/what-a-carbon-market-actually-is) — the pillar

[alternatives to carbon credits](/guide/alternatives-to-carbon-credits) — the survey

[insetting is not an offset](/guide/insetting-is-not-an-offset)

[what beyond value chain mitigation actually is](/guide/what-beyond-value-chain-mitigation-actually-is)

[a carbon currency is not a forest](/guide/a-carbon-currency-is-not-a-forest) — this post

[what a carbon fund actually buys](/guide/what-a-carbon-fund-actually-buys) — the offer