UC Santa Barbara

The intersection of climate finance and technology has grappled with persistent inefficiencies, lack of accountability, and an uneven distribution of resource ownership and decision-making power, often favoring solutions in the Global North. To address these pressing issues of current climate finance approaches, namely carbon markets, blockchain and Web3 technologies have emerged as potential remedies, sparking the growth of a nascent subsector called Regenerative Finance, or ReFi. On top of technological promise of Web3, this ReFi community promotes the ambitious ideals of regenerative economics and aspires for a systemic change. This research delves into the growing community of ReFi consisting of climate-focused organizations and individuals utilizing Web3 technologies ‘for good’. To explore this landscape, I employ a combination of literature review, digital ethnography, and interview analysis. The research questions guiding this inquiry are: a) How does the emerging Regenerative Finance (ReFi) community define itself and envision the future of climate finance? b) How is the ReFi community getting institutionalized? By analyzing ReFi’s conceptualization and institutionalization, I find that even though this community believes that Web3 technologies could enhance climate finance in meaningful ways, the members of the ReFi community have differing views on what the concept of ‘ReFi’ means. Some, who favor conceptual and ideological approaches based on regenerative economics, envision ReFi as a cultural activist movement. Others, who see ReFi as a technological tool for carbon market efficiency, define ReFi as a new iteration of climate tech and impact finance. This clash suggests that the ReFi community has not achieved a cohesive level of institutionalization across regulatory, normative, cultural-cognitive pillars. Nevertheless, there are several empirical top-down and bottom-up indicators of partial institutionalization in the normative and cultural-cognitive systems. The ReFi community is also getting institutionalized as an organizing vision around Web3 as a technological artifact. The community faces a number of challenges, such as public perception problem due to shared framing with Web3 and ‘crypto’, market centrism, lack of clear regulation resulting in lack of legitimacy, as well as gaps in representation and diversity in institutional construction. Overall, this analysis provides broader implications of the role of new digital technologies in climate finance institutions and raises questions about practical application of regenerative systems in the current neoliberal economy.