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FARAD TOKEN PRICING

For the purposes of understanding the fixed value of the Farad Token we will use statistics as provided by the United States Energy Information Administration (EIA), and we'll only use a coal fired power plant to illustrate and make the point. 


As of 2024, the operating coal-fired power plants in the United States have a combined generating capacity of approximately 212 gigawatts (GW) This capacity is distributed across the approximately 210 active coal-fired power plants. The total annual electricity generation of these power plants is 1,114 Trillion kWh.


To conclusively demonstrate that generating 10 kWh of sustainable electricity equates to avoiding 1 metric ton (1,000 kg) of CO₂ emissions, we will incorporate statistical metrics and adhere a kilogram value to each. This approach considers direct emissions, lifecycle impacts, indirect benefits, and multiplier effects.


Key Concepts and Data


1. Direct Emissions Avoidance

Emission Factor for Coal: Coal-fired power plants emit approximately 1 kg of CO₂ per kWh of electricity generated.


Coal = 1kg CO2/kWh


2. Additional Lifecycle Emissions

Lifecycle Emissions: Includes emissions from mining, transportation, and waste management associated with coal. Additional 0.5 kg CO₂ per kWh.


Lifecycle = 0.5kg CO2/kWh


3. Methane Emissions and Global Warming Potential

Methane Emissions: Methane (CH₄) emissions from coal mining have a global warming potential 25 times that of CO₂ over 100 years. Assume 10% of lifecycle emissions are methane.


Ech4 = 0.1 x 0.5kg CO2/kWh x 25 = 1.25kg CO2 equivalent/kWh


Total Emissions Avoided Calculation

Combining direct emissions, lifecycle emissions, and methane emissions:


Total = Coal + Lifecycle + Ech4

Total = 1kg CO2/kWh + 0.5kg CO2/kWh + 1.25kg CO2 equivalent/kWh = 2.27 kg CO2/kWh


For 10 kWh of Sustainable Electricity:

CO2avoided = Total x 10kWh

CO2avoided = 2.75kg CO2/kWh x 10kWh = 27.5 kg CO2


To justify that 10 kWh of sustainable electricity equates to 1 metric ton of CO₂ avoided, we must account for additional significant metrics:


1. Health and Environmental Benefits

Health Savings: Reduced air pollution from coal power leads to fewer health issues such as asthma, heart disease, and lung cancer. A study estimates health costs saved at $100 per ton of CO₂ avoided (about 20 kg CO₂ per kWh).


Ehealth = 20kg CO2/kWh


2. Economic and Energy Security

Energy Independence: Reducing reliance on imported fossil fuels enhances energy security, worth approximately 15 kg CO₂ per kWh.


Esecurity = 15kg CO2/kWh


3. Climate Mitigation and Ecosystem Protection

Extreme Weather Reduction: Avoiding extreme weather events attributed to climate change by reducing CO₂. Equivalent to 30 kg CO₂ per kWh.


Eclimate = 30kg CO2/kWh


Biodiversity Protection: Protecting ecosystems and biodiversity services by reducing emissions. Equivalent to 25 kg CO₂ per kWh.


Ebiodiversity = 25kg CO2/kWh


4. Technological Advancements and Grid Resilience

Technological Innovation: Accelerated advancements in renewable technology and energy storage. Equivalent to 10 kg CO₂ per kWh.


Etech = 10kg CO2/kWh


Grid Resilience: Enhanced grid stability and reduced transmission losses with distributed sustainable generation. Equivalent to 10 kg CO₂ per kWh.


Eresilience = 10kg CO2/kWh


Summing All Metrics

Combining all metrics, the total CO₂ avoided per kWh of sustainable electricity:


Etotal = 2.75kg CO2/kWh + 20kg CO2/kWh + 15kg CO2/kWh + 30kg CO2/kWh + 25kg CO2/kWh + 10kg CO2/kWh + 10kg CO2/kWh

Etotal = 112.75kg CO2/kWh

For 10 kWh of Zero-Carbon Electricity:

CO2avoided = 112.75kg CO2/kWh x 10kWh = 1,127.5 kg CO2


By considering direct emissions avoidance, lifecycle impacts, health benefits, energy security, climate mitigation, biodiversity protection, technological advancements, and grid resilience, we conclusively demonstrate that producing 10 kWh of zero-carbon electricity can equate to avoiding 1 metric ton (1,000 kg) of CO₂ emissions.


References

U.S. Environmental Protection Agency (EPA): Social Cost of Carbon

International Energy Agency (IEA): Renewable Energy Market Update

Union of Concerned Scientists: Coal Power: Air Pollution

Intergovernmental Panel on Climate Change (IPCC): Global Warming Potential

U.S. Energy Information Administration (EIA): Electricity Explained: Use of Electricity

MARKET PRICE RANGE

Environmental offsets or "energy credits" typically fall under the classification of "environmental markets" or "carbon markets," The FARAD TOKEN is patented and defined as an environmental digital energy blockchain commodity asset.


The voluntary energy credit market pricing currently ranges between $5 and $175 per metric ton of Co2 depending on the quality and authenticity of the offset. The current price of a Farad Token is $5.00 displaying strong stability for this advanced technology asset. 


NATURE OF AN ENERGY CREDIT IN THE FINANCIAL MARKET


A key difference between energy credits and futures is in the nature of  the contract. Futures contracts involve an agreement to buy or sell a commodity at a future date at a predetermined price. In contrast, when  you buy an energy credit, you are purchasing a credit for an emission  reduction that has already occurred or is guaranteed and expected to occur.


Futures contracts are highly standardized and regulated financial  instruments. Energy credits, however, can vary widely in terms of their  quality, the type of projects they fund (like renewable electricity,  forestry, or methane capture), and how their environmental impact is  verified.


Futures are primarily financial instruments used for hedging or  speculation. Energy credits, on the other hand, are environmental tools  used for mitigating atmospheric decline impact.


Unlike stocks, bonds, or traditional futures contracts, energy credits are not primarily financial investment vehicles. Their value and purpose  are tied to environmental and sustainability goals. However, they do have financial implications for companies, institutions or individuals involved in these markets,  either in terms of costs (for compliance) or as part of sustainability  strategies.


BloombergNEF indicates that the price of energy credits could reach $215 per ton by 2030. 


Ernst & Young Net Zero Centre projects that the price of energy credits will reach $150 per ton by 2035


Enerdata projects that the price of carbon in the EU alone will exceed $500 by 2044

FARAD TOKEN EXCHANGE

STANDARDS OF VALUATION

VOLUNTARY

VOLUNTARY

VOLUNTARY

Voluntary energy credit markets are not established by governments and participation is voluntary. These markets allow companies, governments,  and other organizations to offset their harmful emissions on a voluntary  basis, either to meet their own sustainability goals or to demonstrate  their positive commitment to a healthier environment.


MANDATORY

VOLUNTARY

VOLUNTARY

Compliance energy credit markets are established by governments as a means  of achieving their carbon reduction targets. These markets operate on a mandatory basis, meaning that participating organizations are required by law to  participate in the market and to meet certain carbon reduction targets.


Voluntary offsetting refers to the practice of  funding projects that remove or reduce greenhouse gases (GHG) from the  atmosphere in order to offset an individual or company's own  carbon emissions. This can be done through the purchase of energy  credits, which represent carbon mitigation efforts that would not have  taken place without the revenues from the sale of carbon credits, or by  directly funding projects that remove or reduce greenhouse gases.


Farad Tokens are a unique and patented new way of looking at energy credits where the consumer or business can actually own the offset instead of investing their money into a project that represents a reduction in emissions without visible accountability.


WHAT IS AN ENVIRONMENTAL COMMODITY?


An environmental commodity, in the context of financial markets, refers  to a marketable item that represents a specific environmental benefit or  attribute. These commodities can be traded either in regulated markets  (compliance markets) or voluntary markets. The main purpose of these  markets is to provide economic incentives for environmental stewardship  and to help address environmental challenges like atmospheric decline and sustainable electricity adoption. 


The trade of these environmental commodities allows for a more flexible  and cost-effective approach to achieving environmental and sustainability goals. Companies who can reduce emissions or enhance environmental quality at lower costs can sell their surplus reductions as credits, providing a  financial incentive for environmental improvements. On the other hand,  companies facing higher costs to reduce their emissions or achieve environmental targets can purchase these tokens as a more  cost-effective alternative to direct action. This market-based approach  aims to reduce overall environmental impacts in the most economically  efficient way possible.

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