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Blockchain Tech Ensures Companies’ Claims Are Legitimate

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Blockchain Tech Ensures Companies’ Claims Are Legitimate

Carbon credits: With many companies getting on the carbon credit bandwagon to offset their pollution, how do we know if these projects are legitimate? By verifying their promises using blockchain, says Sarah BaxendelEcosystem Director, Regen Network.

In recent years, there has been an explosion of climate impact commitments from major corporations. Companies seek to take responsibility for the greenhouse gas emissions of their business operations. An example is the Microsoft Moonshot objective. This focuses on the company becoming carbon negative by 2030 and eliminating its historic carbon emissions by 2050. The goal is achieved by Microsoft by directly supporting carbon reduction and elimination projects through carbon credits.

Carbon credits are designed to remove excess carbon dioxide to balance global temperatures. But also, carbon credits make it possible to raise funds for ecological restoration projects.

Carbon credits: how do they work?

Projects that regenerate land and remove carbon dioxide from the atmosphere can sell carbon credits. Individuals and businesses can buy these credits and then withdraw them. This means that they counteract the negative ecological impact of their business activities.

The current system of carbon credits has been criticized in the past. There have been questions about their role in accounting. Greenwashing is when companies use carbon credits to avoid reducing their emissions. Additionally, ‘intermediate’ carbon credit registries have often been accused of having poor standards. And there are questions about the quality of some green projects that sell carbon credits.

If carbon credits are to play a major role in helping the world decarbonise, businesses and individuals must use them responsibly.

Carbon credits: Purchase and retirement

Traditionally, carbon credits are purchased from brokers on a deal-to-deal basis. This leads to limited price transparency. It takes extra time and effort to buy them. Market players can make huge profits, and the money from carbon credit sales sometimes doesn’t end up in the hands of the communities reclaiming the land.

Carbon credits: pensions are not transparent

Once purchased, carbon credits used to offset carbon footprints receive proof of withdrawal. This is on a piece of paper or on a PDF certificate. Information is rarely made public. Carbon offset claims cannot be easily audited.

Carbon credits: High project development costs

Extremely high project registration fees and other costs mean that only big players can afford to offer carbon credits. This can prevent local communities, indigenous peoples, small properties and small organizations from participating in carbon markets.

Old carbon registries have questionable standards

Centralized, institutional, and legacy registries do not meet the standards expected in other industries.

Carbon credits: How can blockchain help?

Blockchain-based carbon and green asset registries can solve many of the legacy problems of the carbon market.

-Blockchain technology provides direct access to the carbon credit market. This allows for more transparent pricing for project developers, land stewards and credit buyers. How? By removing third-party brokers. Examples include blockchain-based carbon markets like Regeneration network, Earthbenchand Moss.Earth.

-Blockchain enables a wider variety of carbon credits to be marketed to corporate buyers. This includes innovative new soil carbon credits, such as CarbonPlus Grasslands.

-The immutable data trail of blockchains like regeneration register allow both Ecological Impact Statements. Additionally, corporate carbon offset claims can be publicly audited by individuals, companies and governments. This ensures accurate and transparent global carbon accounting that meets the Paris Agreement.

-Web3 offers an open and public coordination tool. With it, communities can design and manage their own carbon credit standards. This is demonstrated by community management web3 credit origination systemslike Regen Registry.

-Blockchain carbon markets can be very liquid. This makes it easier to purchase in volume for the climate commitments of large companies and the development of new, innovative and yield-bearing financial instruments.

carbon credits

Looking forward to a regenerative future

The challenges of carbon offsetting are daunting. Innovations and market disruptions are needed to scale the climate impact industry and respond to the urgency of the crisis.

Bringing carbon markets to the blockchain has the potential to empower local communities. A web3 native blockchain based carbon market will allow anyone with access to a computer to participate in a global carbon market.

More efficient, liquid and transparent carbon markets are emerging on the blockchain. And more funds will go directly into the hands of the communities that manage our forests, rivers, oceans and fields. As the concentration of carbon dioxide in our atmosphere continues to rise, there is no time to waste.

About the Author

Sarah Baxendel is the director of the ecosystem, Regeneration network. Sarah is a social impact designer and carbon markets expert tackling climate change through places, products and programs. As Director of Ecosystem, she most recently led business development, brand, partnerships and product strategy for Regen Network. Regen Network is an application-specific blockchain community for global carbon accounting and offsetting. She is the co-founder, designer and founding executive director of Hilltop Urban Farm, the largest urban farm and first adult urban farm incubator in the United States. She led the design of the public master plan for more than 650 acres of urban parks and vacant land in the city of Pittsburgh.

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