Carbon offsets have long suffered from a lack of credibility and transparency, but new digital technologies may hold the key to solving these issues. Digitising monitoring, reporting, and verification (MRV) processes through the use of satellites, drones, artificial intelligence, blockchain, and smart sensors can automate data collection, analysis, and validation, providing more reliable and consistent data at a faster pace. These technologies can reduce costs and time associated with issuing carbon credits and improve the accuracy of measuring emissions reductions or carbon storage. One example is CTrees, a platform using AI-enabled satellite data to calculate the amount of carbon in every tree on Earth, providing near real-time data to carbon market participants and policymakers. Another initiative, the Climate Action Data Trust, aims to link, aggregate, and harmonize data from major carbon registries to mitigate the risk of double counting. The platform, based on blockchain technology, will allow anyone to check whether credits have been double counted. The platform will enhance transparency and auditability in the carbon offset market. In response to these technological advancements, certification bodies such as Gold Standard and Verra, as well as the World Bank, are developing guidance, technologies, and standards on digital MRV. Verra is piloting a digital MRV platform that uses remote sensing to measure forest carbon, and it is comparing the system with its current approach to assess accuracy and compatibility.
Overall, digital tools and platforms have the potential to address the reputation problem of carbon offsets by providing more accurate, reliable, and standardized data and enhancing transparency and accountability in the carbon market.
ICE is preparing to introduce a futures market for carbon credits under CORSIA, which will focus on reducing airline emissions.
Intercontinental Exchange (ICE) announced plans to launch a physically delivered futures contract for carbon credits eligible for use by the...