Carbon credit platforms provide a means for companies to offset their carbon dioxide emissions by purchasing carbon credits that fund environmental and sustainable development initiatives across the globe. Carbon credit platforms bring together parties with surplus carbon capacity and parties with deficit carbon capacity. The global carbon credit trading platform market is expected to grow from $67 billion in 2022 to $200 billion in 2027. The potential for tokenization of carbon credits on blockchain is enormous, with the market forecasted to be worth $50 billion by 2050. Tokenization could lead to greater transparency and price discovery, as well as facilitate a common taxonomy that makes it more efficient for buyers and sellers to find the right credits. However, tokenization does not explicitly solve the quality issue, and criteria relating to quality must be established to codify genuine emissions reduction. Cloverly is a carbon credit platform that vets the quality of every project it lists and is continuously considering tokenization. Universal Carbon claims to be the world’s first tradable carbon token issued on a public blockchain. With so much innovation being applied to carbon credit markets, corporations have a rich panoply of options for pursuing climate action programs, while NGOs often serve as valuable connective tissue between organizations. Technology will play a critical role in bringing efficiency to the efforts of all stakeholders by creating mechanisms like carbon markets that create a bilateral flow of capital and information.
It is important that carbon credit schemes also benefit local communities.
The World Meteorological Organisation has stated that 193 countries have given unanimous backing to a scheme to monitor global greenhouse...