Asset tokenization is a new use case for Web3 technologies that involves representing physical assets, such as real estate, bonds, and gold, on-chain. Tokenized assets offer benefits such as increased liquidity, reduced fraud risk, and transparency, and can enable fractionalization and trade. This technology holds great potential for climate assets, like carbon credits, which have yet to become their own asset class due to market inefficiency and exclusivity. By creating a transparent market infrastructure with prices and credit provenance, tokenized carbon credits can increase participation across the spectrum and become the foundation for mass adoption, making it the primary asset of the Regeneration Finance movement. Renewable energy credits, unexploited land, and reforestation and preservation projects are other climate assets that can be tokenized. Tokenized climate assets provide corporations with a new way to fund reforestation and preservation projects by purchasing tokenized credits without the need for a broker. Tokenized credits can also be sold on the open market, allowing corporations to claim carbon credits and fund climate initiatives. The UAE has recently announced 2023 as the ‘Year of Sustainability,’ and Dubai is hosting COP28 in November, which is expected to be the biggest and most action-oriented gathering to date, where stakeholders from across the globe will come together to focus on climate impact. Climate asset tokenization can lower the barriers to access and incentivize climate impact while corporations can step up to demonstrate the impact and support climate initiatives. This new technology will play an important role in the shared quest to confront the environmental crisis and start healing the planet.
Source link
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...
