Tokenized Carbon Credits: Combating Climate Change with Blockchain
Tokenized Carbon Credits are carbon emissions avoided or removed from the environment. One metric tonne of carbon avoided or removed as a result of verification equals one carbon credit.
What are Tokenized Carbon Credits?
Tokenised carbon credits are carbon emissions that have been avoided or removed from the environment. One metric tonne of carbon avoided or removed equals one carbon credit. They are created by transferring carbon credits from voluntary carbon market registries to blockchain.
Carbon credits are often included in sustainability strategies as a tool for organisations to offset net greenhouse gas emissions. Non-governmental organisations (NGOs) and carbon industry bodies are developing independent criteria to verify these carbon credits and guarantee their integrity.
Tokenisation also contributes to the liquidity of carbon markets, a space based on over-the-counter transactions. The use of blockchain thus solves a number of problems inherent in traditional carbon markets: increased liquidity, access, transparency, price signals and data standardisation.
Rafael Haupt is the founder of Toucan, a Web3 regenerative finance protocol that allows people to put climate action at the heart of digital transactions. Toucan creates the infrastructure that allows carbon credits and affirmative action for the planet to be credited on blockchain, opening innovation and funding for meaningful climate action across the planet. Raphael holds a master’s degree in industrial engineering and management from the University of Berlin and the Toulouse Business School.