Climate change has created a rapidly growing global market for a digital eco-commodity called carbon credits. Current estimates value these carbon markets at over $100 billion annually. A carbon credit represents one metric ton of CO2 and is connected to efforts to reduce carbon emissions that cause climate change.
Carbon markets are one of the best tools that companies and policy-makers have for reducing carbon emissions, putting a value on a ton of CO2 so that markets can get to work creating price signals for reducing emissions. Various initiatives over the years have created a global patchwork of carbon markets that are now looking to interconnect as part of the UN Paris Agreement.
The UN Paris Agreement to combat climate change was agreed in 2015 and became operational this year. One of the cornerstones of the Paris Agreement is the ongoing creation of carbon markets within and between countries. All of these interconnected systems will need to rely on the transparent and accurate accounting of carbon emissions and carbon removals at the national and regional level. At the subnational level, companies will also need to account for their carbon emissions. It’s no wonder that blockchain solutions are being heavily discussed to make the Paris Agreement and future carbon markets operational.
Early carbon markets started in 2005, but they have been mainly used by governments and large companies in Europe and the United States, and most of the deals are over the counter or on centralized regional exchanges.
There have been a few groups announcing projects in the past to tokenize carbon credits, but 1PLANET is currently the first to launch with a functioning DApp that allows users to immediately utilize ERC-20 tokens to mitigate or “offset” their carbon emissions.
“Combining a digital commodity with a digital crypto-token makes a lot of sense. We see blockchain and smart contracts as the future of…