Creating carbon credits on Blockchain might be one of the most critical climate change innovations of recent times.

‍

Blockchain is the world's first genuinely public network and a revolutionary answer to humanity's most significant problem because of how it works.

Unlike any other value transfer system, it lets you send and receive value to and from anyone in the world transparently, using nothing more than a computer and an internet connection.

The lack of any corporation in between means it is the world's first public digital payments infrastructure. It is available to all, not owned by, controlled or requires any intermediary.

Arguably the worlds greatest public good is the environment.

No one owns it, but it benefits or endangers us all collectively. Carbon dioxide knows no borders, nor do the impacts of global warming.

Not moving fast enough

I firmly believe that when properly utilised, carbon markets play a critical role in decarbonising the world. However, the current carbon market is inefficient, analogue and unable to function at the speed and transparency required to be effective.

“If implemented correctly, carbon markets could both accelerate action to combat climate change. But despite their ability to unlock billions of dollars annually for climate action, these markets are not currently scaling up quickly enough.”¹

‍

Collecting data to create carbon credits involves people to manually check projects, with much of the data from projects being estimated or sampled rather than directly and digitally verified.

An analogue Carbon Market causes several issues:

• A lack of transparency
• Long periods between accepted projects and credits being deployed for sale, sometimes two years.
• The issue of double counting and or double spending of credits.
• A slow and illiquid marketplace, with trades being manual and through intermediaries that often charge premiums of more than 80% that the green projects never receive (see the report by Greenpeace here )‍
• Ultimately leading to trust issues and, therefore, lower prices and demand than is possible.

Unless you have been avoiding the news in the last 9 months, you will be aware of the seismic impact that KlimaDAO has had on the traditional carbon market, bringing more than 22 million tons of carbon on chain since November last year, making headlines across the globe.

The tons were bridged on chain, where credits were retired in the carbon registries, and tokenised via bridges, in this case primarily via Toucan Protocol.

However, you probably also caught that Verra, the worlds largest voluntary carbon registry, released the following statement in May of this year:

"Verra will, effective immediately, prohibit the practice of creating instruments or tokens based on retired credits"²

CLNK is fast, automatic, transparent

So imagine combining the world's greatest public good with a mechanism for green funding of projects, reducing emissions and the world's best public network. A system that automatically creates carbon credits live from project to market in thirty days.

Our team at CLNK has developed an entirely digital automatic solution from the project to the buyer that creates trusted tamperproof data at the live project source. The data is verified digitally to ensure it is not a direct copy of previous data and sent to a panel of experts to comment on or verify within thirty days. After thirty days, the tons are issued as Non Fungible Tokens (NFTs) on Blockchain for the project developers to sell to anyone.

We have 8 years. “It’s ‘now or never’ to limit global warming to 1.5 degrees”³

NFTs are impossible to duplicate; therefore, double spending is impossible. All the data in the Carbon Credit NFTs can be verified and traced back from the project source to the ultimate owner/holder or who burned and offset the tons permanently, claiming the retirement.

Blockchain and NFTs have been in the news for harming the environment; that's why CLNK runs on Polygon, the impact of one an NTF on Polygon is equivalent to sending one email (credit KlimaDAO).

Blockchain native carbon benefits all participants: Project developers have access to quicker financialisation of their projects and, due to the lack of intermediaries, can charge higher prices for their tonnage. Consumers have better access to the carbon market and more transparent credit information—the carbon market benefits from better price discovery, easier traceability and improved trust.

‍

Sources

1. Making Carbon Markets Work for Faster Climate Action, March 26 2021 The Nature Conservancy
2. Verra Addresses Crypto Instruments and Tokens, 25th May, Press release
3. UN climate report: It’s ‘now or never’ to limit global warming to 1.5 degrees April 4 2022, United Nations