How is blockchain transforming carbon credit space? Blockchain technology is relatively new but it is quite innovative.
It has all the capabilities to revolutionize the ways in which industries operate whether it is finance, automotive, healthcare, or insurance.
Blockchain technology is also used to develop games as well as other apps.
Without a doubt, using this innovative blockchain technology in any industry is the most effective way today to achieve a more sustainable and brighter future.
Therefore, more and more companies are integrating it into their day to day operations.
And, of course, blockchain is the underlying technology that runs cryptocurrencies.
It helps in investing in crypto and trading them to make some quick money.
Apart from trading and investing, blockchain technology also helps in crypto mining, a process to maintain the security of the network.
The association of blockchain technology and cryptocurrency is a mutually beneficial association where specific coins are designed to power blockchain such as Ether.
Therefore, the crypto industry uses blockchain technology to the hilt to make the best of the benefits that it offers.
Of late, environmentalists from all over the world are worried about the carbon emissions due to crypto mining that uses a lot of energy.
Even the companies are on the lookout to offset their carbon emissions and, once again, blockchain technology comes to the rescue.
It is revolutionizing the carbon credit space with its capabilities.
If you want to deal with carbon emissions and offset it you will need to know how exactly you can do it by using blockchain technology.
Fortunately, you are reading one of the best articles to know about it all.
How is Blockchain Transforming the Carbon Credit Space?
If you care about sustainability and the impacts of crypto on the climate then you should use blockchain to effectively offset carbon.
Blockchain technology, as you may know, is capable of recording information on it in a secure manner.
It is also known as a distributed digital ledger. Transactions are recorded immutably and are decentralized.
This means that the entire ledger is not held by a single computer.
The ledger is duplicated instead and is spread across a network that consists of hundreds of computers.
Every user can access it to validate a transaction before it is added to the chain.
This is called the Proof of Work consensus mechanism which makes it impossible to alter, cheat, or hack into the system to manipulate the transactions.
It is the same mechanism of this innovative technology that supports the sustainability efforts such as tracking carbon credit and offsetting them.
It is expected that individuals, companies, and governments wanting to have greater transparency regarding carbon credits will use this blockchain technology.
A Few Notable Blockchain Networks
There are few notable blockchain networks that provide an extraordinary way to monitor carbon credits and certify them.
In fact, there are even a few specific developers who have created blockchain networks that are capable of providing multiparty collaboration support with regards to the environmental impact of crypto and better sustainability.
If you have not already, consider implementing one of these following networks in your operation sometime in the near future.
Devvio – Uses Less Energy
If you are looking for a greener crypto that uses only a small part of the energy used by Bitcoin, this is the one that will meet all your expectations.
According to the recent review report of a third party on the performance of Devvio as a component of LCA or Life Cycle Assessment against ISO standards, the DevvX blockchain is found to use 3.5 billion times less energy than Bitcoin for each transaction.
Devvio is quite established and capable in supporting sustainability initiatives of the users and the companies that are looking to acquire carbon neutral status.
They have teamed up with organizations that produce carbon credits by using renewable energy and through tree planting projects.
Devvio has also launched an ESG or Environmental, Social, and Governance platform that is one-of-its-kind and is customized to meet all the needs of municipalities.
This project is called DevvESG product and allows towns, cities, and countries of the world to track carbon credits and ‘Scope 3’ emissions that are produced by a group of suppliers and vendors.
The DevvESG suite is used by the participating cities of the United Cities North America or UCNA such as Canada, Mexico, and the United States that are engaged in Sustainable Development Goal 11 initiatives.
Algorand – Accelerates Global Sustainability
This energy efficient blockchain will support and accelerate sustainability initiatives and smart contracts.
The unique thing about this blockchain is that it is carbon negative itself and is committed to offset carbon emissions.
The carbon neutral status was attained by Algorand in April 2021. It works with ClimateTrade in partnership to track carbon emissions.
This partnership has made it even easier for the corporations all over the world to access Algorand and use its services to track the carbon emissions and carbon offsets.
It calculates the carbon traces of a definite number of blocks on the blockchain and also facilitates the network to work out the corresponding amount of carbon credits.
This is called the ASA or the Algorand Standard Asset.
This ASA is then offset and locked away in a green treasury which helps the protocol further to be carbon negative.
Minting carbon NFTs:
Apart from the above, you can also mint carbon credits as NFTs or Non Fungible Tokens on a blockchain and trade them later on the same blockchain.
In addition to that, you can also verify the external carbon credits certificate, depending on the system.
This is what these two newer projects exactly aim to do. These two projects are not as well known as Devvio and Algorand but have created a unique impression within the blockchain sustainability space.
Treedefi – Useful Features
Treedefi is a token on the Binance exchange and not a separate blockchain. The primary objective of this project is to build a development platform to generate fees that will be used to plant trees.
The platform will then sell them in the form of NFTs which is referred to as #nftrees by Treedefi. According to the policy of the platform, one-third of the transaction fees collected by it are spent on planting trees.
The platform is very easy to use and offers a dashboard that is fun to use.
You can use this dashboard to buy or sell nftrees. You will also be able to view data regarding the carbon sequestration of each tree.
When you own a tree it will produce carbon tokens constantly which you can use to offset your own carbon emissions.
You are also allowed to sell these tokens to other companies who are looking to offset their carbon emissions.
This is a very secure place to trade your carbon credits and at the same time track and verify the location of the trees, the date of planting the trees, and other information that will help in proper identification.
Save Planet Earth – A Worldwide Carbon Sequestration Project
Often referred to as SPE, Save Planet Earth is another crypto platform that has even higher ambitions than Treedefi.
This venture is supported by an impressive and efficient team and also comes with a diverse variety of green technology qualifications.
The goal of SPE is to plant one billion trees and also develop a series of useful programs that will help in fighting against climate change and global warming.
Apart from forestation, a few of their other programs includes:
- Soil regeneration
- Renewable energy and
- Improved marine climate management.
However, the primary aim of SPE is to create a safer carbon credit marketplace that will help individuals and companies to offset their carbon emissions.
The market typically relies on their own investment token $SPE.
The revenue generated by this venture however is not limited to selling certified carbon credits but also from other different merchandise such as beach clean-up projects, tree products and several other unspecified initiatives.
It also has plans to build a tree-tracking app for corporate use and monitor their green canopy at their projects sites via drones and several other ambitious projects of diverse range.
They also have plans to build their own Save Planet Earth Chain or SPEC and Carbon Credit Exchange or SPEX.
These will be green and carbon negative blockchain that will allow verifying carbon credit offsets.
It will also help in making international money transfers at a much lower cost but with greater energy efficiency.
Though these initiatives are in their very early stages, the main idea is to build two levels of exchange.
First, it will perform as a carbon credit broker or an online store that will allow you to purchase carbon credits with $SPE.
Second, it will act as an open market for buying and selling carbon credits by the investors at their own price.
This arrangement believes that the price of the carbon credits will increase over time and therefore it has plans to generate dividends for every investment in $SPE from the renewable energy infrastructure projects in the real world.
The SPE has partnered with Phantasma since their blockchain is still in making.
This particular blockchain, as of now, offers smart NFTs that are carbon neutral.
It uses the carbon credit NFTs of SPE to be carbon negative with an anticipation to attract those particular developers who are interested in building a green blockchain.
With the huge scope of all of these initiatives and their impact on carbon emissions, it is expected that people will use these legit endeavors for offsetting carbon.
Blockchain and Sustainability
The blockchain networks can offer sustainability in several other ways as well which will help further in doing away with the effects on the climate due to carbon.
Several companies are harnessing this unique technology increasingly over the years to ensure that their operations are more sustainable.
For example the supply chains use specific and secure software that runs on the blockchain in order to monitor their operations.
This makes them more efficient and reduces wastage of energy.
Manufacturing companies can make their processes more streamlined with the use of blockchain to track raw materials right from its supply to the finished product on the assembly line.
This not only reduces the idle time for the machines and the factories but also reduces the wastage of materials and energy.
Blockchain technology can also be used by several companies to track materials and parts and use them in the manufacturing process more effectively to ensure zero waste production and circular economy.
They can also recycle or reuse material so that little or nothing goes to waste.
Apart from the above, blockchain technology can also be used for verification of sustainability certifications.
As it is in carbon credits, blockchain technology can also verify in a better way whether or not a material or the supplier is genuine and certified.
More importantly, blockchain technology can also help in tracking and distributing energy produced by renewable sources such as solar power and wind power.
This helps the power grids to meet the demands for energy more consistently which is quite difficult due to the variability of energy consumption and production by the renewable energy sources.
The extremely complex networks can now be simplified which not only helps in meeting the variable demands of energy but also helps in lowering the risks of brownouts and blackouts as well as store energy for large contingencies.
When the energy system is more efficient the cost of energy becomes less which makes renewable sources even more attractive.
In fact, merging blockchain with renewable energy usage and production is one of the most useful and productive sustainability initiatives.
This will make it easier, simpler, and more cost effective for companies genuinely looking to reduce their carbon footprints by creating goods and services in a more ethical and eco-friendly manner.
Ideally, it can be said that from the fundamental things such as offsetting carbon linked with shipping to more complicated actions such as tracking the greenhouse gas emissions of an entire supply chain, blockchain offers a credible, stable, secure, and verifiable solution.
Over time, using blockchain technology for verifying GOTS and other certifications will become a commonplace.
In addition to that, it will also be used by companies for generating more transparent and accurate environmental reports that will show a ledger of carbon credits and carbon emissions.
Since blockchain technology supports Decentralized Finance or DeFi networks, it will also help the sustainability projects in finding and managing funds which will be exceptionally useful for those companies with multiple stakeholders especially.
Attracting DeFi Entrepreneurs
With the use of blockchain technology and crypto, the carbon credit market seems to be booming and it has attracted a lot of big investors such as Mark Cuban as well as several DeFi entrepreneurs.
According to the Wall Street Journal report, there are several new cryptocurrencies to which millions of carbon credits are connected for greenhouse gas emissions.
The crypto proponents say that the combination of crypto and blockchain in the carbon credit market has resulted in more transparency to the credits.
This is stemmed from several different projects one of which is establishing renewable energy farms.
Several companies buy this energy directly from the producers to offset their carbon emissions but when these projects get a certification from a third party the credits can then be traded on an unregulated market.
There are several market participants such as Toucan and decentralized projects that allow the users to link their owned carbon credits to digital tokens called Base Carbon Tonne or BCT.
This token can be traded just like any other crypto coin on a crypto exchange.
Talking about BCT, according to the Wall Street Journal report, there are more than 17 million carbon credits tied to it.
It has a combined value of about a hundred million on the crypto exchanges, according to CoinGecko.
Add to that, according to an insider report, Toucan is working on overhauling a part of the voluntary carbon market by offering real time public records of the trades made along with the pricing information.
Users can track these trades and take credits to fund projects that are specifically designed to improve the climate.
There are several decentralized autonomous organizations such as KlimaDAO that runs a separate crypto asset Klima that people can buy and trade on the crypto exchanges as well along with the BCT tokens.
The DAO removes the BCT tokens from circulation by storing them in the green treasury.
There are more than 14 million of these tokens available as of now that cannot be used for carbon offsets.
The Wall Street Journal reports also states that the developers of Kilma, who are mostly anonymous, claim that the tokens help in fighting climate impacts by reducing the accessibility of carbon credits.
This eventually pushes the price of the tokens further up which, in turn, makes the carbon offsetting projects more lucrative and at the same time it also encourages additional creation of carbon initiatives that will eventually do good to the climate.
However, the skeptics believe that this way the Klima tokens can actually decrease transparency in the carbon credits markets, much to the contrary of the claims of its developers that these are fully transparent.
However, there is no doubt that several companies have put in millions of dollars into several carbon credit projects to help improve the climate.
Still, the results are not as high and good as expected because there is a bit of a learning curve and the anonymity is not optimal.
If these are effectively dealt with then the impact on the environment will be consequential.
Therefore, there is a lot of possibility for crypto and blockchain technology to transform and develop the sustainability landscape and be a useful aide for the companies to meet their climate change goals.
Technology advances very quickly and cryptocurrencies are also quite tempestuous in comparison to other investments.
Therefore, if you want to support and invest in sustainable blockchain projects make sure that you do your own research thoroughly before investing.
The carbon credit space is transformed by the use of blockchain and more and more people are attracted towards it.
However, as of now, it seems that there is a lot to be done in this aspect to make it easier to accomplish the grand ambitions of winning the race on the carbon credit landscape.
I have special interest in crypto and intend to help common people to gain knowledge about the digital asset as well as its potential. Follow Me at Linkedin.