Concerns about Carbon Credit (Emission and Offset Rights) Tokenization

There are varying opinions about tokenizing carbon credits (emission and offset rights) using blockchain technology. One view is that tokenization may not be significantly relevant to the future of the carbon market. However, the majority of market stakeholders believe that the tokenization of carbon credits will be central to market growth.

Notably, Verra and Gold Standard discussed incorporating blockchain technology into their registries throughout 2022. The International Emissions Trading Association (IETA) published basic principles on tokenization, and the World Economic Forum (WEF) initiated a Cryptocurrency Sustainability Forum. Additionally, the International Financial Corp, an affiliate of the World Bank, has publicly supported blockchain-based platforms for expanding the carbon market. This indicates the current need for transparency and reliability in the carbon market, and market efficiency is a key to achieving carbon neutrality.

All market activities, from measuring to managing, operating, and trading carbon emissions, will be transparently provided to all market participants through distributed ledgers, ensuring the reliability of all data. This signifies sustainable growth in the carbon market.