The Importance of Carbon Credits in the Green Crypto Market
What is a Carbon Credit?
Historically, a carbon credit allows its owner to produce a certain amount of carbon emissions. The purchase of one carbon credit allowed a company to emit one ton of carbon. This system, however, is receiving widespread criticism. This is partly due to the fact that there are widely documented incidents of accounting fraud and double-counting. The money used to purchase a carbon credit generally funds emission-reducing efforts. Carbon credits allow for polluting companies to continue operations, but also take measures to offset their harm. In 2021 the global economy used 17.7 Terawatts of energy and emitted 36.4 billion metric tons of carbon emissions that are harmful to the environment. Fossil fuels still supply 84 percent of world energy. Carbon credits are a tool used worldwide to reduce emissions and reward energy efficiency. They are essential to creating a world of net-zero carbon emissions. The crypto revolution offers an opportunity to transform the system of carbon credits in a positive way.
Benefits of Blockchain
Moving the carbon credit system onto the blockchain provides several benefits. Blockchain can create a more transparent carbon market. Watchdogs will be able to track claims of carbon neutrality directly to the source. The purchase of carbon credits will become a transparently priced and highly liquid market. Oftentimes, carbon credits in the form of NFT’s hold data about a specific project to reduce the carbon emissions that it represents. The transparency of carbon credits on the blockchain creates an opportunity for carbon credits to be bought and sold similar to stocks, bonds, or cryptocurrencies. For instance, some carbon reduction projects are more effective than others, so this may reflect a carbon credit’s price. A goal of the ReFi (regenerative finance) movement is to create an open marketplace for buying and selling carbon credits. This will replace the outdated, inefficient system in which companies or governments buy carbon credits through complicated measures such as direct partnerships with project developers and complicated broker deals. Although certain roadblocks do exist, the opportunities of blockchain to transform the system of carbon credits are substantial. In 2021, the Global Voluntary Carbon Market (VCM) reached a new market value record of over one billion; it is expected to reach 50 billion USD by 2030.
Greeneum Carbon Credits
The Greeneum platform has created a unique solution to the challenge of moving the carbon credits marketplace onto the blockchain. For every megawatt-hour generated, Greeneum rewards users with Greeneum Carbon Credits. Those participating in the Greeneum ecosystem are generally companies that produce renewable energy. The producers that receive Greeneum Carbon Credits can be sold on the open marketplace and exchanged for GREEN Tokens or trade for other cryptocurrencies (or fiat currencies). This platform encourages both producers and consumers of green energy to engage in the buying and selling of carbon credits which can easily be regulated on the blockchain.
