As low carbon blockchains grow in popularity and presence we are seeing a wave of new blockchain-based environmental startups. Companies such as Veritree and Global Forest Watch are building blockchain-based tools for monitoring environmental impact on the ground. Meanwhile Brokoli and KlimaDAO are leveraging DeFi for the resale of carbon credits. Straddling both worlds are the likes of Toucan and our very own Likvid where tokenization is a way to set new scalable industry standards.
These innovations are not a moment too soon, as global warming is entering a critical phase. A 3°C world becoming our current most likely future and solutions are needed now to limit climate damage. But how can we be sure that new market entrants are making a positive impact and that it isn’t just hot air?
The presence of independent standards body Verra is key to supporting the growth of the industry. Founded in 2007 in Washington DC, and now operating around the world, Verra is a non-profit organisation that strives to bring quality assurance to environmental programs. It holds companies to their commitments, with real sanctions in the case of underperformance.
The crypto community, along with many others, has come to rely on Verra’s flagship initiative the Verified Carbon Standard (VCS) Program. This is the world’s most widely used voluntary greenhouse gas (GHG) scheme with over 1,700 certified member projects worldwide. The program has collectively removed over 877 million tonnes of carbon and harmful emissions from the Earth’s atmosphere at the time of writing.
An environmental project that meets the VCS program’s standards is capable of selling Greenhouse Gas (GHG) credits, also known as Verified Carbon Units (VCUs), each equivalent to one metric tonne of harmful carbon emissions removed from the atmosphere. These assets can be traded, retired or offset, to compensate for emissions elsewhere. So far 450 million carbon credits have been generated, that’s equivalent to just under 100 million cars being taken off the road for a year!
The offsets market
Verra also runs “carbon markets”, where businesses can go the extra mile by investing in credibly authenticated environmental work elsewhere. These projects can further offset an organisation’s impact, bringing them to a net-neutral or even net-positive status. This is made possible through the Verra Registry, a digital hub containing transparent information on certified projects, existing and retired offsets and an open market to trade units still in circulation.
With hundreds of thousands of companies coming to take carbon considerations seriously, offsetting has become a hugely popular method for companies to get greener. While more radical environmentalists have scoffed at simple offsetting efforts, offsetting is still very important work. With widespread adoption, offsetting could mean significant progress in our climate projections.
Leveraging Crypto-Environmentalism with Likvidi
Digital carbon markets are a growth market that Likvidi are paying close attention to. Companies entering this arena must combine an authentic environmental standard with a legitimate financial asset and create a vibrant market for it and that is only part of the heavy lifting. Prices, standards, lifespan, and secondary markets all need to be defined to a corporate standard. Likvidi is working hard alongside its partners to help bring that about.
Likvidi’s Carbon Platform will be a focus for that work, creating a green finance tool to trade, hold, and retire tokenized carbon credits from third party providers as well as Likvidi’s own token Liquid Carbon Credit (LCO2).
We believe that the financial markets will play a significant role in getting us to net-zero. The world is waking up to an enormous decarbonization challenge. Governments cannot do it alone, so we must ensure our voluntary market is fit for purpose and can scale rapidly.
Join Likvidi and make a positive change.