According to the Financial Times in an August 28 article, carbon emitters are joining up with companies that can provide offsets.
“Last year, a British oil exploration company and a tech start-up joined forces on a project aiming to lock away untapped fossil fuel reserves in Greenland. The energy company, Greenland Gas and Oil, would not extract oil from an area on the east coast that it had exploration licenses for. Instead, it would monetize keeping the oil in the ground via a partnership with the tech company, Carbonbase, which works on offsetting carbon emissions”.
This idea went south. Greenland Gas and Oil wasn’t even in the queue to tap oil from Greenland. Greenland’s government had stopped issuing licenses, so they could not stop doing what they couldn’t do in the first place!
Besides, the two companies never agreed on how to structure their plans. Even worse, they aimed to sell NFTs (non-fungible tokens) [1] What about that?
Greenwashing!
“The attempt is just one example in a mass of tech ventures that hope to fuse concerns about global warming with the public’s interest in Web3 technology. A surfeit of start-ups have burst on to the scene this year, variously promising to “green” bitcoin, make NFTs sustainable and solve niggling problems in carbon markets once and for all.” (FT)
Blockchain saves the day.
” Now, advocates of the digital ledgers on which cryptocurrencies run and appear to be the solution to everything under the sun are interested in climate change. The goal of the Blockchain community is: “the creation of digital versions of existing offsets that are simpler for people to understand, more transparently priced.” But, the Crypto market is volatile and fueled by speculation.
A representative from Sylvera, a carbon offset rater, said to Time,
“If [carbon-offset] prices keep fluctuating as widely as some of the crypto assets have been fluctuating, that makes it difficult…to plan and develop carbon-reduction projects”.
Contrary to what most people think, Blockchain isn’t limited to the cryptocurrency industry and is uniquely positioned to help the market’s continued expansion by:
- Being a mechanism many industries can implement,
- making access more inclusive,
- enabling efficient transactions,
- optimizing workflows,
- streamlining multiparty processes,
- boosting accountability while minimizing disputes,
- opening new markets through asset tokenization.
Paired with carbon offset raters like Verra[2], and perhaps the banking industry, Blockchain technology could be the answer to a more transparent voluntary marketplace.
Because, as we said before, carbon offsets are here to stay.
[1] NFTs are non-fungible tokens that we can use to represent ownership of unique items.
[2] Standard setters such as Verra, rule carbon-reduction projects. Verra boasts on its website: 1829 projects, 979 million verified carbon units issued and the equivalent of 211 million cars taken off the road for a year.
The Analytical Wordsmith 