Green finance needs voluntary carbon markets that work

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As demand for carbon neutrality grows, blockchain technology and smart contracts can allow carbon credits to be used in innovative ways and create demand in the overall voluntary market argues janeathomason.

“Blockchain technology has enormous potential for climate action. This is only the case, however, when the right safeguards are in place to ensure environmental integrity. Web3 applications can be part of the climate solution, but they have to be designed and applied in the right way.

Building carbon credits as a viable asset class by providing predictable returns on investment and including value protection for buyers and sellersClarity on taxation exemption of carbon credits, moving from “polluter pays” to “polluter invests” and full price discovery goes to the green owners on the ground taking direct climate action on their behalf.

Kishore Butani of the Universal Carbon Registry in India pointed out, “Merely taking carbon credits on-chain does nothing for price discovery. It’s worse when the broker and middleman buy cheap and create tokens as we’re seeing currently, totally cutting off the project owner in the ground.

“Can we learn from Bitcoin and price all mining years equally and make the entry into the VCM affordable to the rural poor in developing countries and stop diverting carbon finance to projects in Annex 1 countries? These countries are obligated to go green, my India isn’t.”This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.

The views, thoughts and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.is the chairperson of Kasei Holdings, an investment company specializing in the digital asset ecosystem. She holds a Ph.D.

 

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