Improving Data Quality and Accessibility for Carbon Credits: Core Carbon Principles
The opaque, inaccessible nature of the voluntary carbon market is widely documented, and it leads to ongoing issues of trust, which impacts the market’s ability to drive effective climate action. Improving the quality and accessibility of carbon credit data is key to tackling this issue.
The Core Carbon Principles (CCPs), released in spring 2023, outline that all carbon project data should be recorded on a tamper-proof registry and transparently communicated. CDR.fyi’s recent progress report on permanent carbon removal solutions, created using open-source industry data, embodies this standard.
Integrity Council Launches Core Carbon Principles
The Integrity Council for the Voluntary Carbon Market (ICVCM) has launched the highly anticipated Core Carbon Principles (CCPs). These principles define a common understanding of what makes a high-integrity carbon credit.
Blockchain Technology and Trustworthy Registries
The role of blockchain in making registries and record-keeping more trustworthy, open, and efficient is gaining mainstream acceptance across different industries. Digital technologies will play a key role in increasing data availability and transparency in the voluntary carbon market.
Real-world carbon credits can be moved onto the blockchain through tokenization, a process that represents real-world assets as digital tokens. Respected organizations like the World Bank, the World Economic Forum, and Rocky Mountain Institute have released reports outlining the benefits of tokenization for voluntary carbon markets.
Addressing Critical Problems with Technology
Rocky Mountain Institute & Climate Collective explore how technology can address project and data integrity in the voluntary carbon market. Key points are summarized.
Tokenization: A Deep Dive
Tokenization refers to the process of representing real-world assets, such as stocks or carbon credits, as digital tokens on a blockchain. The primary goal is to make their data more accessible, efficient, and secure. Traditional financial firms are embracing blockchain technology for its potential in backend infrastructure. Tokenization of carbon credits offers benefits such as greater access, reduced trading costs, and improved market efficiency.
How Blockchain Scales Climate Action
Toucan Protocol and the World Economic Forum research how blockchain technology is unlocking ways to create a more transparent and efficient carbon market.
The Case of Carbon Credits
Credits that move onto the blockchain are stored in a tamper-proof, publicly accessible, decentralized registry, ensuring high data verifiability. Tokenizing carbon credits leads to market benefits such as transparent pricing, greater liquidity, and auditable projects.
Tokenization: Bringing Climate Action to Scale
Tokenization offers high verifiability through transparent and immutable record-keeping and the democratization of market access. Applying this innovation to carbon markets holds great potential to bring climate action to scale by 2050.
Toucan is building technology to unlock climate action at scale. Their digital infrastructure helps grow the voluntary carbon market in a transparent and high-integrity way by bringing environmental assets onto the blockchain.