We’re Fixing Carbon Credits: The CarbonABLE Method
CarbonABLE trades premium carbon credits in a market undergoing a lot of criticism: how have we bypassed all the weaknesses of carbon credits?
Carbon credits won’t stop climate breakdown…
But we know they can help. The voluntary carbon market (VCM) offers huge potential for sequestering carbon in green or blue carbon sinks, and restoring balance to the planet’s carbon cycle. But…there are a lot of flaws with the market as it is. Double counting, leakage, impermanence, lack of transparency, greenwashing?!? We hate that these are business as usual in the VCM. And at CarbonABLE we’re going to change that!
The carbon credit market has too many problems…
Kind of like web3, the VCM does not have any one governing body. Because of this, there are a lot of low-quality carbon credits out there, and companies can use these to commit greenwashing. For instance, results from analyses of the two largest global offset programs — the Clean Development Mechanism (CDM) and Joint Implementation (JI), show that potentially 60–70% of the offset credits may not be linked to viable GHG reductions¹!
Here is how we treat each problem in the VCM and why our solution will take our holders to the sky:
But what about baseline emissions?
Baseline emissions are emissions that would be released if the decarbonization project did not exist. In 2018, there was a scandal in the EU because European Commission scientists found that numerous car manufacturers were inflating the baseline emissions. By doing so, they made it seem like the project would save more emissions than in reality it was capable of.²
CarbonABLE only works with projects that have stringent baseline policies and methodological requirements for calculating baseline emission data. We are sure of the baseline emissions before we take on a project. We know that these stringent projects are more and more in demand, so we know that they’ll bring an even higher value to our NFT holders.
But what about impermanence?
Natural disasters, illegal logging, forest fires, political corruption. All of these are permanence risks that may cause a decarbonization project to disappear. Take forest fires in the US: companies like Microsoft and BP are big funders in the US-based forest preservation carbon credits. Yet, as fires swept across the country in 2021, Elizabeth Willmott, the carbon program manager at Microsoft lamented, “We’ve bought forest offsets that are now burning.”³
At CarbonABLE, we know that there will always be an impermanence risk when it comes to nature-based carbon credits. With our partners, we only select projects that have passed a thorough risk assessment. To keep things clean, if a project experiences a natural disaster and the carbon credits are no longer viable, we retire them straight away. We don’t cheat with carbon.
But can you even trust these credits to do what they promise??
Transparency is a huge issue in Voluntary Carbon Credits (VCCs). Missing due diligence and transparency can tank the credibility of a VCC if funders find out that what was promised is not being enacted. Due to poor tracking, it is possible to “lose” carbon credits and have no way to track how many times they’ve been traded, how many times they’ve been implemented into a company’s accounting if the projects they represent are still in good shape…
CarbonABLE’s solution to this is the blockchain and DeFi. Blockchain technology allows anyone to keep track of a project’s metadata over time, at any time. This makes trust and transparency accessible to anyone. We’re not the only ones who believe this. Founder and CEO of Data Gumbo, Andrew Bruce wrote for Forbes, explaining: “Smart contracts can also establish high-quality carbon offsets through distinguishing two key factors: provenance and uniqueness.”⁴
Blockchain and CarbonABLE are here:
The VCM is on an upward trajectory and is expected to continue its growth over the coming decades.
Ernest and Young cite the industry’s “challenges are among those typical for developing initiatives: insufficient governance, lack of basic regulations, distrust.”⁵
But at CarbonABLE, we know the onset of web3 will increase demand for premium carbon credits, and build trust and transparency in the VCM. We’re going to leverage DeFi to mitigate the climate crisis and tackle the old problems of trading carbon credits head-on.
Sources:
(1)https://www.offsetguide.org/concerns-about-carbon-offset-quality/(2) https://www.transportenvironment.org/discover/documents-reveal-commission-scientists-find-car-industry-cheating-emissions-again/(3) https://www.ft.com/content/3f89c759-eb9a-4dfb-b768-d4af1ec5aa23 (4) https://www.forbes.com/sites/forbestechcouncil/2021/08/16/the-near-term-future-of-blockchain-tracking-carbon-offsets/(5) https://www.ey.com/en_pl/law/voluntary-carbon-market
Other interesting resources
. https://www.euronews.com/green/2021/06/02/the-five-biggest-reasons-carbon-offsetting-schemes-can-fail. https://trove-research.com/wp-content/uploads/2021/11/Trove-Research_Scale-of-VCM_29-Oct-2020-2.pdf
