Real-World Assets Driving Real-World Impact
By KlimaDAO (Feb 2, 2024)
The Seeds Have Been Sown for Exponential Growth in the Voluntary Carbon Market (VCM)
When carbon credits are on-ramped or natively issued on the blockchain they become part of the RWA movement—digital representations of positive environmental impact created by projects around the world—whether they are restoring degraded mangroves, decarbonizing the energy grid, or accelerating our efforts to mitigate the release, or ramp up the capture, of greenhouse gasses in the atmosphere. These RWAs can then be traded or consumed (retired) by organizations looking to fulfill their sustainability strategies.
This digitization of carbon credits enables a leap toward enhanced transparency, accessibility, and efficiency for the entire value chain. Public blockchains bring about unparalleled transparency, ensuring that the lifecycle of each carbon credit —from issuance to retirement—is visible to all, helping to build trust among market participants. Blockchain technology also enhances scalability through smart contracts that automate transactions and verification processes, reducing bottlenecks and increasing overall market efficiency.
Case Study 1: Improved Cookstoves for Rohingya Refugees in Bangladesh
Support for the Improved Cookstoves for Rohingya Refugees in Bangladesh project was ratified in KIP-32 via KlimaDAO’s governance process. The project aims to replace traditional wood-fuel cookstoves with high-efficiency biomass-fired improved cookstoves, reducing emissions and improving indoor air quality.
The project contributes to solving a major challenge in Bangladesh, where 82% of households rely on polluting fuels and cooking technology, with around 135.2 million people lacking access to clean cooking. The project not only reduces emissions but also supports numerous Sustainable Development Goals, increasing people’s access to basic services and new technology while tackling poverty by reducing purchased fuel consumption. The project also generates employment for marketing, sales, distribution, and technical employees, thus aiding economic growth through the provision of decent work.
Case Study 2: Ocean Alkalinity Enhancement with Limenet
KlimaDAO’s investment of USD 600,000 in Limenet’s innovative Carbon Capture, Utilization, and Storage technology is propelling a major advancement in carbon dioxide removal. This investment is a pioneering effort in harnessing the ocean’s natural carbon sequestration capabilities. Limenet’s approach enhances oceanic alkalinity, enabling the ocean to absorb and stably sequester atmospheric CO2 in the form of bicarbonates. This process is dual purpose, simultaneously facilitating the restoration of marine ecosystems and addressing the critical issue of ocean acidification.
Limenet’s method, known as Buffered Ocean Alkalinity Enhancement (BOAE), represents a groundbreaking technique to industrialize the natural geological carbon cycle—not only capturing atmospheric carbon but also bolstering the ocean’s inherent carbon storage abilities.
Looking Forward to a Sustainable Future
Since its inception in the 2000s, the VCM has undergone a remarkable transformation, becoming an integral part of the global environmental economy. However, to clear headwinds and revitalize growth, the VCM requires solutions that build transparency, impact, and trust. The solutions are uniquely enabled by the infrastructure that already exists in the form of the blockchain-enabled carbon market.
Looking toward the rest of 2024, development activity in this space is buzzing, with much of the work carried out between 2021 and 2023 now coming to fruition. With blockchain-native carbon credits, demand-side users will be able to access richer data, enabling them to make more informed choices about how to execute their sustainability strategies. Additionally, they will be able to use Carbonmark’s marketplace and API solutions to automate carbon sourcing and retirement, while also being able to showcase their environmental impact using immutable proofs.
This article was originally published by KlimaDAO on February 2, 2024. For the original article, please visit KlimaDAO's website.