As interest in digital carbon tokens grows, ensuring integrity and transparency is as important as ever. Last week, the International Emissions Trading Association (IETA) announced the launch of a Task Group on Integrity in Digital Climate Markets to examine recent trends in this new market and help ensure integrity.
The Climate Trust applauds this effort in light of the burgeoning landscape of digital carbon assets. Myriad new tokens and cryptocurrencies are trying to find their places. Approaches currently run the gamut of usefulness from unlocking new and decentralized capital to creating new trading platforms to making carbon claims without transparent carbon accounting. Principles of best practice need to be established to not only help participants navigate the landscape but also ensure that the integrity of carbon markets as a whole are not inadvertently undermined.
In this process, the task group should also be sure to assess inherent emissions associated with underlying blockchains. This problem is already being investigated by the US Congress as most proof-of-work blockchains are extremely energy intensive and result in massive emissions levels. Encouraging carbon-intensive blockchain transactions would clearly be counterproductive to reducing greenhouse gases.
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IETA, January 20, 2022. IETA Launches Task Group on Integrity in Digital Climate Markets
Calma, Justine. The Verge, January 20, 2022. Congress weighs cleaning up cryptocurrency mining in the US.