Digitising the voluntary carbon market (VCM) is the leading use case for blockchain innovations in the climate space, a new paper from the World Economic Forum (WEF) has found. According to the white paper, key challenges such as market fragmentation, analogue reporting and verification procedures have caused bottlenecks in credit issuance, while limited price discovery has “stymied” VCM growth for two decades. The paper, which draws on seven months of research and engagement by WEF’s Climate Action Working Group, highlights the role of emerging technologies, including blockchain, in global decarbonization initiatives, offering context, examples and explanations. “Blockchain technologies have the potential to support progress towards global decarbonisation,” said John Hoopes IV, Head of Ecosystem, Toucan Protocol. “To realise the full benefits of these efficiencies, closer collaboration is needed among registries, carbon standards, verification bodies, scientific communities, and blockchain entrepreneurs, to construct an end-to-end digital VCM.” The white paper highlights the potential for blockchains to democratise ownership as the technology allows people to own and control their digital assets without intermediaries, reallocate resources, and improve the transparency and integrity of existing decarbonisation mechanisms, such as carbon markets.
