The International Finance Corporation (IFC) is working with a group of crypto-natives to launch a carbon credit trading platform, on the blockchain!
Cultivo: (biodiversity investor) will identify nature-based projects offering quality carbon credits.
Aspiration: (a sustainability finance company) will advise on the selection of carbon credits projects and Fund investments.
Chia: (energy-focused blockchain platform) is the public blockchain on which the World Bank’s Climate Warehouse will exist.
The Carbon Opportunities Fund will source, tokenize and sell high-quality, verified carbon credits; the focus will be on nature-based projects.
“This new partnership will foster the standardization of carbon credits generated in emerging markets and help mitigate climate change,” said Paulo de Bolle, Senior Global Director, Financial Institutions Group, at IFC.
The carbon credit market has big potential to fund carbon reduction projects, but it’s also plagued by market failures and corruption.
The promise of tokenising carbon credits, and managing them on a blockchain database, is to ‘build market trust by enhancing transparency and securing the integrity of global carbon trading’, says the IFC.
Carbon credit markets are largely unregulated by global governments, despite their growing importance. Net zero ambitions for both countries and companies see strong reliance on carbon credits in their modeling.
The IFC model stresses its engagement with only ‘high-quality’ credits from verified sources. This comes despite Verra, a leading verification source, stating they won’t allow their credits to be tokenized.