Crypto-the world’s largest buyer of carbon offsetsFriday 19 Aug 2022
Cryptocurrency platforms, airlines, carmakers, and oil companies were the biggest buyers of carbon offset credits in 2021, according to a new Bloomberg analysis of data from Verra, the largest offset brokerage. At the top of the list by far was Toucan Protocol, a crypto trading platform that snapped up carbon offsets worth 17 million tons of carbon dioxide. Carbon offsets ostensibly allow their purchaser to claim a reduction in their carbon footprint, since the money goes toward supporting a project—most often renewable energy systems or forest conservation—that keep new greenhouse gas emissions out of the atmosphere. In theory, carbon offsets should be a way for high-carbon companies that cannot affordably cut emissions directly to finance carbon cuts elsewhere, effectively drawing down net emissions. But in practice, many offsets are based on dubious assumptions and calculations that provide a veneer of climate progress without actually reducing emissions. Toucan’s goal was not to offset its own corporate emissions but to turn the offsets into digital tokens that its customers could trade on its platform, creating another tradeable commodity with an ostensibly green core. In fact, Bloomberg found, most corporate offset purchases were made with customers in mind, in order to offer specific products—from seats on a flight to shipments of natural gas—that could be upsold as “carbon neutral.” (Data on offset trading is limited to what buyers and sellers voluntarily disclose, so the Bloomberg analysis covers only about half of the total global market). Crypto’s time at the top of this list is probably over, at least for now. In May, Verra said it would ban the “tokenization” of offsets, because doing so created what one Verra executive called a “mind frying” level of abstraction and distance between an intangible financial instrument and the physical emissions it is meant to represent. Still, both Toucan and Verra are continuing to tinker with ways to more credibly link carbon offsets to cryptocurrency technology. More >> Source: qz.com --(2022).jpg)
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