Carbon Credits: a financial derivative created to incentivize businesses to produce fewer greenhouse gases.
In essence, a noble concept, Carbon Credits currently exist in a grey area between “easily manipulated” financial asset and prosocial attempt to reverse anthropogenic climate change. Since the acceptance of the Kyoto Protocol in 1997, countries and organizations alike have been working to reduce the amount of greenhouse gases produced. One of the ways they have attempted to do this is by issuing Carbon Credits (CX) to organizations for each ton of CO2 that they do not produce. For example, if a company is producing 300 tons of CO2 per month and are able to reduce that to 250 after upgrading their infrastructure, they earn the right to receive 50 Carbon Credits each month. These tokens, or assets, can be held, sold or used in the same way that a stock or bond would be.
Currently, no Carbon Credits are being issued. We are existing a strange period while the Kyoto Protocol is being phased out while preparing for the initiation of the Paris Agreement. Even though the United States, at the prompting of current president Donald Trump, has removed themselves from the Paris agreement, the world still plans to adopt the new regulations in 2020. When this occur, individuals organizations and countries will begin earning Carbon Credits.
Carbon Chain, a blockchain based marketplace running on the Ethereum network will function as a decentralized exchange for Carbon Credits. Users can purchase Carbon Credits using a proxy token, CCI, and then buy/sell/hold them accordingly. Carbon Chain International is a private organization that will support the Carbon Chain by : buying Carbon Credits in bulk and helping other organizations create and redeem additional credits. Combining blockchain technology with a centralized organization inherently has its own limitations but the group, CCI, will ultimately be promoting prosocial activities and helping organizations produce less CO2.
CarbonChain will be a standard exchange running on the Ethereum network where users can buy and sell carbon credits. The platform is currently in the midst of it’s ICO, selling CCI tokens for $.20 USD each. The platform will be available world wide, but the United States, as so often is the case, is blacklisted from the ICO. They are aiming to raise ~$35 million USD in their token sale. Funds raised will be used in a standard manner with a small percentage going to the team and advisors. The majority of remaining funds will be used to launch the platform, purchase carbon credits from existing exchanges and help entities produce more carbon credits.
Currently Carbon Credits are traded on existing financial markets in the form of a derivative. Limitations such as expensive trading fees, slow transaction times and lack of accessibility to the mainstream market stop individuals from being able to easily purchase Carbon Credits. CarbonChain will allow users to easily convert fiat and crypto currency into CCI tokens which will increase the demand on Carbon Credits world wide. This in turn should incentivize more countries and organizations to produce more Carbon Credits, decreasing the amount of greenhouse gases that get added to the atmosphere.
Carbon Chain International is a private organization that is launching the Carbon Chain, a decentralized exchange for carbon credits. They have pledged to use 30% of funds raised to purchase credits from existing marketplaces yet I’ve struggled to find relevant details of this in their white paper. Hopefully the platform is being managed by individuals who truly care about the well being of the planet, but based on my observations it seems like they are using a token sale to raise money to buy carbon credits which they will then hold and sell in the future for a substantial profit. Carbon Credits are wonderful, but do we really need an intricate blockchain exchange to do something that is already being done?
Posted from my blog with SteemPress : http://icowatch.live/carbon-chain-a-decentralized-exchange-for-carbon-credits/