Verra - one of the standard setters for certifying carbon emissions reductions - has just published a summary of the comments it received on purpose of its public consultation on a proposed approach to third-party crypto instruments and tokens.
By the way, there are more public consultations about digital verification and methodologies in the carbon market.
As there are more regulators looking at the Carbon Credit Markets as a whole. Recall this one from IOSCO - global standard setter for securities markets regulation - from earier this week, "Voluntary Carbon Markets and Compliance: two papers from IOSCO out for comments". One of documents include the chapter "The role of new technologies - blockchain and tokenised credits".
Back to Verra, here is what they indicated: "Verra recognizes the possible opportunities that crypto instruments and tokens can present for environmental and social markets and, by extension, the enhanced channeling of finance to support the emission reduction and removal projects that supply these markets. However, we also recognize the potential risks that such instruments may pose."
About risks, our Thursday post with results of a survey with about 500 global organizations, in spite of indicating broad support to carbon credit markets also brought up concerns, such as, lack of regulation and transparency requirements, lack of clarity and consistent quality in the market and unproven / reputational risk, among a few others.
Click on the image below to acess the full documento released by Verra last 17 January 2023.
Towards global standartization with transparency and carbon credit markets expansion, there is a lot of debate going on, balancing risks with technologycal developments. Analogy of a vehicle with a powerful engine. And - equaly - a powerful breaking system.
