The International Finance Corp (IFC), a World Bank affiliate, told Reuters that it is backing a blockchain-enabled platform to trade carbon offsets. The aim is to attract more support from institutional investors for climate-friendly projects in emerging markets.
These carbon credits are used by companies and organisations to offset emissions when accounting for their carbon footprint. They are backed by projects that compensate for emissions, such as tree planting or creating solar and wind power.
The IFC spokesperson told Reuters it would only source, tokenise and sell unused credits from an established registry that passes its additional quality checks.
Previously, the IFC partnered with sustainability finance company Aspiration, blockchain technology firm Chia Network and biodiversity investor Cultivo to launch the Carbon Opportunities Fund, which will provide the carbon offsets on blockchain.
Seeded with $10 million as a proof-of-concept, the fund will buy carbon credits from projects chosen by Aspiration and Cultivo, which will then be tokenised using technology from Chia and tracked using the World Bank’s Climate Warehouse database.
As per the news piece, carbon credit markets are largely unregulated as governments have yet to agree on trading rules. Many countries and companies consider offsetting as a way to help meet their net-zero carbon emissions targets by 2050, a crucial goal to mitigate the effects of climate change.
The IFC’s fund has identified 250,000-300,000 tonnes of credits that can be bought by year-end and is conducting due diligence on projects that represent around 1 million tonnes of credits that could be available in the next few months.
