CarbonKerma: An Antidote To Greenwashing

The first step in examining the viability of any Web3 project is this: what is the blockchain advantage? A blockchain is a distributed data structure with self-executing code. A tradeoff of disintermediation is slower processing times relative to centralized solutions. If an industry is not in dire need of disintermediation, centralized databases oftentimes suffice.

The carbon cap-and-trade system is one such system in need of disintermediation. This article provides a brief overview of how it functions, how a lack of measurability and verifiability on behalf of carbon credit issuing organizations leads to global net positive carbon emissions, and how CarbonKerma solves this problem through a blockchain token structure.

Carbon Cap-and-Trade

In a carbon cap-and-trade system, also referred to as emissions trading schemes, governments dictate maximum emissions limits by industry. Carbon emitters (such as airlines and manufacturing plants) buy or sell carbon credits based on their emissions relative to their allowance.

If under the limit, they become net sellers of the excess allowance. If over the limit, they become net buyers. The incentive structure imposes a tax on carbon-emitting industries that transfers value to the producers of carbon credits doing the environmentally pivotal work of reducing emissions. Theoretically, the system makes sense.

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Where emissions trading schemes are slowly becoming a failed market construct is in the issuance of credits. A carbon offset project is a deliberate activity that reduces the amount of greenhouse gas in the atmosphere.

More popular examples include replacing a coal plant with a solar or wind farm whereby credits are issued based on avoided emissions, planting trees in a barren landscape, or avoided deforestation for land with a valid license to clear whereby credits are issued based on averages in carbon sequestration rates from trees. Credit issuing companies include Verra, Gold Standard, and the International Carbon Reduction and Offset Alliance (ICROA).

Problem

Studies repeatedly demonstrate a lack of scientific rigor in carbon offsetting. According to the MIT Technology Review, systemic gaming of California’s forest CO2 preservation calculations has created up to 39 million carbon credits that do not achieve real carbon savings.

The Conversation and Trove Research also conducted a study on wind offsets with a similar conclusion — “carbon markets contain hundreds of millions of tonnes of poor quality credits” that do not meaningfully reduce emissions.

Nature Conservancy, a seller of carbon offsets in the United States, was also forced to conduct an internal review after an accusation from a Bloomberg article of selling meaningless credits due to the manner in which they calculate issuance.

Lack of measurability and haphazard issuance mechanisms from centralized institutions have detrimental effects on our planet and allow for the proliferation of greenwashing. Greenwashing is the business practice of misleading the public about one’s sustainability record.

Companies can continue emitting atmospheric CO2, purchase bogus offsets, and market themselves as carbon neutral without any effort in reducing their carbon footprint from operations or any demonstrable effect in reducing global carbon emissions.

Solution

CarbonKerma is measurable. One tonne of sequestered and stored carbon leads to the minting of one CKT. Emitting businesses can buy and burn CKT on a certified and measurable tonne-for-tonne basis. Emitters transfer value to capturers for the work of decarbonizing global industry.

As opposed to centralized organizations, CKT is minted upon successful proof of sink through Certificates of Sink. Measurable inputs lead to measurable outputs, as opposed to the convoluted trading schemes that exist today.

Issuance based on protocol rules disintermediates the haphazard issuance of centralized organizations. CarbonKerma puts the world on a path of rapid decarbonization. Businesses that choose CarbonKerma know that their offsets are measurable, certified, and contribute to global carbon neutrality.

CarbonKerma. Minted For Good.

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