It's been announced this week that International Business Machines (IBM) partnered with Veridim Labs, a startup creating environment-related cryptos, to help the environment by turning carbon credits into blockchain-based tokens. Carbon credits - tradeable instruments created to help reduce greenhouse gas emissions – will be tradeable for the okens via exchanges.
The project was announced by IBM's Senior Vice President of Industry Platforms and Blockchain development, Bridget Van Kralingen, during the Consensus Conference this week in New York.
According to Jared Klee, a manager in charge of blockchain-based projects at a New York-based IBM branch, the project is intended to raise greater awareness on companies’ carbon emissions.
The new cryptocurrency is poised “to make it easier and cheaper for companies and individuals to account for their footprint and neutralize the impact they have on the environment.” Its tokens will be issued and managed via the Stellar network.
“This is a great example of how industries are being reinvented by blockchain [technology], in this case establishing a far more efficient and transparent approach to carbon accounting and offsetting that will empower individuals and companies to play a role in improving our environment."
Over $4.5 billion have been spent on carbon credits in the last 10 years. Organizations who purchase these credits are allowed to burn a specific amount of fossil fuels, as getting them shows a company “paid to have a certain amount of carbon dioxide removed from the environment.”
The new token will be backed by InfiniteEARTH, a sister company of Veridium. The former will receive the credits (referred to as REDDs) for the ongoing development and management service it provides for the Rimba Raya Rainforest, in Borneo.
According to Klee, IBM and Veridium plan on letting traders hedge potential environmental impact with the use of their blockchain platform.