Curbing Climate Change: An Analysis of the Blockchain’s Impact on the Voluntary Carbon Market

Abstract

We are currently facing a major global crisis. Climate change is one of the most pressing threats to humanity and yet our system is failing to take the necessary actions to protect our planet from environmental destruction. There is an undeniable coordination issue that has led to ineffective policy, lack of capital, and unsustainable carbon emissions. Deforestation, ocean acidification, glacial retreat, forest fires, heatwaves, droughts, and flooding, among other things, are becoming more prevalent and occurring more often. The voluntary carbon market is one potential solution to help fight climate change, but the current system is plagued with issues that has stifled efforts to scale this market. What if human beings repurpose how we operate to create an environment in which the system itself is regenerating? The movement of rewarding ecological activities with economic incentives has become known as regenerative finance, or ReFi, and is a promising space seeing significant growth. To advance this movement, new technologies are being evaluated as having the potential to fix a lot of the problems existing in the traditional voluntary carbon market. Through the implementation of the blockchain in the voluntary carbon market, there is an opportunity to enhance the current system and help put monetary value on conservation rather than extraction and depletion. Web3 technologies has the potential to act as a contributing force that can make a meaningful and measurable impact in the fight against climate change for individuals, households, and communities across the world. This paper identifies the cutting-edge blockchain-powered technologies and companies optimizing the voluntary carbon market. In doing so, it analyzes whether these nascent innovations can catalyze the ReFi movement to promote and accelerate climate action.