- Climate change experts believe that Ripple XRP Ledger has the ability to differentiate between low-quality and value-added carbon credits.
- Ripple is building a portfolio of long-term, additive, science-based carbon credits that would cater to Ripple’s commitment to hitting net zero by 2030.
As the blockchain industry continues to evolve, and fast, existing platforms have been taking initiatives that align with sustainable energy goals. Earlier this year, Ethereum dropped its PoW consensus mechanism and shifted to a more environmental-friendly PoS mechanism.
Another blockchain platform Ripple is taking some bold steps in this direction now. During Ripple’s annual Swell conference last month in November, panelists discussed how blockchain and crypto solutions for business are real-world use cases.
Ripple’s SVP of Social Impact and Sustainability, Ken Weber explained what role Ripple can play to improve “the transparency, accountability and traceability of greenhouse gas emissions” in their support of global climate goals.
One of the panel members during the Swell conference was Mark Herrema, CEO of Newlight. Mark explained how Newlight has been harnessing the power of blockchain to push the use of carbon-negative material for different industrial use-cases. Newlight is currently working on carbon credit certificates representing one metric tonne of greenhouse gases.
Corporations and institutional buyers looking to offset their remaining emissions can purchase these credits. However, Mark Herrema explains that not all credits are created equal. Hence, they need to price differently. Mark sees a future wherein carbon credits are less commoditized, more differentiated, and value-added. He explains:
Just like you have this massive differentiation between stocks, you also have that in carbon reductions. One of the things that we find very important about blockchain, and specifically the XRP Ledger, is the ability to differentiate and have an individuated value for carbon credits. I think that is something that’s important to developing the carbon market.
The future of Carbon Credits
Reilly O’Hara, leading carbon finance partnerships and post-sales operations at CarbonCure Technologies, also shared his insights regarding the future of carbon credit during the Ripple swell conference. CarbonCure anticipates a new wave of measurement, reporting, and verification (MRV) by leveraging the capabilities of blockchain along with other emerging technologies like remote sensing/IoT, satellite imaging and machine learning/AI.
The primary goal remains moving away from low-quality carbon credits and towards higher-quality, permanent, verifiable carbon credits. Speaking on this, CarbonCure’s Reilly O’Hara explained:
I think that’s where Ripple has really emerged as a leader. But 50 gigatons means that we need 10, 50, 100 Ripples and they need to be investing in ten thousand CarbonCures and Newlights. It’s going to take big bets and investing so that by 2030-2050, these technologies are off the bench and removing carbon from the atmosphere at full scale.
Ripple is among the forerunners in the blockchain and crypto space to fight climate change. The company has also deployed $100 million to voluntarily scale the carbon markets.
Ripple believes that its funding will help in accelerating the removal of carbon credits and modernize the carbon markets through innovation and investments. The company is planning to build a portfolio of long-term, additive, science-based carbon credits that would cater to Ripple’s commitment to hit net zero by 2030.