• Major global institutions are pushing for blockchain in carbon credits.
• Global carbon markets soared 164% last year to $760 billion
• Markets are expected to rise further due to regulatory pressure

Most discussion about blockchain and carbon emissions has centered on the negative. This is largely due to the sizeable energy consumption of many blockchain networks, including bitcoins.

But blockchain technology is proving it can help reduce carbon emissions. Leading global institutions are now betting on crypto to fight climate change.

One of the most promising applications is carbon credits. These tradable certificates represent the reduction of one metric tonne of carbon dioxide or its equivalent.

The World Economic Forum, a lobbying organization focused on technology and sustainability, has promoted using blockchain to tokenize carbon credits.

Carbon credits stem from a system called cap-and-trade. Governments set a certain limit on the number of carbon emissions and allow companies to buy and sell credits through an exchange.

Carbon credit schemes are currently up and running in several regions, including the European Union, New Zealand, and California.

Are Carbon Credits a Good Investment?

The EU is by far the biggest market for carbon trading. It accounts for 90% of the global carbon market, valued at $760 billion.

Currently, the EU’s Emissions Trading Scheme (ETS) covers significant portions of…