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  • Writer's pictureKlimaDAO

An open call for alternative carbon standards

Updated: Nov 14, 2023

Nature scenery

KlimaDAO launched the Digital Carbon Market (DCM) by enabling one-way bridged carbon credits from partners Toucan, C3, and Moss from the Verra Registry and Verra Carbon Standard to be integrated into its system. Verra is one of the world’s leading carbon standards and through its work over the past two decades has been integral to scaling the Voluntary Carbon Market (VCM) by building trust into the market’s supply side.

Since its inception in the 2000s, the VCM as a whole has experienced a remarkable transformation, evolving from niche initiatives into a dynamic and integral part of the global environmental economy. The market has seen exponential growth in both value and transaction volume, driven by several key factors:

  • The efforts of Verra and other carbon registries such as Gold Standard

  • Increased corporate sustainability commitments

  • Strengthening of government regulations across the globe

  • Growing public awareness about climate change

Despite these strides, the VCM still faces many headwinds and there remains ample room for further evolution.

Digitization of real-world assets

As we move into the next phase of market development, tokenization—a process leveraging blockchain technology to digitize and fractionally distribute real-world assets such as carbon credits—is increasingly recognized as a potential game-changer. For example, BlackRock’s CEO recently acknowledged the role this technology can play across various markets.

By increasing transparency, efficiency, and liquidity, tokenization offers the promise of catalyzing new growth, innovation, and market accessibility, propelling the VCM into an unprecedented era of environmental and economic impact. This market is currently predicted to grow by a hundred times in the next three decades. To achieve this, however, there must be greater levels of trust across the market. Technology can play a key role in creating this trust.

Due to concerns around one-way bridging, and uncertainty around the role that Web3 technologies can play in the carbon markets, Verra and other leading carbon standards and registries prohibited the practice of bridging their inventory in May 2022. As a result, the DCM has remained relatively siloed for the last year, and KlimaDAO has not onboarded new supply in this period. However, a number of new initiatives have emerged that stand to change this—necessitating the formalization of a framework for evaluating new carbon supply.

Emerging alternative standards

As the VCM continues to mature, we should ensure that systems are well-positioned to leverage the benefits of public blockchain technologies, including the development of modularized, interoperable systems that are transparent and secure and that offer greater accessibility to users. These benefits of the DCM will serve the wider market well as both demand and scrutiny increase.

New entrants to the market are focusing on high-impact carbon mitigation and removal technologies, such as Puro.Earth, who have been a leader in facilitating the market for carbon dioxide removal projects and who have already announced partnerships with several DCM actors.

Some registries, such as EcoRegistry and Regen Network, are blockchain-native pioneers that intrinsically recognize the role that blockchain technology can play in increasing the efficiency of registry systems. Now there is a Cambrian explosion of blockchain-enabled carbon credit projects, such as OFP and Nori—with Nori securing buy-in to their approach from Bayer.

These new digitally native credit issuers offer the promise to interoperate with one another, as well as leverage the benefits of public blockchain technologies and decentralized finance.

Our open call for alternative standards

KlimaDAO aims to ensure that the next-generation carbon market is built on transparent public blockchains by providing the necessary liquidity and infrastructure. In order for our infrastructure to serve as a public good for carbon markets, we take a long-term approach to the deployment and management of liquidity, as well as to the deployment of the rails enabling the transaction and retirement of carbon credits on public blockchains.

A flow chart outlining a possible path for new carbon credits
As alternative carbon standards mature, KlimaDAO is ready to open up its systems for the benefit of the entire market.

To do this, we will utilize the existing public governance process for our community to engage with proposed credit issuers who seek inclusion. It is KlimaDAO’s view that innovation across the entire VCM will be critical to scaling and maturing these markets, so they can play a meaningful role in closing the emissions gap before it is too late. The role that novel digital technologies play in the markets is still, despite the rapid progress, in its early stages.

KlimaDAO stands ready to allocate resources to support those who are developing the carbon credit issuance systems of the future by:

  • deploying liquidity;

  • providing a route to market via our infrastructure layer; and

  • integrating supply into our demand aggregation activities.

In its essence, KlimaDAO is a community-owned project. Therefore, this community takes an active role in ensuring that the market is able to access and govern the project’s resources for its needs.

We welcome any carbon market stakeholders who are active on the supply side and that wish to benefit from any of our infrastructure (the Retirement Aggregator; liquidity pools and incentives; and to participate in our governance process. You can do this by submitting an RFC to our forum seeking support for integration of your assets or for building interoperability with our systems. KlimaDAO contributors will be on hand to support interested parties throughout this process.

To get started now, click here.

For additional reading, you can also review current efforts surrounding KlimaDAO’s engagement with other alternative standards such as Coorest (which is in the process of onboarding) and International Carbon Registry (which passed the community vote on June 30th, 2023).

Disclaimer: The information provided in this blog post pertaining to KlimaDAO (“KlimaDAO”), its crypto-assets, business assets, strategy, and operations, is for general informational purposes only and is not a formal offer to sell or a solicitation of an offer to buy any securities, options, futures, or other derivatives related to securities in any jurisdiction and its content is not prescribed by securities laws. Information contained in this blog post should not be relied upon as advice to buy or sell or hold such securities or as an offer to sell such securities. This blog post does not take into account nor does it provide any tax, legal or investment advice or opinion regarding the specific investment objectives or financial situation of any person. KlimaDAO and its agents, advisors, directors, officers, employees and shareholders make no representation or warranties, expressed or implied, as to the accuracy of such information and KlimaDAO expressly disclaims any and all liability that may be based on such information or errors or omissions thereof. KlimaDAO reserves the right to amend or replace the information contained herein, in part or entirely, at any time, and undertakes no obligation to provide the recipient with access to the amended information or to notify the recipient thereof. The information contained in this blog post supersedes any prior blog post or conversation concerning the same, similar or related information. Any information, representations or statements not contained herein shall not be relied upon for any purpose. Neither KlimaDAO nor any of its representatives shall have any liability whatsoever, under contract, tort, trust or otherwise, to you or any person resulting from the use of the information in this blog post by you or any of your representatives or for omissions from the information in this blog post. Additionally, KlimaDAO undertakes no obligation to comment on the expectations of, or statements made by, third parties in respect of the matters discussed in this blog post.


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