In the first full Q&A of Conviction’s #CryptoClimate series, JustCarbon Co-Founder Adrian Rimmer responds to CarbonPlan’s report published last Thursday 7th April. To kick-off, JustCarbon’s Q&A is the only expert commentary focused solely on CarbonPlan’s investigation into blockchain and carbon credits, markets and offsetting.
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Adrian Rimmer, Co-Founder of JustCarbon
The latest IPCC report highlighted the urgency of addressing the climate crisis. Carbon markets have demonstrated that they are one of the few instruments that can deliver capital at scale to climate change mitigation projects worldwide and particularly in developing countries.
A dogmatic refusal to engage with a proven mechanism for fighting climate change will not lead to perfection, it will lead to climate catastrophe. We must continue to strengthen the governance of carbon markets, there is clear evidence that they deliver emission reductions and removals. Where offsets are used by companies, this must be accompanied by direct action on their carbon footprint in line with science-based targets.
Confusion and scepticism towards the market require a high watermark for high-quality offsets that provide a new level of assurance for buyers.
“A dogmatic refusal to engage with a proven mechanism for fighting climate change will not lead to perfection, it will lead to climate catastrophe.”
What’s your response to the findings in Zombies on the blockchain, questioning the integrity and impact of blockchain and carbon offsetting?
While blockchain technology can bring significant benefits to the outdated and opaque carbon credits market, it is important that it is applied with the most rigorous standards in mind. The so-called process of ‘sweeping the floor’ is absolutely the wrong approach as, per the CarbonPlan report, it is incentivising low-quality and zombie projects.
Blockchain technology will make the market a lot more transparent, but part of the responsibility that comes along with that is to ensure that credits transferred to the blockchain are of the highest quality.
JustCarbon is designed to do just that - it has a requirement for a highly specific definition of high-quality credits baked into its architecture. We don’t allow any credits to be tokenised - just those meeting our rules and each project is vetted against our criteria before being accepted. We accept only credits from sequestration activities, certified by Gold Standard or Verra - VCS with additional CCBA accreditation and credits must have been issued in the last 5 years to ensure the projects have used the most current accounting methodologies.
“Blockchain technology will make the market a lot more transparent, but part of the responsibility that comes along with that is to ensure that credits transferred to the blockchain are of the highest quality.”
What’s your assessment of the financial incentive to move carbon credits to blockchain and how critics call into question the real benefits, alluding to parallels with crypto markets and transparency?
The purpose of the carbon market is to provide a financial incentive for the creation of carbon reduction and removal activities that would not otherwise take place. Markets drive action, however, they need the correct governance and transparency to ensure that they work properly.
Blockchain technology is founded on the premise of transparency (every transaction can be traced via the public ledger), speed and efficiency. JustCarbon’s approach increases the visibility and accessibility of high-quality credits, making it easier for buyers and project developers to access the market, maximising the direct financial benefits to project developers and providing assurance and confidence to buyers.
We are concerned about the lack of transparency around the ownership and backing of some companies in the market. JustCarbon has been transparent about its team from the outset, not least because we’re proud of our collective expertise to make the platform work. Moreover, we designed it to be owned by no one and governed by its users and those who have an interest in market integrity, via its DAO.
“The purpose of the carbon market is to provide a financial incentive for the creation of carbon reduction and removal activities that would not otherwise take place. Markets drive action, however, they need the correct governance and transparency to ensure that they work properly.”