The world emits roughly 51 billion tons of greenhouse gas emissions per year. While nearly every country on earth and many for-profit companies have endorsed the Paris Agreement to work toward achieving a level of emissions that is ‘Net Zero by 2050’, the challenge lies with the substantial number of companies that have no alternative technologies to materially reduce their carbon footprints.
To lower their emissions or fully offset their carbon footprints, such companies and individuals can purchase carbon offset credits from voluntary carbon markets (“VCMs”).
VCMs offer an opportunity for a company or individual to purchase and eventually ‘retire’ a carbon credit, thus transferring capital from an emitter to an entity that is verified to be reducing greenhouse gasses compared to the average.
The challenge for the carbon market
However, the biggest challenge the industry is facing is the chaotic “over-the-counter” and fragmented nature of VCMs. To illustrate this point, Morgan Stanley recently published a report entitled “Crypto and Carbon: Global Interoperable Voluntary Offset Marketplace on Chain”.
As a result of a lack of organization within and amongst VCMs, Morgan Stanley says the market is “complex and chaotic”, is lacking fair price discovery and is rife with fraud and “zombie credits”.
The opportunity for blockchain technology
On the bright side, the opportunity to bring organization and transparency to this sector “has the potential to be significant” and suggests a potential $765 billion (USD) valuation – larger than the software sector today.
The urgency to bring the global carbon offset market into the digital economy is gaining momentum, and rapidly entering into the mainstream conversation.
“The thesis is that the path to disruption will start at a niche segment of the high-end market. If the trading volume over these marketplaces grows to meet the increasing demands of buyers looking to meet net zero targets, it is likely that the service layers of tokenization and the marketplace itself will likely become valuable entities.”
Morgan Stanley
The DeepMarkit solution
DeepMarkit Corp. (TSXV: MKT | OTC: MKTDF | Frankfurt: DEP), having recognized the potential to merge modern technology with carbon offsets, is one of the earliest adopters of this theme and has been working diligently to bring its robust, transparent and secure MintCarbon.io platform to the commercial market.
Our company has been working with industry leaders Polygon (MATIC) and Quantstamp, and have aligned ourselves with third-party carbon project verifiers Gold Standard and Verra, to deliver a platform that the industry can trust and be used at scale.
We look forward to updating shareholders, subscribers and interested readers as we launch MintCarbon.io and commence the onboarding of curated, third-party verified carbon projects, which can be connected to any blockchain-enabled wallet and listed on a decentralized exchange (such as OpenSea or Rarible) for purchase and sale.
Morgan Stanley’s complete report can be found here.
