Toucan: Revolutionizing Carbon Offsetting
Blockchain and cryptocurrencies are not just for finance and investment. They can also be used to combat climate change, at least according to Raphaël Haupt and James Farrell. The two individuals met at a hackathon near Trafalgar Square in London, and discussed how the growing popularity of blockchain and cryptocurrencies could be harnessed to help reduce carbon emissions. Their brainchild, Toucan, aims to revolutionize the voluntary carbon offsetting market.
The Voluntary Carbon Offset Market
To understand the significance of Toucan, it’s important to understand the voluntary carbon offset market. Companies and individuals need to reduce the amount of carbon emissions they produce, but there will always be a certain amount that cannot be eliminated right away. Carbon credits are used to balance this out and achieve a net zero carbon footprint. These credits can be created through various methods, such as reducing emissions or funding environmental projects like forest conservation or renewable energy initiatives.
The Problem with the Current System
The current carbon offsetting system is fragmented and chaotic. It is governed by a network of private standards bodies, each operating their own carbon credits registries. This lack of uniformity and harmonization makes it difficult for stakeholders to navigate and work with the system. John Hoopes, also known as John X in the crypto community, who is leading Toucan’s strategy, highlighted the challenges of this unregulated and global market.
Toucan’s Solution
Toucan acts as a market infrastructure that transforms physical carbon credits from various registries into standardized carbon tokens on a single blockchain super-registry. These tokens are then aggregated into “pools” from which users receive tradable crypto tokens. Toucan’s first carbon pool, BCT (Base Carbon Tonne), is a basket of credits representing various offsetting projects, such as tree-planting and pollution-reduction initiatives, aimed at offsetting one tonne of carbon emissions.
Benefits and Impact
By consolidating carbon credits onto a single registry, Toucan aims to prevent double-reporting of credits and provide transparency into the age and quality of different carbon credit projects. It also allows for customization of tokens based on the buyer’s preferences, such as nature-based or technology-based solutions.
According to Hoopes, Toucan’s system enables corporations to align offsetting activities with their brand image and preferences. This level of customization and transparency sets Toucan apart in the carbon offsetting market, potentially changing the way companies and individuals engage in offsetting activities in the future.
