Ethics and Equity in Carbon Trading: Viridis Network’s Innovative V1 Platform

The role of carbon credits in combating climate change is complex, with both potential benefits and significant challenges. While they are designed to provide financial incentives for reducing greenhouse gas emissions, criticisms around ethics, equity, effectiveness, and morality raise serious concerns about their overall impact.

Ethical Concerns:

One of the most prominent criticisms of carbon credits are ethical considerations; there is concern over whether the carbon credit system actually encourages sustainable practice, or if it is simply a tool for companies to financially offload the burden of emissions production. With this system, there is little to no incentive for companies to adopt more environmentally friendly business operations, instead enabling ‘greenwashing’ (making false or misleading claims about the environmental benefits of a product or practice). The ability to simply “buy” out of directly working to reduce emissions is considered to undermine efforts to achieve net-zero.

Equity Issues:

Secondly, there is disparity amongst those benefitting from carbon credits, raising concerns about their equitability. Through efforts to decarbonise, carbon credits represent a mechanism to protect and manage natural ecosystems globally. However, they can sometimes have a negative impact on indigenous communities, as the benefits failed to be distributed fairly — criticism of the REDD+ Results system includes a lack of understanding of both carbon projects amongst indigenous communities, and an unawareness of their rights, allowing for manipulation and exploitation of local populations. A study of a popular forest offset in Peru found that the local community received no financial benefits for at least the first eight years of the project.

Effectiveness:

The effectiveness of carbon credits have also been called into question. Research by The Guardian has found that, according to their criteria and classification system, 39 of the top 50 carbon emission offset projects are worthless due to one or more fundamental failing that undermines its promised emission cuts, and that a total of $1.16bn worth of carbon credits have been traded from these ‘junk’ projects. Criteria included a guarantee of a project’s ability to permanently cut greenhouse gas emissions; some projects were found to leak emissions or shift them elsewhere, and some were found to have simply exaggerated their climate benefits.

Moral Considerations:

Finally, there is the issue of morality — are carbon markets commodifying the atmosphere and failing to see nature for its intrinsic worth over its potential profits? In the carbon markets strategy to reduce emissions, the natural environment becomes a financial asset, allowing corporations who partake in the market to profit from pollution, as long as mitigation measures are in place. Companies are then able to market themselves to consumers and investors on the basis that they are dedicated to a climate solution and are engaging in ESG practices.

These consistent failings of the voluntary carbon market pose a threat to the future of the race to net-zero, and call for considerable reform of the carbon credits system.

Viridis Network V1 Platform

This is where Viridis Network plays a crucial role. Viridis’ V1 platform seeks to tackle these issues through collaborating directly with project developers and providing transparent, verifiable and sustainable management of these projects. Instead of tokenising carbon credits, Viridis focuses on the tangible physical assets of carbon projects — each pCRBN NFT represents a real portion of a carbon offsetting project, such as tree trunks, branches, roots, leaves and biomass. The NFTs also come with comprehensive metadata detailing the project’s origin, environmental impact, and sustainability practices. This works to enhance transparency and market trust and allows those who purchase/rent these NFTs to own or have rights to a physical asset that contributes to the removal of carbon from the atmosphere.

Viridis’ V1 platform marks a significant step towards greater transparency and trust in carbon project management and ownership, navigating regulatory complexities and building a foundation for sustainable impact. The platform empowers users and organizations to engage seamlessly in combating climate change, providing verifiable environmental benefits through blockchain technology. As Viridis Network grows, it aims to set new standards in the carbon offset market, fostering genuine efforts to mitigate climate change and promoting a greener future.