Global carbon markets transacted around 750 billion euros ($850 billion) last year. Almost all of this occurred in so-called compliance markets, where significant emitters of greenhouse gases are required to purchase permits or credits. Given that global emissions are currently little over 51 billion tons per year, offsets might play a key role in further decarbonizing the global economy.
There are now a plethora of offset developers, thousands of projects across the world, many techniques to validate CO2 saved, and multiple registries that track offset activities. But it will take more than supply and demand to get to that multi-gigaton scale.
To overcome the difficulty:
- New business models, technology, and markets will be required
- There is a need for decentralized autonomous organizations
- Tokenized emissions credits are required
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