The InterWork Alliance wants to make it easier for companies to buy and sell the carbon emission credits used in many global warming reduction plans.
The nonprofit blockchain industry group announced on July 29 that it has formed a working group to set standards for tokens that can be used in these carbon emissions trading programs.
While there are many of these programs, which allow polluters to buy carbon offset credits from green projects like solar power production and tree-planting initiatives, they grew far more important after Article 6 of the 2015 Paris Climate Agreement called for the creation of carbon markets globally.
However, the IWA is working on standards for platform-neutral tokens specific to the greenhouse gas reduction market rather than to a blockchain protocol, such as Ethereum’s ERC-20. The IWA standards are intended to make it easier to create and run carbon markets across different industries and between different countries.
Formed in June, the IWA also intends to create certification standards to complement those tokens, with the goal of ensuring that a program’s tokens are of equal “value” everywhere. IWA members include mainstream companies working with blockchain technology like Accenture, Microsoft, and ING Bank, as well as industry firms such as Digital Asset, Neo Global Development, and Chainlink.
Broadly, the goal of the working group is to improve and encourage corporate sustainability efforts by easing the accounting process and reducing the number of intermediaries companies must work with to make a carbon emission accounting system workable.
There are plenty of projects using blockchain technology to enhance sustainability, ranging from the neighbor-to-neighbor sale of electricity from home solar panels to a World Economic Forum project to expose corporate “greenwashing.”
It’s not a crypto
“[M]aking climate and sustainability accounting more efficient through tokenization is critical,” said IWA Chairman Marley Gray, a principal architect at Microsoft.
“A very important concept to understand is that value does not equate to cryptocurrencies,” Gray wrote in an earlier post about the sustainability project. “It does not even have to equate to something financial, like money—any item (physical or digital-native), or inventory unit, or even a ‘concept’ that moves across a supply chain to track progress is value that can be represented.”
While helping in the fight against climate change is important, the IWA is not an environmental group. It is aimed at simplifying and standardizing the exchange of value via tokenization.
“[T]here’s no need to tie tokens to blockchains,” said Gray. “[B]lockchain is really just the first step in what is a much larger, more ambitious approach to looking at how organizations work together.”