In the Brazilian context of the voluntary carbon credit market, a popular maxim is especially relevant: "all that glitters is not gold". There is a significant growth of projects classified as carbon credits, whose substance and effectiveness in offsetting or removing CO2 from the atmosphere often do not match the initial expectations. This proliferation covers from environmental preservation to the implementation of satellite analysis technologies, suggesting a diversity that, in many cases, does not translate into quality or effectiveness and even generation of carbon credits properly.
Challenges in Validating Carbon Credits
The market reality reveals the existence of projects lacking adequate security mechanisms, guarantee funds to cover carbon reversal risks to the atmosphere, validated methodologies through public consultation, specialized professionals in project development, independent audits and certifying entities that closely monitor the credit generation process, with an active supervision of the entire certification process.
The practice of companies or organizations self-styled as "carbon certifiers" taking full responsibility for the provision of services within the certification process or part of them, results in a clear conflict of interest, harming the transparency and reliability of the market, Brazilian and international.
Blockchain: Innovation or Illusion?
The application of blockchain technology, although presented as a modern solution for the certification of carbon credits, often does not adopt standardized procedures and alignment with globally accepted practices. This strategy, despite seeming advanced, often does not provide the necessary validation and reliability, exemplifying the ease with which appearances can be deceptive in assessing the validity of carbon reduction or capture initiatives.
In Lux Carbon Standard, tokens are generated when certifying credits, however, in addition to each token meaning a registered credit; in LuxCS each one of them mirrors and records all the stages of a project. This increases the transparency and integrity of the credits generated within the Triple C standard.
Criteria for the Legitimacy of Carbon Credits
It is imperative to distinguish between the projects that merely present themselves as credits and those that effectively meet the fundamental criteria for their Validation and Verification. A genuine carbon credit in the voluntary market must be supported by solid safeguards, validated methodologies, qualified team, independent audits and certification carried out by recognized entities and that follow the best practices recognized internationally.
The Importance of a Careful Assessment
A superficial analysis of what the entire process for generating a carbon credit as a financial asset is, obscures the real essence of the initiatives in the voluntary market. Thus, a careful and critical approach in the evaluation of these projects becomes crucial, ensuring that only those that meet the highest standards of integrity are recognized as tradable financial assets. Through a meticulous scrutiny, we can guarantee that the efforts undertaken in offsetting greenhouse gas emissions and removing CO2 are truly effective and contribute significantly to the sustainability of our planet and be one of the most effective tools to combat the evils of the looming climate emergency.
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