LONDON/NEW YORK : International Finance Corp , a World Bank affiliate, told Reuters on Wednesday it is backing a blockchain-enabled platform to trade carbon offsets, aiming to attract more support from institutional investors for climate-friendly projects in emerging markets.
Several financial technology firms have sprung up over the last year to turn carbon offsets into digital tokens, yet the market has struggled to gain traction with companies and institutional investors amid concerns about the origin and environmental benefits of some of the traded credits. Blockchain technology has also been criticised by environmentalists as being too energy intensive.
The IFC has partnered with sustainability finance company Aspiration, blockchain technology firm Chia Network and biodiversity investor Cultivo to launch the Carbon Opportunities Fund, which will provide the carbon offsets on blockchain. Carbon credit markets are largely unregulated as governments have yet to agree on trading rules. Many countries and companies consider offsetting as a way to help meet their net-zero carbon emissions targets by 2050, a crucial goal to mitigate the effects of climate change.