Unique Fungible Tokens for Carbon Reduction

Description

Joseph Pallant:

"The rules for “Non-Fungible Tokens” (NFTs) built on the Ethereum blockchain have recently been standardized. If “Fungible Tokens” (FTs) are like cash, NFTs are like baseball cards. Each NFT is unique, and holds a distinct set of data. It’s these same NFTs that will allow us to embed specific information pertaining to each tonne of carbon directly into a new blockchain token. However, these tokens typically represent only one unit of their respective type, hence you’d need to mint a new NFT for every tonne of carbon.

Enter “Unique Fungible Tokens” (UFTs), a new design combining the uniqueness of NFTs with the divisibility and fungibility of FTs. Each UFT that is created for a Carbon project and vintage would be capable of issuing a total supply of fungible tokens based on its verified emissions reductions. The FTs for that project can be traded like for like within a project, and at the trading parties discretion. The same exchange functionality and interfaces available in the wider blockchain world can be used without any additional integration — allowing rapid scale-up and avoiding the long time-frames involved in building international climate infrastructure from scratch.

Now we will have created a carbon unit, on the blockchain, that tells exactly when and where it was made, what standard it used, whether it has proper national permissions to be transferred across borders. As the blockchain is a tamper proof record of all transactions, the relationship between tradable carbon fungibles and a carbon initiative’s details is preserved forever, so we’ll always know where a carbon unit came from. In this fashion, we can create a trusted, secure unit of account within the Paris agreement that allows all countries, businesses and citizens of the world to link their climate goals, and march forward together. At any one time, some parties will be able to contribute more to the climate fight, and others less. By building a secure, transparent mechanism that incentivizes emissions reductions anywhere in the world, we can drive net global emissions down farther, faster, and give ourselves a fighting chance to beat climate change." (https://medium.com/@blockforclimate/putting-the-paris-agreement-on-the-blockchain-57eda4c481af)