The Universal Protocol Alliance (UPA) has launched the first tradeable carbon token, according to a press release shared with BEG. This group comprises prominent players in the blockchain industry, including Bittrex Global, Uphold, Infinigold, Certik, and Ledger. UPA’s goal is to eventually digitize or tokenize every asset class in preparation for a new era of finance.
The newly introduced tradeable carbon token is dubbed ‘UPCO2’, represents a year of carbon dioxide or a similar reduction from ‘Verra-approved REDD+ voluntary projects in the world’s rainforests.’ This new carbon token is available for trading on the Uphold digital asset platform and marks the first of its kind to trade in a public blockchain ecosystem.
Democratizing the Global Carbon Market
Recent years have seen the demand for carbon skyrocket as the world became more environmentally aware of pollution’s looming risks. According to World Bank stats, the need for carbon credits is currently more than its supply by close to 4 times. Universal Protocol Alliance is among the groups that are presently working to offset this gap.
The UPCO2 token is built to democratize carbon demand and supply by introducing a global playing field for clearing prices, just like other commodities, including gold and oil. Each UPCO2 token will be backed by a Voluntary Carbon Unit (VCU), while Verra will issue the same certificate. This is the standard International Agency that permits the conversion of greenhouse gas to tradeable carbon credits.
Mathew Le Merle, the chairman of UPA, explained that supporting projects through credit purchases prevents deforestation in areas like the Amazon and Congo Basin. He went on to highlight the value proposition of UPCO2 carbon token as an asset of the ‘future’ investor,
“For a new generation of investors looking for more than mere financial return, UPCO2 offers attractive social, economic, and environmental benefits. At a key moment for climate change, UPCO2 allows people worldwide to do good for the planet and potentially do well for themselves.”
A Lucrative Macroeconomic Outlook
In the future, there is a likelihood that combating climate change will be among the dominant discussion points across the globe. World Bank stats indicate that only 22% of emissions are compensated for by humanity; meanwhile, the percentage of countries that operate in regulated carbon markets has grown from 40% to 70% within the past four years.
Uphold CEO and Co-founder of the UP Alliance, JP Thieriot, emphasized this trend noting the underlying potential of the UPCO2 carbon token,
“Combating climate change is likely to become the dominant economic issue of the next 20 years. The UPCO2 Token allows people everywhere to participate in this hugely important – and potentially lucrative – new market, as well as do the right thing for the planet.”
Notably, the Voluntary Credit Units offer some perks compared to the regulated credits, including global recognition and the ability to retain value until used or retired as compensation for carbon footprints.