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Let's talk about carbon credits?

We are in 2022 and what was considered a distant future a few years ago has already become present. Talking about the importance of carbon credits is more than necessary, especially given the urgency of the issues related to environmental preservation and climate change.

You may already know that our main initiative to generate abundance is to contribute to the environmental restoration of the country, right? The Abundance Token is a tree tokenization project to generate new forests, carbon credits, and many other socio-environmental benefits.

If you still have any questions, please read on to learn all about it.

What is a carbon credit?

Simply put, we can say that one carbon credit is equivalent to one ton of CO2 that is no longer emitted into the atmosphere, which helps to prevent pollution and try to control the effects of climate change.

The generation of credits works like digital certificates that can be transferred from one person (individual or company) to another. Thus, the person responsible for planting the trees does not necessarily have to be the only one responsible for the credits generated. They can be sold, traded, and, of course, used to offset carbon emissions through carbon credit retirement.

What does the Abundance Token have to do with carbon credits?

Another important detail on this subject is to understand that there are different ways to generate carbon credits, and talking about forests we can differentiate between REDD+ and ARR

The first is linked to the preservation of green areas so that they are not deforested and continue to generate oxygen for the atmosphere. The generation of REDD+ credit is linked to the preservation of an area where there is economic pressure for deforestation. 

The second is related to the initiatives to restore the environment by planting trees, forming new forests and decarbonizing the planet - this is the carbon credit generated with the Abundance Token (ATK). Our first planting made 100,000 trees available, but the goal is to plant 1 billion trees in Brazil by 2030.

Each ATK is backed by one tree, which generates between 0.15 and 0.4 tons of carbon. With tokenization, the trees become digital assets and can be transferred between people through the blockchain, which is a huge database where digital information is recorded and crypto-activities are generated that can be traded on the market. Then the holder of the carbon credit can use it to fulfill environmental programs and offset carbon, or he can choose to trade his credits at some opportune time.

How is the carbon credit market?

It all started with the first Intergovernmental Panel on Climate Change (or IPCC) in 1988, which was created to discuss countries' environmental policies and the decarbonization process. After that, several other meetings, conventions, and institutions arose around climate change, which was increasingly becoming an urgent problem.

It can be said that the origin of the carbon credit market comes from COP3 (1997) and the famous Kyoto Protocol, which proposed environmental targets for participants and created the Clean Development Mechanism (CDM). This idea was transformed into the Sustainable Development Mechanism (SDM), and the UN took charge of establishing the SDGs (Sustainable Development Goals) in the 2030 Agenda.

Among the definitions about carbon credits, it was approved that partnerships could be established (between countries, people, companies, etc.) so that the more polluting agents could buy credits from the less polluting ones, trying to reach a more balanced and less disastrous situation for the planet. 

Trading could take place in the regulated and voluntary market, with prices usually ranging from $1 to $137 per ton of carbon. 229 billion were traded in 2020, about five times more than the volume traded in 2017 (data from Refinitiv Financial Solutions). Studies that analyze the potential of carbon markets, estimate that the voluntary markets may increase 15 times by 2030, and may be worth US$ 50 billion (source: Valor Investe).

While the regulated market operates in some countries with limits imposed by the state, the voluntary market continues to develop with companies and individuals interested in generating, selling, and purchasing carbon credits. The ESG trend has given even more strength to this type of transaction, especially since many organizations need to evolve in this direction.

Has your company already started the decarbonization process? Now is the time to act! Take advantage of the Abundance Token solution, which is the most practical and secure way for you or your company.

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