Climate Futures + Chainlink: Welcome to Carbon Markets 2.0!
We are proud to announce that Climate Futures has integrated the Chainlink ETH/USD Price Feed live on mainnet to power the 1PLANET Marketplace DApp and the 1PLANET token (1PL) that is backed by carbon credits.
The 1PLANET smart contract uses Chainlink’s market-leading decentralized price oracle to limit slippage and enable stable pricing for users purchasing 1PL tokens with ETH. This critical service is needed for tokenizing the carbon credits that give the 1PL token real value and a positive eco-impact. 1PLANET empowers everyone to fight the climate crisis and participate in Carbon Markets 2.0.
Companies and governments use emissions trading to mitigate, or offset, their carbon emissions such as CO2. The unit they trade is called a “carbon credit” and it equals 1 metric ton of CO2. Mitigation targets for carbon emissions are set to multiply as governments and companies move to create a low carbon economy in order to combat the climate crisis. Carbon credits are globally traded eco-commodities — and carbon markets were valued at $214 Billion in 2019 — but these markets are mainly used today by large companies and governments, and not by individuals and smaller businesses. The real basis of a carbon credit is a carbon reducing activity or project, i.e. a climate project. The climate project produces and sells the carbon credit as a means to generate revenue to pay for the capital investment and operating costs, i.e. it accesses carbon finance.
1PLANET makes carbon credits and carbon finance available for everyone through the tokenization of these environmental assets. By utilizing blockchain technology 1PLANET also enables new use cases for carbon credits. With the rise of DEXs and Decentralized Finance (DeFi) a dedicated crypto-exchange or listing is not necessary for the trading of a tokenized asset such as 1PL. All that is needed is a platform to properly tokenize the asset and put it on the blockchain.
Carbon credits are trapped assets in the sense that they only exist digitally in centralized carbon registry systems, and can only be transferred and used between accounts within these registries. By tokenizing the carbon credits, we set them free: 1PL users can take delivery of the carbon assets outside the registries, and utilize them for new blockchain-based use cases.
How Chainlink Oracles Powers the 1PLANET ecosystem
With the tokenization of carbon credits, users are able to seamlessly transfer ownership in a decentralized manner. However, in order to enable users to purchase 1PL tokens using their existing cryptocurrency, we require a secure source of market data to ensure a fair exchange rate is given to users. Due to the blockchain oracle problem, smart contracts are unable to natively connect to external resources and APIs that provide such aggregated exchange rates. To overcome this issue, we required a tamper-proof and highly available oracle solution that could provide accurate pricing data at all times for our users. After deep due diligence, we found Chainlink to be the most secure and reliable solution on the market, offering the most complete set of features, including:
- High-Quality Data: Price data is sourced from multiple premium data aggregators, preventing data manipulation attacks and ensuring each price point reflects a volume-adjusted aggregate from all trading environments.
- Secure Oracle Nodes: Oracle networks are made up of numerous independent, security-reviewed nodes run by leading blockchain DevOps teams and data providers, protecting users against Sybil attacks.
- Layers of Decentralization: Chainlink Price Feeds are decentralized at the oracle and data source level, leading to highly available and manipulation resistant oracle solutions.
- Proven Oracle Infrastructure: Chainlink already secures billions of dollars in value for top DeFi applications, proving its ability to secure real value live on mainnet.
“Combining a digital commodity with a digital crypto-token makes total sense. We see blockchain and smart contracts as the future of carbon markets, and we have been preparing for Carbon Markets 2.0 through the development of our 1PLANET token and marketplace. We tested different oracle solutions and chose Chainlink due to the extreme reliability and flexibility of its solution. Our users can now experience practically zero slippage when they buy 1PLANET tokens with our DApp thanks to Chainlink,” states Jesse Uzzell, CEO of Climate Futures.
Why Carbon Markets Matter
Leading scientists around the world have stated this is our last decade to avoid catastrophic climate change by aggressively lowering our carbon emissions to the atmosphere. In order to meet the science-based reduction targets the private and public sector is mobilizing over $1 trillion a year in carbon finance, and much of this finance will be flow through carbon markets. Using market-based mechanisms to incentivize carbon reductions is much more attractive to companies and policy-makers, which is why carbon markets and emissions trading is set to expand next year as the new US administration is planning to take a leadership role on climate policy and immediately rejoin the Paris Agreement. Currently, compliance carbon markets exist in the EU, South Korea, China, Colombia, and even some states of the USA. In addition, voluntary carbon markets are being used more and more by companies all over the world.
Carbon Markets 2.0
Development of “Carbon Markets 1.0” started circa 2000 and was predicated by large methodology and institution building efforts from centralized bodies and organizations. These efforts created the first functioning carbon markets that were initiated as a response to the UN Kyoto Protocol Treaty. This established the necessary credibility and legitimacy for emissions trading and the market-based mechanisms created to “put a price on carbon”, and it created a completely new digital commodity: Carbon Credits. Carbon Markets 1.0 is heavily based on traditional documentation, reporting, approvals, and contracts which leads to many process delays and bottlenecks.
Now with rise of new information technology and the start of the Paris Agreement in 2020, we are entering a new decade of climate action and “Carbon Markets 2.0,” which will enable greater participation and more transparency through the utilization and melding of DLT, oracles, IoT, AI, 5G, remote sensing and other technologies. 1PLANET is at the forefront of this evolution by enabling active participation and usage of carbon markets by new demographics. Our initial efforts with 1PLANET are about improving the “downstream” side of the value chain, i.e. how to increase the access and utilization of carbon credits.
1PLANET promotes and monetizes decarbonization, and is a flexible and scalable blockchain-based system that is designed for people and companies of all sizes to easily apply carbon offsetting to their activities, ecommerce, supply chains, and logistics. We are currently onboarding more companies and partners to 1PLANET and testing pilot cases in the logistics industry. The 1PLANET community also benefits from finding products and services from partner companies in the Marketplace DApp.
Future expansion will be on the “upstream” side to move more of the project finance and carbon credit generation process onto the blockchain to provide more efficiency, confidence, and control against “greenwashing”. The generation process for carbon credits is actually a performance-based certification process, which relies heavily on what the industry calls MRV: Monitoring, Reporting, and Verification. Improving the speed and transparency of this MRV process will require greater utilization of oracle solutions such as Chainlink, and we are excited to further develop our collaboration with Chainlink’s oracle services to support more data-driven environmental actions and new climate projects.
Join Carbon Markets 2.0 and Help the Planet!
1PLANET democratizes access to carbon markets for individuals and companies of any size. With the 1PLANET Marketplace DApp users can buy 1PL tokens to support climate projects. These green projects reduce carbon emissions and generate the carbon credits backing the tokens. Since 1PL tokens represent carbon credits, they can also be used for carbon offsetting, i.e. the balancing of carbon emissions to the atmosphere by using certified carbon reductions.
The 1PLANET ERC20 smart contract automatically uses a tamper-resistant Chainlink Price Feed to update it’s internal ETH-USD rate after every time 1PL is purchased. Users may also manually trigger the Chainlink ETH-USD rate update by using the DApp if there is currently too much rate slippage. The usage of Chainlink oracles gives users fine control and ensures they are always provided a fair exchange rate sourced from multiple premium data aggregators who fetch pricing data from hundreds of on-chain and off-chain exchanges. Users can also calculate and offset their carbon emissions for different activities, including some crypto transactions, in the Marketplace DApp.
The 1PL tokens have all the core functionality of carbon credits along with new functionality enabled by blockchain technology. For example, 1PL tokens can be
- Transferred, gifted, traded OTC, or through crypto-exchanges
- Used for real-time transactional offsetting and micro-offsetting
- Banked for future use as a hedge against future carbon prices
- Used for promoting or rewarding activities by companies, events, etc.
- Used for embedding carbon neutrality into payments for goods and services
By now it might be more obvious why DLT has a role to play in implementing a low carbon economy in the coming decades. Blockchain can allow anyone to manage their carbon footprint and participate in carbon markets in a way that does not limit their freedom, but rather empowers them.
1PLANET is built on the idea that providing knowledge of your climate impacts and an easy means to reduce it, will empower you to live a more climate friendly lifestyle. We are not about telling people how to live. We want to provide you the means to make informed choices and the tools to take collective action against the climate crisis. Collectively, the Climate Futures + Chainlink community can have a major positive impact and support many carbon reducing projects that also have strong local benefits to communities around the world.
The team at Climate Futures is excited to launch the 1PL token that generates a positive impact in the real world, and we could not have done it without the support of Chainlink and its decentralized network of oracles. With secure oracles powering high quality price feeds for the 1PLANET ecosystem, it has never been easier to acquire carbon credits and help reduce the harm of climate change.
Chainlink is the most widely used and secure way to power universal smart contracts. With Chainlink, developers can connect any blockchain with high-quality data sources from other blockchains as well as real-world data. Managed by a global, decentralized community of hundreds of thousands of people, Chainlink is introducing a fairer model for contracts. Its network currently secures billions of dollars in value for smart contracts across the decentralized finance (DeFi), insurance and gaming ecosystems, among others.
Chainlink is trusted by hundreds of organizations to deliver definitive truth via secure, reliable data feeds. To learn more, visit chain.link, subscribe to the Chainlink newsletter, and follow @chainlink on Twitter.
About Climate Futures
Climate Futures was founded in 2005 in Scandinavia and is now headquartered in Miami, Florida. The team at Climate Futures has participated in the development of five different carbon project portfolios and assessed hundreds of carbon reduction projects.
More recently the company has developed the 1PLANET blockchain-based software platform for automated carbon offsetting that is designed to make climate action easy and more transparent. 1PLANET leverages 20+ years of experience with carbon markets and carbon accounting, and companies can easily offer carbon neutral services or products to their clients using the 1PLANET platform.
Third-party developers or companies may use 1PLANET to enable carbon offsetting in their apps, websites, and DApps. Contact us for more details for how to connect to our 1PLANET API or use the ERC20 Smart Contract and 1PL token in your application for carbon offsetting.