**Toucan: Revolutionizing Carbon Offsetting with Blockchain and Cryptocurrencies**
*Hackathon Sparks Innovation*
A few years ago, near Trafalgar Square in London, Raphaël Haupt and James Farrell found themselves engaged in a conversation about leveraging blockchain and cryptocurrencies to combat climate change. Their discussion at the hackathon led to the birth of Toucan, a project aiming to revolutionize carbon offsetting.
*Understanding Carbon Offsetting*
The voluntary carbon offsetting market is based on a simple premise. While companies and individuals strive to reduce their carbon emissions, it’s inevitable that they will have a residual amount they can’t eliminate immediately. This is where carbon credits come into play. By “retiring” a credit, an organization can emit a tonne of carbon and still achieve carbon neutrality. These credits can be generated through various methods, from reducing emissions to funding environmental projects.
*Challenges of the Current System*
The current carbon offsetting system is chaotic, governed by a network of private standards bodies operating their own registries. Each body has its own formats, methodologies, and definitions, making it difficult to harmonize and work with them.
*Toucan’s Solution*
Toucan acts as a market infrastructure, unifying physical carbon credits from diverse registries into standardized carbon tokens on a single blockchain registry. These tokens are grouped into “pools,” from which users receive tradable crypto tokens. The first pool, BCT (Base Carbon Tonne), represents a mix of credits, such as those from tree-planting or pollution-reduction, to offset one tonne of carbon emissions.
*Benefits of Toucan’s Approach*
By consolidating the system onto one registry, Toucan aims to prevent double-reporting of credits and categorize projects based on age and quality. It also customizes tokens to align with the buyer’s specific needs, allowing corporates to selectively choose nature-based or technology-based solutions and even specify the geographical origin of the credits.
*Toucan’s Vision*
John Hoopes, also known as John X in the crypto community and in charge of Toucan’s strategy, elaborates on the company’s approach. “Corporates are looking to align offsetting activities with their brand. Maybe they want to only do nature-based solutions, they only want to do technology-based ones, they don’t want to do stuff in Brazil or Indonesia or wherever they’re based,” says Hoopes. “Our system allows us to create those categories of carbon tokens.”
Through innovative use of blockchain and cryptocurrencies, Toucan endeavors to bring much-needed order and transparency to the carbon offsetting market to make a meaningful impact on combating climate change.
