Reviving Trust in Carbon Markets: Data, Tech and AI as the Fixes

 

Key Takeaways

1. The Role of Carbon Credits in Net-Zero Commitments

  • Scaling Net-Zero Commitments Globally:
    • 92% of the world’s GDP and trillions in AUM are committed to net zero.
    • Carbon credits play a critical role as a complementary tool after achieving maximum feasible reductions.
  • Pragmatic Use:
    • Companies must focus on their own emissions reductions before leveraging carbon credits to offset the residual impact.

 

2. Challenges in the Carbon Market

  • Credibility Concerns:
    • Issues like double counting, lack of additionality, and unverifiable projects persist.
    • Buyers face reputational, counterparty, and project permanence risks.
  • Slow Decision-Making:
    • Carbon credit project approval processes often take 6–12 months, limiting scalability.
  • Accessibility and Pricing:
    • Traditional methods limit individual and small-scale participation.
    • Lack of fractionalization in carbon credits results in inefficiency and wasted resources.

 

3. Technology as a Catalyst for Trust and Scalability

  • AI Applications:
    • Improved Verification: Tools analyse ESG reports, monitor project activities, and validate project credibility.
    • Efficiency Gains: Automates documentation like PDDs and enables faster due diligence for lenders.
    • Remote Sensing: AI combined with satellite data accelerates project monitoring and ensures accuracy.
  • Blockchain for Transparency:
    • Tokenization and decentralised ledgers enable fractional carbon credit purchases and improve transparency for buyers.
  • Innovative Platforms:
    • Initiatives like Razer’s carbon offset program fractionalize credits, allowing consumers to pay only for what they emit.

 

4. Building Consumer and Corporate Engagement

  • Consumer Transparency:
    • Projects must be specific and relatable to foster trust (e.g., identifying exact reforestation locations).
    • Gamification, like the "Ant Forest" initiative by Alibaba, engages consumers through tangible, traceable outcomes.
  • Corporate Integration:
    • Communication around carbon footprints can build a “second language” of sustainability, helping consumers and stakeholders understand environmental impact.

 

5. The Role of Standards and Regulators

  • Verification Standards Need Evolution:
    • Current standards often lag in adopting technologies like remote sensing and blockchain.
    • Recent advancements (e.g., Gold Standard digitisation) signal progress, but there’s more to achieve.
  • Incentives for Adoption:
    • Governments should promote mechanisms like carbon taxes to incentivise action while streamlining verification processes.

 

Closing Remarks from Panellists

Kenneth Ng (Razer):

  • Begin with transparent communication about carbon impact to build consumer awareness.
  • Make carbon metrics as familiar as calorie counts to embed sustainability in daily decisions.

Poyan Rajamand (SC Ventures):

  • Companies that ignore net-zero goals face liabilities as carbon taxes rise.
  • Start experimenting with carbon credits early to understand their role in meeting financial and environmental goals.

Wang Hanyuan (Climind):

  • AI and tech are essential for improving efficiency and scaling carbon markets.
  • Democratizing access to tools will bridge the gap between developed and developing regions in carbon credit generation.

Yuvaraj Dinesh Babu Nithyanandam (Infrablocks Capital):

  • Sustainability is no longer optional—it’s a business model.
  • Collaboration among stakeholders and embracing digital transformation are vital for long-term success.

 

Key Takeaway:

Carbon markets are at a turning point, with technology offering transformative potential to restore trust and scalability. Stakeholders across industries must act collaboratively, leveraging tools like AI and blockchain while embracing clear communication and transparent practices to achieve net-zero goals.

 

Watch Full Session

 

Speakers:

  • Kenneth Ng, Global Sustainability Lead, Razer Inc
  • Poyan Rajamand, Venture Lead (ESG), SC Ventures
  • Wang Hanyuan, Founder, Climind
  • Yuvaraj Dinesh Babu Nithyanandam, Executive Director, Infrablocks Capital

Moderator:

  • Praveen Tekchandani, Partner & ASEAN Climate Change and Sustainability Services Co-leader, EY

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