Climatecoin’s ‘CO2 token’ is a crypto-asset stapled to carbon credits. One CO2 token is a digital proxy of one carbon credit (that is, one ton of carbon dioxide equivalent, or ‘1tCO2e’).
The World Bank’s latest report on carbon pricing for 2018 suggests that the total value of the carbon market, including more than 50 established and emerging schemes at regional, national and sub-national levels, is valued at US$82 billion. This represents a 56 per cent increase compared to the 2017 value of US$52 billion.
The market price of 1tCO2e is set to continue to rise over the next decade.
There are two reasons for this:
First, countries are expected to set more ambitious targets for reducing carbon emissions as part of the ‘ratchet mechanism’ under the Paris Agreement.
Second, this ratcheting up of ambition will likely result in internationalization and expansion of carbon trading to incorporate up to 80 per cent of the greenhouse gas emissions that are not reflected in carbon market activity today.
To reflect the general upward trend in the price of 1tCO2e, Climatecoin has increased the price of the CO2 token to US$8. This will become effective as of July 17th.
“The price has been set based on the the World Bank report, which indicates that 54 per cent of the emissions covered are priced higher than US $10 per ton of CO2”, says José Lindo, CEO of Climatecoin.
Further work to strengthen the functional link between the CO2 token and carbon markets is under way. The intention is to help make CO2 token pricing a reference point for carbon markets at an international level.
To this end, Climatecoin is developing an algorithm to bring greater realtime and accurate pricing of the CO2 token as carbon markets around the world mature to reflect the goals of the Paris Agreement.
Benefits to investors in the CO2 token:
- For early investors, this development helps to fulfill a commitment we set out in our initial roadmap.
- For new investors, you can buy CO2 tokens in the knowledge that pricing reflects the performance of real-world carbon markets, rather than of crypto-assets such as Ether.
This will be followed by the Climatetrade Platform that is due for launch in September 2018. Both are key elements to guarantee the best and most secure investment experience for government, business and industry, and individual holders of the CO2 token.
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