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Toucan's Quest to Tackle Climate Change Stalls but Blockchain Technology Holds Promise

Updated: Oct 18, 2023

By Jaya Bijoor

Toucan is a decentralized carbon market platform that aims to tackle climate change by tokenizing carbon credits. Toucan is a bridging protocol that turns real-life carbon credits into tokens that can be used on a blockchain. These tokens, referred to as Tokenized CO2 or TCO2, represent retired yet unclaimed carbon offsets. They’re retired from their source registry to prevent double counting but haven’t been claimed against any emissions yet. And so, it still represents a specific amount of verified carbon offsets. Toucan achieved significant milestones, tokenizing over fifty climate projects, bridging over twenty million tons of CO2, retiring over fifty thousand tons of CO2, and introducing more than $4 billion in carbon trading volume to its network.

However, in July 2022, Toucan was put on hold due to Verra’s, the largest nonprofit carbon credit registry, decision to stop tokenizing retired credits.

In 2021, Toucan emerged with an ambitious plan to utilize blockchain technology to disrupt the carbon credits system. They wanted to compel polluting companies to pay higher carbon credit prices or adopt more environmentally friendly practices. Toucan aimed` to enable the purchase of carbon credits by creating a new token on the blockchain. However, many credits were connected to old, ineffective projects with little environmental impact. As a result, Verra, the central issuer of carbon credits, prohibited the conversion of retired Verra credits into cryptocurrency tokens. This initial relationship opened the door for potential collaboration, but

Verra is leaning towards centralized bank-led initiatives to expand the carbon credit market on a larger scale. However, Toucan believes Verra's actions reflect its significant influence, and blockchain will play a role in this forthcoming innovation stage.



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