Compliance Kart (a UP based Start-UP) is bringing India’s 1st Voluntary Digital Carbon Credit Exchange
3 min read
Extreme weather events like tropical storms, wildfires, severe droughts and heat waves are effect of Climate change. This is negatively affecting our crop production, causing disruption to animals’ natural habitats, and more. The emission of greenhouse gases is the main reason that causes global warming (and therefore climate change). CO2 emissions act like a blanket in the air, trapping heat in the atmosphere, and warming up the Earth. Because of this a large number of Countries, cities and organizations are concerned about becoming carbon neutral. Today, the whole world is talking about carbon offsetting. At Global level, the Kyoto Protocol an international treaty was executed which extended the 1992 United Nations Framework Convention on Climate Change that commits state parties to reduce greenhouse gas emissions, based on the scientific consensus that global warming is occurring and that human-made CO₂ emissions are driving it.
Our honorable Prime Minister Shri Narendra Modi announced that India will achieve net zero emissions by 2070. In essence, net-zero implies the employment of mechanisms that would offset the amount of carbon emitted by a country into the atmosphere by absorbing an equivalent amount of greenhouse gases from the atmosphere. Under such mechanism, a best fit way is of maintaining India’s available Carbon Credit. The carbon credit limits the emission to one tonne of carbon dioxide or the mass of another greenhouse gas with a carbon dioxide equivalent (tCO2e) corresponding to one tonne of carbon dioxide. Carbon credits are generated from projects around the world that pull Greenhouse Gases (GHGs) out of the atmosphere or keep emissions from being released. Each time a project verifies they have reduced, avoided, or destroyed one metric tonne of GHG, one carbon credit is created. So, as a country India needs to preserve its Carbon Credit and make available for use by local or domestic industries. This is very much needed to maintain India’s Balance of Emissions of CO2e. Considering the importance of these Carbon Credits, recent amendment in Energy Conservation Act, 2001 has been to promote for domestic Carbon Credit Market.
But currently, India does not have voluntary carbon trading market to provide information of price accurately, to provide standard contract pledge and manage arrangement for long-term offtakes. In absence of domestic marketplace for this, in India there is chance of high reputational risk because of absence of due diligence resulting to high WACC, non-realization of Net-Zero AUM and no standard reporting.
Compliance Kart Pvt. Ltd. is building solution to solve this need by bringing a voluntary digital marketplace to serve the entire value chain.
Poornima Mishra, an Environmentalist and Co-Founder of Compliance Kart says that we will securitize carbon credits into tradable and fungible securities with real time settlement and transparent pricing. There will be no conflict- of –Interest, because we are equal opportunity providers.
According to Alok, the Carbon Finance Expert and Founder of Compliance Kart this exchange solution is going to be a Social Innovation which will have a traditional trading architecture of commodity exchange but distributed ledger technology of blockchain will be used to securitize carbon credit into digital tokens (receipts) embedded with clear line of ownership between the carbon credit held in the registry/depositories and the digital receipt (token). If the owners of tokens will be interested for physical delivery in place of token the delivery is possible like commodity market.
Aayushman Harish Narayan, the CTO of Compliance Kart says that as the ComplianceKart Exchange will be blockchain-based, it will allow to create a decentralized and a hybrid platform, which mirrors commodity markets. The use of blockchain automates and simplifies the laborious manual processes that are usually involved with OTC carbon trading. The Smart Contract implemented makes it easy for users to trade and settle with a clear and immutable record on our system.
As per Krishna (Co-founder and Renewable Energy Industrialist) the ComplianceKart will represent the commodities market of the future in India where commodities and collateral can be tokenized, creating an entirely new approach to securitized token trade domestically and globally. The Compliance Kart Pvt. Ltd. is a very young company incorporated in Sep.’2020 and based in GautamBudh Nagar, U.P. There is team of Finance Professionals, Environmentalist, Renewable Energy Expert and Global Leader behind the formation of the Compliance Kart Pvt. Ltd. Karanvir Singh, global thinker and serial entrepreneur is behind this team. Karanvir Singh has has been contributing to India’s economic growth at large.
