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Trading carbon credit tokens on the blockchain

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  • Swinkels, Laurens

Abstract

Innovative financial services may help to reduce global carbon emissions. We examine the activity in trading of voluntary carbon credits on a new blockchain-based exchange, which reduces the amount of intermediation in this market. Over the years 2021 and 2022, about 3.8 million tCO2e tokens have been tokenized on the carbon token exchange, of which about 2.8 million tCO2e tokens have been burned, leaving 1.0 million tCO2 tokens available for purchase on the exchange. Over these two years, the total secondary market trading turnover has been $ 21.2 million. Trading liquidity is limited to only a few types of carbon credit tokens. The prices of these most liquid tokens move in line with prices of similar carbon projects available for purchase elsewhere.

Suggested Citation

  • Swinkels, Laurens, 2024. "Trading carbon credit tokens on the blockchain," International Review of Economics & Finance, Elsevier, vol. 91(C), pages 720-733.
    • Handle: RePEc:eee:reveco:v:91:y:2024:i:c:p:720-733
    DOI: 10.1016/j.iref.2024.01.012
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    References listed on IDEAS

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    Cited by:

    1. Guocong Zhang & Sonia Chien-I Chen & Xiucheng Yue, 2024. "Blockchain Technology in Carbon Trading Markets: Impacts, Benefits, and Challenges—A Case Study of the Shanghai Environment and Energy Exchange," Energies, MDPI, vol. 17(13), pages 1-15, July.

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    More about this item

    Keywords

    Blockchain; Carbon credits; Cryptocurrency; Finance; Investing;
    All these keywords.

    JEL classification:

    • G10 - Financial Economics - - General Financial Markets - - - General (includes Measurement and Data)
    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions
    • P18 - Political Economy and Comparative Economic Systems - - Capitalist Economies - - - Energy; Environment
    • Q51 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Valuation of Environmental Effects
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy

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