Carbon Avoidance Credit

Subtype

Definition: Carbon avoidance credits are counterfactual offsets that represent the avoidance of the emission of a certain amount of GHG in the atmosphere. Defined by material impact and additionality.

Description

Carbon avoidance offsets (a.k.a. “counterfactual carbon offsets”) represent avoided CO2 emissions in the context of this report, that is, CO2 which would have been released in the Earth’s atmosphere without the existence of the project financed by the asset. According to an analysis by the Boston Consulting Group, avoidance offsets currently represent about 80% of carbon offset supply.

Example

Toucan is building infrastructure for tokenized carbon markets.

Toucan's Nature Carbon Ton (NCT) is an ERC-20 token initially running on Polygon. Every NCT is backed 1:1 with a nature-based carbon token held in the carbon pool, most of which derive from carbon avoidance projects. Anyone can redeem NCT for TCO2 tokens, which can be retired on-chain.

NCT: a nature-based carbon token on Toucan ProtocolToucan Protocol