IBM and Veridium Labs are collaborating to assist in the transformation of the carbon credits market. The blockchain technology developed by IBM will be used in this endeavor and the aim is to make it easier for businesses to offset environmental footprints.

Veridium Labs, which came out of a startup incubator run by EnVision Corporation builds sustainability solutions on the blockchain platform of Stellar (XLM) for businesses. The solution Veridium has developed will make carbon credits exchangeable for other similar assets.

About The Paris Climate Agreement

Some of the initial environment credit tokens will include REDD+ from Infinite EARTH which is already incorporated in the Paris Climate Agreement. One problem that businesses have been facing is that the value of the carbon credits fluctuate. The value of a carbon credit can change depending on the product.

“Our digital environmental assets are designed to help companies and institutional investors purchase and use carbon credits to mitigate their environmental impacts today, and even hedge their potential carbon liabilities risks in the future,” Todd Lemons, the co-founder and chief executive officer of Veridium, said.

Challenges From Potential Global Warming

The token issued by Veridium will thus provide a new way of addressing challenges posed by global warming. This has come about due to deforestation and the carbon footprint that mankind has left behind. In the last five decades over 50% of agricultural land has been lost to industrial and urban development.  40% of the biodiverse tropical forests in the world have been mowed down for purposes of agriculture. Additionally up to 80% of the fresh water in the world is contaminated.

IBM first partnered with Stellar last year on a platform for payments which allows the rapid clearing and settling of cross-border payments. The blockchain of IBM is permissioned and thus only trusted parties in a limited number are allowed to access it. Other firms that IBM has partnered with in the realm of blockchain technology Nestle and Walmart where the distributed ledger technology is being used to trace food contamination.