Critics of NFTs often point to their environmental impact as one of the main reasons NFTs should be outlawed. However, many critics do not realize that not all distributed ledger technologies (DLTs) are environmentally taxing. Additionally, NFTs can and have been used to protect the environment. In this article, we look at how NFTs can help fight climate change.
NFTs as carbon offsets
Carbon offsets are tokens or certificates that represent actions that remove greenhouse gases from the atmosphere, such as carbon sequestration and renewable energy. These can be purchased by any organization, whether a business or an individual, seeking to reduce their carbon footprint.
Carbon offsets lead to indirect emissions reductions. 2017 survey, they really work. However, current carbon offset systems are not perfect. “Of particular concern is that traded reductions may be ‘double counted’. Environmental Defense Fund.[Carbon offsets can be] It is counted once by the country of origin and again by the receiving country (or other entity) when reporting emissions inventories. ”
Double counting effectively misrepresents the amount of greenhouse gases removed from the atmosphere. Blockchain technology can be used to reduce the possibility of double counting. If the project leads to a verifiable reduction in greenhouse gases, it will be reviewed by a certifying body that issues a carbon offset NFT to a carbon-neutral DLT. This process creates a permanent record of greenhouse gas reductions that, when sold, shows that the reductions were claimed. Projects like Aerial have already started using this concept, and more are likely to emerge.
NFTs as virtual power plants
As it stands, the power grid is managed by a centralized entity. Current processes suffer from problems such as energy loss.US power grid lose enough energy Four times more electricity to all seven Central American countries. This is because it relies on sending energy over long distances to reach its destination. Projects like the Brooklyn Microgrid use a distributed energy approach to reduce energy waste.
Distributed energy projects are powered by various renewable energy producers throughout the region. In doing so, energy can be sent from a nearby location to its final destination. These renewable energy resources are often packaged as ‘virtual power plants’.
The Brooklyn Microgrid Project utilizes blockchain technology to allow solar panel owners to tokenize their surplus energy and sell it to others on any marketplace. Similarly, virtual power plants representing energy from various renewable sources can be created by him as NFTs and traded to reduce dependence on fossil fuels.
NFTs as carbon credits
Carbon credits are often confused with offsets, but differ in important ways. Credits represent emissions reductions and offsets represent greenhouse gas removals. Carbon credits are commonly associated with cap-and-trade systems and may be required by law in certain industries.
Blockchain technology and NFTs have long been recognized as technologies that could improve the current carbon trading system. In fact, the White House has acknowledged blockchain as a potential next step. Executive Order 14067because we asked relevant institutions to produce reports on possible applications in the carbon market.
Importance of choosing the right DLT
NFTs can be used to combat climate change, but it’s important to note that not all DLTs are the same. Proof-of-work DLT efforts to reduce emissions are inefficient due to the excessive energy requirements of these technologies. Still, ledger technologies such as Hedera, Binance and Solana have low energy requirements and are ideal for carbon credits, offsets and virtual power plants.
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*All investment/financial opinions expressed by NFT PLAZA are based on the personal research and experience of the site moderators and are intended for educational material only. , the product should be thoroughly investigated.

NFT artist. musician. Founder of Crescendo.
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