The carbon credit system is a joint venture agreement between the country’s Ministry of Climate Change and Environment (MoCCAE), Venom Foundation, and the Industrial Innovation Group LLC, Gulf Business reported.
Minister for the MoCCAE Mariam bint Mohammed Almheiri said relying on blockchain technology for carbon credits offers several benefits to the country’s objectives. She pointed out that the move will provide higher levels of transparency in tracking carbon credits without reducing efficiency.
Other perks associated with moving the carbon credit system to blockchain include improved issuance, transfer, tracking, and calculations of the credits.
“The collaboration with the Industrial Innovation Group and Venom Foundation to establish the national system for carbon credits using blockchain is an important step in this field and reflects our determination to enhance the UAE’s climate action for a more sustainable future for us and future generations,” Almheiri said.
The three parties involved in the joint venture will be involved in creating a blockchain-based platform for issuing and registering carbon credits. While both the Industrial Innovation Group and Venom Foundation will provide technical solutions for building the platform, the Ministry will offer regulatory and legal guidance.
“Venom Foundation has provided an unparalleled solution, acting as a key infrastructure for a global ecosystem for Web3 applications, with superfast transaction speeds and unlimited scalability to meet governments’ needs,” Peter Knez said, head of the Foundation Council at Venom Foundation at the signing of the Memorandum of Understanding (MOU).
The push for the first-of-its-kind carbon credit system comes at a time when the UAE is preparing to host COP28, the United Nations (UN) annual conference on climate change.
According to Almheiri, the UAE is confident in reducing its emissions by 40%, a 9% spike over its former commitment. The Minister noted that with the help of innovative technologies like blockchain, the country could achieve climate neutrality by 2050.
UAE’s increasing embrace of blockchain
The UAE has expressed a keen interest in diversifying its economy from oil and tourism to become a global financial hub. In order to achieve its lofty ambitions, the country is turning to blockchain by establishing several free-trade zones to foster industry growth, like the Abu Dhabi Global Market (ADGM) and the Dubai Multi Commodities Centre (DMCC).
Dubai has already moved to attract global players in the industry following the establishment of a robust digital currency framework. UAE’s central bank has also taken an active role in developing a cross-border CBDC framework for the region, participating in several joint studies with its peers.
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