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The climate crisis has led to the development of projects that are focused on reducing carbon emissions through market mechanisms. These projects include cryptocarbon startups, which use blockchain to accelerate emissions reduction by scaling up voluntary carbon markets (VCMs). Through document analysis of the white papers of cryptocarbon projects and case examples, this study examines how blockchain financializes carbon markets in ways that are distinct from traditional carbon markets. This paper argues that blockchain-driven financialization may worsen the governance of VCMs by creating new opportunities to profit from carbon-as-asset. Versatile blockchain technologies facilitate the multiple transformation of traditional carbon credits into various forms of crypto-linked assets and promote their circulation across broader crypto markets, obscuring the spatial linkages between conventional carbon credits and their underlying conservation projects. The overemphasis on financial rewards over actual climate benefits makes cryptocarbon projects vulnerable to an influx of carbon projects and credits with questionable emissions impact, and susceptible to fluctuating interest in cryptocurrencies and other tokenized assets. This may hinder cryptocarbon projects from realizing their original goal of tackling the climate crisis by "fixing" carbon markets.
Gordon Kuo Siong Tan (2024) studied this question.