The carbon credits market faces various challenges that hinder its effectiveness in mitigating climate change and reducing greenhouse gas (GHG) emissions. These challenges include ensuring the integrity of carbon credits, lack of standardisation, verification and monitoring complexities, price volatility, limited representation of project types, and insufficient market demand. By leveraging decentralised identifiers (DIDs), verifiable credentials (VCs), and distributed ledger technology (DLT), aligned with World Wide Web Consortium (W3C) standards, policymakers can enhance the effectiveness and credibility of carbon credit systems, promoting integrity, transparency, and inclusivity in the market. The G20 can play a significant role in advancing carbon market policies by fostering collaboration, promoting harmonisation and standardisation, supporting capacity building, and encouraging private sector engagement. It can also work to strengthen data privacy and security, advocate policy alignment, strengthen monitoring and compliance, and promote inclusivity and equity in market participation. Implementing these recommendations can achieve sustainable emission reductions and deal with climate change challenges globally.
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