♻️Renewable Energy Certificates

When corporations purchase renewable energy certificates (RECs) in order to meet energy sustainability goals there is trust that each unit of electricity was generated from a renewable energy source. This trust is baked into the energy certificate because there are many state and regional agencies that track RECs.

This is called a compliance market because regulators have mandated that REC’s are used to meet energy targets. Water does not yet benefit from this framework because it is entirely voluntary. A voluntary water market is one in which corporations must voluntarily decide to purchase water credit tokens to meet their own water stewardship goals. Achieving water ‘positive’ or water ‘neutrality’ is a not mandated by the state or regional water authority and so there is not an inherent trust that the means being used to achieve these water goals is consistent.

Tokenized water credits help solve this trust issue by putting all of the revenant water information in the public domain.

This means that anyone can verify where a water credit was generated and how the water was produced. This transparency is what will ultimately create trust in the water space and allow regulators to enact laws around how much of the water supply can and should be met by buying water credits (called a water portfolio standard).