Make carbon measurable again

For years, the green transition has run on the assumption that good intentions, backed by rough estimates, would be enough. Companies bought carbon credits. Financial markets created “green” products. Regulators rushed to set frameworks. But the ability to measure, verify and trust what is being claimed lagged behind. The result is a system that has grown fast, but not solid.

What is emerging in response is a new class of solutions that fall under what we call Green Tech: the use of financial technology (data, AI, digital platforms) to make sustainability measurable, verifiable and financeable. If green activities cannot be measured with precision, they cannot be priced correctly, and if they cannot be priced, capital will not flow where it is most needed.

Across very different domains (carbon markets, financial portfolios, and corporate reporting) the same flaw keeps resurfacing: we have tried to reward sustainability without agreeing on how to measure it.

Take carbon markets. The dominant model still relies on projections: how much CO₂ a forest will absorb, how much a project will offset. The alternative now being proposed is conceptually simple: measure first, then certify, then trade. Technologies already allow real-time monitoring of carbon flows, opening the door to instruments such as “green coins”, i.e. digital units issued only once absorption has actually occurred. The shift addresses the problem of replacing promises with verified facts.

A similar issue runs through sustainable finance. Today’s “green” portfolios are often built on ESG scores that disagree with one another and rely heavily on backward-looking data. Yet investors do not earn returns on the past. New approaches use data and AI to estimate a firm’s decarbonization potential: not how green it is today, but how much it can improve, because the most valuable assets in the transition may not be the greenest companies, but those most capable of becoming green.

Then there is corporate reporting. Regulation is moving fast, especially in Europe, where firms are increasingly required to disclose emissions across their supply chains. But measurement quickly becomes elusive once we move beyond direct emissions. What counts as a company’s real footprint when production is fragmented across thousands of suppliers? Here again, technology offers a way forward: combining large-scale datasets, network models and AI to reconstruct emissions not just one step up or down the supply chain, but across entire production networks. The result is a more objective and far less manipulable picture of environmental impact.

Seen together, all these advances address the lack of measurement standards that are robust, scalable and widely accepted. Fixing that changes the logic of the system.

Once emissions and offsets can be measured reliably, they can be tokenized, traded and financed. Once firms can be assessed on credible forward-looking metrics, capital can flow toward those genuinely transitioning. Once supply-chain emissions can be computed consistently, reporting becomes comparable and enforceable. In this way, sustainability becomes something the market can actually process.

Of course, measurement alone does not solve everything. Markets need governance. Prices need stability. And here, too, the analogy with finance is instructive. Just as central banks influence liquidity and interest rates, new institutional designs, such as a “Green Coin Central Bank” managing the supply of verified carbon units, could help steer the system in real time., replacing opacity with transparency.

Skeptics will argue that technology is no silver bullet. They are right. But the status quo is not neutral. It is a system in which uncertainty is embedded from the start, and where incentives often reward appearance over substance. We have spent the past decade building markets, products and regulations on top of shaky measurement foundations. It may be time to invert that logic. Start with verifiable data. Build financial instruments on top of that. Then design regulation that reflects reality, rather than trying to correct for its absence.

If that happens, carbon becomes a measurable flow, like electricity, water, or any other input and output in the economy. And once something is measurable, it can be priced, traded and, ultimately, managed more effectively.