The neverending, increasing human progress through the adoption of technology is a major reason why carbon emissions are rising. However, the rise of technological innovation may also help in mitigating greenhouse gas emissions in the atmosphere and companies all over the world are investing in this green movement. Over a fifth of the world’s largest companies have pledged to become carbon neutral, and recent events at COP26 include a US-China pledge to tackle climate change, amongst numerous other positive news.
A carbon market or greenhouse gas trading system is a method for reducing carbon dioxide (CO2) and other greenhouse gases by putting a price on releasing carbon. This method for cutting pollution has been successful in other fields prior, such as controlling pollutants in the Acid Rain Program, which successfully reduced sulfur dioxide (SO2) pollution, the main cause of acid rain.
Buying a carbon offset happens when a participant, which may be an individual, a company, or government voluntarily buys a unit of carbon, usually a ton, to counteract greenhouse gases released by their activities. However, a lot of problems arise from carbon trading on the traditional carbon markets, including ineffectiveness, weak regulation and implementation, instances of fraud, and ultimately little to no emissions reduction and major legitimacy issues for governments and the private sector.
According to a study by Pan, et. al., (2019), the aim of blockchain technology in the carbon industry is to “provide a fully decentralized system that can be done directly between producer and consumer”. Blockchain technology helps to strengthen the influence of individual consumers and producers on the market, which also gives consumers a high degree of autonomy in dealing directly. In addition to supply/demand trade, blockchain technology can also be applied in the process of metering, billing and settlement in the case of carbon markets.
Pertinently for carbon markets, incorporating blockchain technology and its concept of a distributed ledger in the field will revolutionize space. Each carbon offset transaction will have a clear record, with a timestamp and a unique cryptographic signature, ensuring that each transaction can be traced back to the historical record. This means that blockchain can theoretically completely solve issues of double accounting in carbon trading market. This will also increase efficiency and speed of transaction. The immutable ledger will be open for anyone to verify, making it easier to assess claims of individuals, companies and governments across the world.
Thanks to blockchain technology, any change in the books will be truly reflected in all copies, usually within a few minutes or even seconds, which prevents anyone from making mistakes or altering them maliciously. Specific to the application of carbon trading, blockchain technology can truly and reliably record and transmit information flow in carbon emissions trading. In such cases, fraudulent schemes in the traditional carbon market trading enterprise can be mitigated, and eventually, hopefully eradicated.
Carb0n.fi aims to be part of the change, and a key solution in the ecosystem! Carb0n.fi is a Singapore-based, ASEAN-focused blockchain solution funded by Antler.co, enabling DeFi 2.0 sustainability investing with its native token $ZRO and its carbon offset exchange. Carb0n.fi’s vision will incentivize real-world companies to invest and offset their carbon footprint in a seamless manner through a mobile App. The project is led by a team of experts in ESG consulting, blockchain marketing & community building, as well as full-stack blockchain development. Visit our website, follow us on Twitter, or reach out to us through email!
Originally published on Medium (medium.com/@carb0nfi) on 12 November 2021. Restored from an Internet Archive capture; text unchanged.