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Solving the carbon problem One blockchain at a time

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Veeterzy – Unsplash

Climate change is one of the most difficult collective problems the world has ever faced to date: if we are able to limit the our carbon emissions fast enough to avoid the catastrophic effects of climate change is still much under discussion.

In the search for solutions to this global challenge, much of the work to date has focused on climate agreements that create markets to a price on carbon This creates voluntary carbon markets that have made some progress, allowing companies to offset their carbon emissions by funding certified greenhouse gas reduction projects such as energy efficiency projects, renewable energy projects or rehabilitation of rainforest.

markets present challenges concerning double counting, transparency, and a, trust and scalability. Technologies like blockchain have the potential to assist ng and bring integrity to these existing markets. Although it is very early, there is progress in this area.

Improving existing markets

Article 6, paragraph 2, of the Paris Climate Agreement proposes the concept of transfer of mitigation results (ITMO) internationally as a unit of cooperation and transfer of carbon impact value. Although the rules of & nbsp; this tool is currently being written, the goal will eventually be to create a system that connects all the coal accounts of all the countries in the world.

In response to the Paris Agreement, based in Canada Blockchain for Climate Foundation is a non-profit startup focused on improving global carbon markets and is working on architecture of a blockchain tool linking the country's carbon accounts. Founder Joseph Pallant explains: "We want to support and accelerate this goal by building an intelligent contract protocol that tracks ITMOs using the stack and scales of the Ethereum technology, to adapt to the use of all countries in the world. There will be enough data embedded in each of the tokens so that the provenance and admissibility of each ton of emission reductions is clear. "

For this purpose, Blockchain for Climate has developed a draft specification for a new token type called Token Fungible Tokens (UTF) that can contain unique information of each credit, such as the place of origin, for example, being a reforestation project or renewable energy, to be able to validate the authenticity of a carbon credit while making the token fungible & nbsp; which can allow the trading of many UTFs, creating liquidity in the carbon credit market.

Pallant sees the ledger technology distributed as a major resource in global carbon trading cooperation. The public and transparent nature of information encourages collaboration between nations and reinforces trust in the system. Pallant also believes that if the market grows to the size it takes to be able to trade the trillions of tons of carbon in an effective global compliance market, "you will need to monitor rapid and repeated unit transfers and group those units in different transactions … and you will need these transactions to be updated in real time ". The innate triple-block accounting of Blockchain (credit, debit and date / time) will allow this speed and scalability necessary for an effective global trading system.

Blockchain for the Climate Foundation platform, still in its infancy presents the potential to improve and bring connectivity to the global carbon market.

But how could blockchain and digital payments be used to create new price signals or markets to accelerate the transition to a global low-carbon economy?

& nbsp; Historically, carbon markets have been highly centralized, opaque and in many cases illiquid, resulting in a very limited market participation. The technology behind the blockchain has the potential to open existing and create new carbon markets for a wider range of actors, including small businesses and individuals. Distributed ledger technology can add greater integrity to the system, eliminate the need for intermediaries and allow more direct and simple channels for purchase and trading. This ultimately makes it easier for everyone to participate in carbon markets and bring out new peer-to-peer and business-to-consumer markets.

Poseidon is a company at the forefront of the voluntary carbon markets in the UK, with their blockchain called Stellar. Focused on retail integration and assigning carbon credits to everyday purchases, the company was born out of the knowledge that blockchain technology could not only reduce the barrier to entry in the carbon credit markets but also , for the first time, allow to reduce carbon credits. in per transaction or quantity of product. The CEO of Poseidon, Laszlo Giricz, explains that "when we realized that the transactions of star blockchain could be carried out in three seconds and at such a low cost, we realized that now we were able to carry out transactions in grams of For the first time carbon credits could be integrated into retail transactions at the point of sale ". As a result, consumers can see the carbon impact of a single purchase and have the opportunity to offset their impact in real time. Giricz also found that people are constantly amazed at how small this cost of compensation is, that people are generally very happy to pay for it and that the immediate sense of reward is quite compelling.

Poseidon recently collaborated with the US ice -cream giant Ben & amp; Jerry's and stellar blockchain network to break down carbon credits into microtransactions that can be linked to every scoop of ice cream in their London Soho store, allowing Ben & amp; Jerry and their customers see carbon emissions from point-of-sale purchases and the opportunity to offset their impact in real time. The project started as a pilot in their London store but it was so successful that it is still live four months later and has so far already protected over 4,000 trees.

Noah Silliman – Unsplash

Poseidon also joined forces with Liverpool City Council with the goal of offsetting the city's carbon emissions by 110% 2020. Giricz explains that [19659003] "Together with the City Council we will work with a range of companies throughout Liverpool, including those in the retail sector and infrastructure, schools, transportation and waste collection services.The goal is to make the cost of carbon of every product or service in Liverpool and providing the opportunity, through our sales interface, to be easily compensated. "

There are other blockchain companies like Poseidon that emerge in this space but the work is still very nascent. The full potential of the blockchain to unlock new markets has yet to be unleashed.

.

The technology behind blockchain can help increase trust and adapt to existing carbon markets and this important work is already starting to happen. But perhaps a greater opportunity remains unused in exploiting the potential market creation that supports cryptocurrencies and blockchain, to accelerate the transition to a low-carbon world. "

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Climate change is one of the most difficult collective problems the world has ever faced to date. If we are able to limit our carbon emissions quickly enough to avoid the catastrophic effects of climate change, it is still very much under discussion.

In finding solutions to this global challenge, much of the work to date has focused on climate agreements that create markets to put a price on carbon, thus creating a compliant carbon market. There are also voluntary carbon markets that have made some progress, allowing companies to offset their carbon footprint by funding certified greenhouse gas reduction projects such as energy efficiency projects, renewable energy projects or rain forest rehabilitation.

Both markets present challenges of double counting, transparency, trust and scalability. Technologies like blockchain have the potential to help improve and bring integrity to these existing markets. Although it is very early, there is some progress in this area.

Improving existing markets

Article 6.2 of the Paris Climate Agreement proposes the concept of mitigation results transferred internationally (ITMO) as a unit of cooperation and transfer of value of carbon impact. Although the rules of this tool are currently written, the goal will ultimately be to create a system that links all the coal accounts of all the countries in the world.

In response to the Paris Agreement, Blockchain based in Canada for Climate Foundation is a non-profit startup focused on improving global carbon markets and is working on the architecture of a blockchain tool that links the carbon accounts of the country. Founder Joseph Pallant explains: "We want to support and accelerate this goal by building an intelligent contract protocol that tracks ITMOs using the stack and scales of the Ethereum technology, to adapt to the use of all countries in the world. There will be enough data embedded in each of the tokens so that the origin and eligibility of each ton of emission reductions is clear. "

For this purpose, Blockchain for Climate has developed a draft specification for a new token type called Token Fungible Tokens (UTF) that may contain unique information about each credit, such as the place of origin, such as reforestation or renewable energy project, to be able to validate the authenticity of a carbon credit, making it possible to use the token that can enable the trading of many UTFs, creating liquidity in the carbon credit market nio.

Pallant sees the ledger technology distributed as a great resource in global cooperation in carbon trading. The public and transparent nature of information encourages collaboration between nations and reinforces trust in the system. Pallant also believes that if the market grows to the size it takes to be able to trade the trillions of tons of carbon in an effective global compliance market, "you will need to monitor rapid and repeated unit transfers and group those units in different transactions … and you will need these transactions to be updated in real time ". The innate triple-block accounting of Blockchain (credit, debit and date / time) will allow this speed and scalability necessary for an effective global trading system.

Blockchain for the Climate Foundation platform, still in its infancy presents the potential to improve and bring connectivity to the global carbon market.

But how could blockchain and digital payments be used to create new price signals or markets to accelerate the transition to a global low-carbon economy?

Historically, carbon markets have been highly centralized, opaque and in many cases illiquid, resulting in a very limited market participation. The technology behind the blockchain has the potential to open existing and create new carbon markets for a wider range of actors, including small businesses and individuals. Distributed ledger technology can add greater integrity to the system, eliminate the need for intermediaries and allow more direct and simple channels for purchase and trading. This ultimately makes it easier for everyone to participate in carbon markets and bring out new peer-to-peer and business-to-consumer markets.

Poseidon is a company at the forefront of the voluntary carbon markets in the United Kingdom, with a blockchain called Stellar. Focused on retail integration and assigning carbon credits to everyday purchases, the company was born out of the knowledge that blockchain technology could not only reduce the barrier to entry in the carbon credit markets but also , for the first time, allow to reduce carbon credits. in per transaction or quantity of product. The CEO of Poseidon, Laszlo Giricz, explains that "when we realized that the transactions of star blockchain could be carried out in three seconds and at such a low cost, we realized that now we were able to carry out transactions in grams of For the first time carbon credits could be integrated into retail transactions at the point of sale ". As a result, consumers can see the carbon impact of a single purchase and have the opportunity to offset their impact in real time. Giricz also found that people are constantly amazed at how small this cost of compensation is, that people are generally very happy to pay for it and that the immediate sense of reward is quite compelling.

Poseidon recently collaborated with US ice -cream giant Ben & Jerry & # 39; if the Stellar blockchain network to break down carbon credits into microtransactions that may be associated with each scoop of ice cream in their London Soho shop , allowing Ben & Jerry & # 39; if their customers to see carbon emissions from point-of-sale purchases and the opportunity to offset their impact in real time. The project started as a pilot in their London store, but it was so successful that it is still alive four months later and has already protected over 4,000 trees.

Poseidon also joined forces with the City Council of Liverpool to offset the city's carbon emissions by 110% by 2020. Giricz explains that

"Together with the City Council, we will work with a number of all of Liverpool, including those in the retail and infrastructure, schools, transport services and waste collection sectors.The goal is to make transparent the carbon cost of any product or service in Liverpool and to provide opportunity, through our sales interface, to be easily compensated. "

There are other blockchain companies like Poseidon that emerge in this space but the work is still very nascent. The true potential of the blockchain to unlock new markets has not yet been unleashed.

The technology behind blockchain can help increase trust and adapt to existing carbon markets and this important work is already starting to happen. But perhaps an even greater opportunity is not exploited to exploit the potential market creation that supports cryptocurrencies and blockchain, to accelerate the transition to a low-carbon world.

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