2.3 Blockchain enabled carbon trading

In order to promote the global greenhouse gas emissions, reducing global carbon emissions, the United Nations in December 1997, passed the Kyoto protocol, carbon emissions and carbon emissions quotas has since become valuable assets, can be exchanged as a commodity in the market, the difficulties of the country, region or enterprise can purchase these assets to the carbon exchange.
At present, the world is facing a persistent and severe climate challenge, and there is still a huge gap between the 2030 target of determined Contributions and the target of the Paris climate Agreement. Pricing carbon emission rights and building carbon market trading markets have become key policy tools for the international community to promote low-carbon development and technological innovation. In addition to the carbon markets already in operation, many other countries or regions are planning or considering establishing carbon trading systems (including national systems in China, Russia, Japan, Mexico, Brazil and regional systems in the United States). With more and more countries or regions considering carbon market as a policy tool for energy conservation and emission reduction, carbon trading has gradually become the core pillar of global policy to address climate change.
After years of development, blockchain has changed from 1.0 digital asset stage, 2.0 smart contract application stage, to 3.0 distributed commercial application stage. The application scenarios of blockchain technology have extended from digital currency, intelligent assets, mining mechanism and manufacturing to government management, supply chain, product traceability, digital finance, copyright, medical, agriculture, forestry and other fields. As a green industry, the carbon emission industry is also constantly introducing blockchain technology to break the inherent development limitations of the carbon emission market in the past. Due to the characteristics of decentralization and security, blockchain can be applied to various fields, especially the carbon market. In the carbon market, the most important thing is the carbon emission data, quota and quantity, price, as well as the authenticity and transparency of the data of each control and emission enterprise. The central server cannot absolutely guarantee the data security, and the opacity of the information makes it impossible for many institutions and individuals to really participate. These problems can be solved using blockchain technology, through which every ton of carbon and every transaction can be traced back, avoiding tampering and asymmetric information.
At the same time, the traditional carbon asset development process time is very long, involved in enterprises, government regulators, carbon assets exchange, the third party inspection and certification bodies, average length of more than one year, and each participating nodes will have a lot of file transfer, prone to errors, affecting the accuracy of the final structure. And blockchain can also solve this problem, through a multi-node network, records can be shared, which not only improves timeliness, but also ensures accuracy. If the carbon asset development method is compiled into a smart contract, then the carbon asset credits of each control and emission enterprise can be automatically calculated, and the whole process becomes transparent, open and accurate. This can not only reduce the development time of carbon assets, but also improve the production efficiency of carbon assets and reduce the production and management costs of carbon assets.