Trust Network For A Sustainable World

^{Distributed ledger technologies are the hidden key to wrangling emissions data.}

The price of pollution in the EU has just become higher.

In a landmark agreement, the EU established the world’s first major carbon border tax. The game-changing measure adds a pollution price to certain imported goods, while also imposing strict emissions standards. The problem is that even if they wanted to, most companies are not ready to comply.

A study of Fortune 500 companies’ greenhouse gas emissions shows that there is a lot of inconsistency and underreporting when it comes to emissions inventories. Considering these companies account for around 27% of global emissions, tackling global climate change will not happen unless we can accurately measure and report large companies’ carbon footprints.

How do we do it? Blockchain.

Three scopes, many ways to report

Achieving net zero carbon emissions is a challenge that requires coordinated action from governments, businesses and individuals worldwide. It will not happen without significant changes in current industry structures and practices or the use of new technologies and business models.

On the other hand, achieving net zero offers a significant growth opportunity, as the transition to a low-carbon economy is likely to create new markets and businesses. By adopting an innovative approach, companies can position themselves to take advantage of these opportunities and help drive the transition to a net zero future.

In terms of reporting, greenhouse gas emissions fall into three “scopes.” Scope 1 is emissions that are a result of the organisation’s operations (such as production), while scope 2 covers indirect emissions created by the consumption of purchased electricity, steam, heating or cooling. Scope 3 includes all indirect emissions, and spans everything from employee commutes to logistics.

The good news is that distributed ledger technology (DLT) can help reconcile emissions across scales due to their public and global nature.

There is a lot to keep track of. The good news is that distributed ledger technologies (DLT), of which blockchain is a type, can help reconcile emissions across scales due to their public and global nature.

This makes it possible to connect data along supply chains, which helps to link emissions from different sources, such as production (scope 1), electricity (scope 2) and upstream and downstream business partners (scope 3). Due to the complex nature of these relationships, DLTs can help prevent double counting and ensure that all emissions are accounted for.

DLTs can help implement a global carbon accounting ledger because they offer a transparent and secure way to record and verify emissions data. This can help overcome the challenges of siled reporting, where different organizations may have conflicting or incomplete information.

A public and decentralized ledger can create a system of checks and balances that allows for transparent governance and reduces the risk of collusion, conflicts of interest and tampering. This is critical because only when emissions are accurately accounted for can we achieve a net-zero carbon economy. In addition, looking at the emissions of the materials used to make products and how these materials are transported and disposed of can help companies better understand their environmental impact and take steps to reduce it.

It is important to have a public and transparent ledger that can be accessed and verified by anyone.

Transparency for cleaner air

In order to effectively meet the challenges of carbon accounting and emissions reconciliation, it is important to have a public and transparent ledger that can be accessed and verified by everyone. This helps to ensure that all emissions are accounted for and prevents double counting.

To achieve this level of transparency, companies must make their operations more open and transparent. This may involve sharing information about their emissions, procurement and supply chain practices. By doing so, business leaders can help support the transition to a carbon-free economy. As a bonus, procurement and supplier intelligence can be used to identify and address scope 3 emissions. This can inspire organizations to rethink the design of their products to reduce their environmental impact throughout their life cycle.

A symbolic strategy

One way organizations can compensate for the remaining emissions is by purchasing tokens from ecological projects that are transparent and verifiable. These projects include initiatives such as tree planting, carbon sequestration and renewable energy generation.

The tokens represent a certain amount of emissions that have been reduced or avoided through these projects. By purchasing these tokens, organizations can offset their remaining emissions and support efforts to reduce atmospheric carbon dioxide (CO2) levels and mitigate climate change. This can be done voluntarily, and organizations can choose the projects they want to support based on their reputation and the verifiability of their emission reductions.

The voluntary carbon market (VCM) allows companies and individuals to compensate for their carbon emissions by purchasing carbon credits from projects that reduce or avoid greenhouse gas emissions. This can support the transition to a low-carbon economy and provide a financial incentive for organizations to reduce their emissions.

Towards a net zero future

Several initiatives are underway to increase transparency and trust in VCM, which will help it grow and mobilize billions of dollars in funding for urgent climate projects.

One of the most important ways to reduce CO2 in the atmosphere is through carbon sequestration, which involves removing CO2 from the air and storing it permanently in underground reservoirs. This can be done through techniques as simple as planting trees to absorb CO2 from the atmosphere or using direct air capture technology to siphon CO2 directly from the air into underground storage. While these techniques are still being developed and refined, they have the potential to reduce atmospheric CO2 levels and mitigate climate change.

There is some evidence to suggest that blockchain technology can also contribute to the regeneration of nature.

For example, the water and waste management company Suez uses blockchain to record all stages of the transfer of sludge from wastewater to agricultural land. By providing a transparent and secure overview of this process, blockchain can help ensure that the sludge is safely and responsibly applied to the earth and can support the regeneration of the land. This application of blockchain technology can help promote more sustainable and resilient environmental practices and support the transition to a more circular economy.

Combating climate change will require actions that are global and transparent – ​​two qualities embodied by distributed ledger technology.