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Although blockchain is an emerging technology, it doesn’t have several real-world applications yet, especially at a large global scale. The green capital market has already been tested and proven the applicability. Blockchain technology opens ecological markets allowing emissions trading for enterprises. The issue is about the release of carbon dioxide into the atmosphere, and the issuers are mainly power generating companies using fossil fuels. Emission trading is a process initially bought by the Kyoto Protocol in 2005, to reduce the harmful effects of carbon dioxide emissions into the atmosphere and prevention of climate change. The emissions released have high carbons which are measured by carbon units, each equivalent to one tonne of carbon dioxide. Carbons released in the emissions are limited, and hence, they are in demand and are available for purchase on the exchange. This process is called cap and trade while other models like tax or credit-based and transaction-based or trade are also developed in the market.
The trading of carbon units mainly helps to reduce the environmental damage and to stimulate companies to reduce harmful emissions which can effectively develop their economy. Though the process looks easier, there exist issues like high transaction costs, fraud, and non-transparent disintegration. In 2017, the first carbon unit’s transaction took place with blockchain technology at DAO IPCI blockchain ecosystem which was built on Robonomics digital platform by Airlab. With the help of including verification, registration, and environmental commodities market functions, a user can allocate and manage environment assets and liabilities through blockchain. DAO IPCI is a peer-to-peer market transaction between both parties responsible for environmental damage and those who try for offsetting instruments providers. DAO IPCI is a technology that ensures reliability and transparency of transactions and also checks for the possibility of global interactions with market institutions. In March 2017, a pilot transaction was made between Aera Group in France and Russian Carbon Fund under Blockchain Climate Standard. This explains one of the Robonomics network implementations that open market and investment opportunities for many countries and even for the small businesses in the industry to improve efficiency and sustainability.
Blockchain can create incentives for enterprises to enrich their production levels and become more energy efficient. The technology helps to create and develop environmental assets and liabilities market. Furthermore, ensuring efficient design at the initial stage of development will boost the productivity of the enterprises along with critical factors to control environmental damage and effectively develop their economy.
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