Leveraging blockchain technology to enhance transparency and efficiency in carbon trading markets

Abstract

The global energy sector is undergoing a significant transformation, driven by the emergence of ‘prosumers’ - individuals who generate and consume energy. This shift is redefining traditional roles and is propelled by a growing demand for sustainable and renewable energy. Prosumers utilize decentralized energy sources, such as solar panels and wind turbines, enhancing energy independence by producing their own energy and selling any surplus back to the grid. However, this decentralized landscape presents challenges in accurately tracking carbon emissions and establishing equitable pricing mechanisms. In response to these challenges, we propose an innovative blockchain-based peer-to-peer (P2P) trading platform for carbon allowances. This novel approach gives prosumers a decisive influence over energy pricing, ensuring a more equitable distribution of energy resources. The blockchain framework benefits from decentralization, promoting transparency, security, and an immutable record of energy transactions and carbon emissions. To evaluate the platform’s effectiveness, we will initiate a real-world pilot project within the Education City Community Housing (ECCH) to gather empirical data over one year. The pilot will involve various participants—including prosumers and traditional consumers—and will meticulously monitor energy production, consumption, and trading activities. By comparing this decentralized system with traditional energy models, we aim to assess its impact on carbon emissions, user satisfaction, and overall economic viability, paving the way for a sustainable energy future. • Web-Based Energy and Carbon Trading Marketplace. • Collect and analyze energy and carbon trading market dynamics in a residential neighborhood market. • Blockchain platform to verify the feasibility of the use of a decentralized trading application.