A Blockchain-based Decentralized Framework for Carbon Accounting, Trading and Governance

Abstract

This study proposes the relationship between carbon trading and blockchain and moves forward to find solutions to the major problem of reduction of carbon footprint on our planet. The “Kyoto Protocol '' of 1997 introduced the need for a mechanism to trade grants issued, allowing the restricted emissions of greenhouse gasses into the atmosphere, and creating an ecosystem for trading the surplus and deficiency of these credits/grants. This study aims at making this trade fraud free by using the powerful features of the blockchain like that of decentralization and a trustless environment by using different smart contracts that operate between multiple stakeholders in the ecosystem, the first contract creates a distributed ledger register for stakeholders, next quantifies CO2 consumptions and mints carbon tokens, third helps in verification of CO2 consumptions and the final contract is a DAO for voting on governance issues. Thus, this work proposes a blockchain based solution for trading of carbon credits to solve the problem of climate change.