Blockchain and IoT-Powered Carbon Credit Exchange for Achieving Pollution Reduction Goals

Abstract

Abstract Carbon dioxide (CO2) emissions primarily contribute to global warming and climate change. The immediate source of CO2 emissions is burning fossil fuels like petrol, diesel, natural gas and coal, accounting for 78% of total emissions. CO2 emissions have risen since the late 1800s, reaching a record high of 33.1 billion tons in 2019. The paper proposes a Blockchain and IoT-based framework to track and trade carbon credits, aiming to reduce carbon dioxide emissions and mitigate their impact on global warming and climate change. We consider electrical energy as one use case for carbon emission and credit trading. The framework will monitor the energy usage of each entity, recording real time carbon emissions in a tamperproof blockchain ledger. Each entity will receive carbon credits based on the recorded emissions, which can then be traded on a blockchain exchange. This will enable entities with higher emissions to offset their emissions by purchasing credits from entities with lower emissions. The blockchain ledger ensures the authenticity and transparency of the carbon emissions data, promoting a secure and efficient solution for reducing carbon emissions. The paper also outlines a reward and penalty mechanism for consumers, encouraging them to reduce their carbon footprint and contribute to a more sustainable future. The paper discusses the blockchain and IoT-based carbon credit exchange architecture, including algorithms for estimating energy consumption, carbon emissions, reward, and penalty. The paper concludes with a proof of concept implementation using the Ethereum platform and a performance evaluation of the algorithms. The paper proposes a comprehensive solution for reducing carbon emissions and mitigating their environmental impact, leveraging the strengths of blockchain and IoT technologies.