Distributed ledger technology is the hidden key to working with emissions data.
The price of pollution in the European Union has risen.
In a landmark deal, the EU has established the world’s first major carbon border tax. This landmark measure imposes stringent emissions standards while adding a pollution price to certain imports. The problem is that most companies aren’t ready to comply, even if they wanted to.
A survey of the greenhouse gas emissions of Fortune 500 companies reveals many inconsistencies and underreporting of their emissions inventories. Given that these companies account for about 27% of global emissions, tackling global climate change will only happen if we can accurately measure and report the carbon footprint of large companies. .
How do you do that? blockchain.
Three Scopes, Different Reporting Methods
Achieving net zero carbon emissions is a challenge that requires concerted action by governments, businesses and individuals around the world. It will not happen without significant changes to current industry structures and practices, or the adoption of new technologies and business models.
Achieving net zero, on the other hand, presents significant growth opportunities as the transition to a low-carbon economy is likely to create new markets and businesses. By adopting innovative approaches, companies can capitalize on these opportunities and accelerate their transition to a net-zero future.
For reporting purposes, greenhouse gas emissions fall into three ‘scopes’. Scope 1 covers emissions attributable to an organization’s operations (such as manufacturing) and Scope 2 covers indirect emissions caused by consumption of purchased electricity, steam, heating or cooling. Scope 3 includes all indirect emissions, from employee commuting to logistics.
Fortunately, distributed ledger technology (DLT), due to its public and global nature, can help coordinate emissions across scopes.
It has a lot to track. The good news is that distributed ledger technology (DLT), a form of blockchain, can help align emissions across scopes due to its public and global nature.
This enables data to be connected along the supply chain, correlating emissions from different sources such as production (Scope 1), electricity (Scope 2), and upstream and downstream business actors (Scope 3). helps. Due to the complex nature of these relationships, DLT helps prevent double counting and ensures that all emissions are accounted for.
DLT helps implement a global ledger for carbon accounting by providing a transparent and secure way to record and verify emissions data. This helps overcome the challenges of siled reporting where different organizations may have conflicting or incomplete information.
A public distributed ledger can create a system of checks and balances that enables transparent governance and reduces the risk of collusion, conflicts of interest, and tampering. This is very important as we can only achieve a net zero carbon economy if our emissions are accounted for accurately. In addition, looking at the emissions of materials used to manufacture products and how those materials are transported and disposed of can help companies better understand and reduce their environmental impact. help you take action.
Having a public and transparent ledger that anyone can access and verify is essential.
Transparency to clean the air
To effectively address the challenges of carbon accounting and emissions reconciliation, it is imperative to have a public and transparent ledger that everyone can access and verify. This ensures that all emissions are accounted for and prevents double counting.
To achieve this level of transparency, companies need to make their business more open and transparent. This may include sharing information on emissions, procurement and supply chain practices. In doing so, business her leaders can help her transition to a net zero carbon economy. As a bonus, you can use sourcing and supplier intelligence to identify and address your Scope 3 emissions. This allows organizations to rethink the design of their products to reduce their environmental impact throughout their lifecycle.
One way organizations can offset their remaining emissions is by purchasing tokens from transparent and auditable ecological projects. These projects include initiatives such as afforestation, carbon sequestration and renewable energy generation.
Tokens represent a fixed amount of emissions 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, allowing organizations to select projects they wish to support based on reputation and verifiability of emissions reductions.
The Voluntary Carbon Market (VCM) allows companies and individuals to offset 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 financial incentives for organizations to reduce their emissions.
Towards a net-zero future
Several initiatives are underway to increase the transparency and credibility of VCM. This will allow VCM to grow and mobilize billions of dollars for urgent climate projects.
One of the key ways to reduce atmospheric CO2 is through carbon sequestration, which involves removing atmospheric CO2 and permanently storing it in underground reservoirs. This can be achieved through simple techniques such as planting trees to absorb CO2 from the atmosphere or using direct air capture technology to siphon CO2 directly from the air into underground reservoirs. These technologies are still being developed and improved, but 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, water and waste management company Suez uses blockchain to record every step of transferring sludge from wastewater to farmland soil. By providing a transparent and secure record of this process, blockchain will help ensure that sludge can be safely and responsibly applied to the earth to support land reclamation. This application of blockchain technology will help promote more sustainable and resilient environmental practices and support the transition to a more circular economy.
Fighting climate change will require global and transparent action. These two characteristics are embodied by distributed ledger technology.