How can blockchain technology be applied when the national carbon emissions trading market starts?
Roast Boy Creators Alliance丨On July 16, the national carbon emissions trading market launched online trading. The power generation industry became the first industry to be included in the national carbon market, and more than 2,000 key emission units were included. country's carbon market will become the world's largest market covering greenhouse gas emissions.
Excessive carbon emissions have brought damage to human society, and the cost has been passed on to the whole society, resulting in the loss of overall social welfare. In response to this global challenge, much of the international community's approach to date has focused on climate agreements aimed at establishing a costly carbon market and thus a carbon compliance market. There has also been some progress in voluntary carbon markets, which allow companies to offset carbon emissions by funding certified greenhouse gas reduction projects, such as energy efficiency projects, renewable energy projects or rainforest restoration.
The carbon trading market is an important development direction in the future, and it is also an important strategic field for our country.
Relevant information shows that in 2013, China's first carbon trading market - Shenzhen carbon trading market opened. In the following years, Shanghai, Beijing, Guangdong, Tianjin and many other places successively opened up local carbon trading markets. Statistics show that in 2016 and 2017, the carbon emission intensity decreased by 6.6% and 5% respectively.
In September 2020, President Xi Jinping delivered an important speech at the general debate of the 75th session of the United Nations General Assembly, pointing out that my country "strives to reach its carbon dioxide peak by 2030 and strives to achieve carbon neutrality by 2060."
According to the report, during the "14th Five-Year Plan" period, my country's carbon market will realize from a single industry to the inclusion of multiple industries, from the start of trading to continuous and stable operation, and carbon trading will usher in greater market transactions.
However, there are many pain points and problems in carbon trading at present. Examples include double counting, transparency, trustworthiness, and scalability.
The carbon emission trading market is a special trade based on a market mechanism led by the government. Historical data shows that my country's carbon trading market has followed the policies issued by the government and its activity has increased. Therefore, the emission reduction system at each point lacks long-term certainty. At the same time, due to the implementation of regional emission reduction policies in line with China's national conditions, the punishment system is not uniform, but is stipulated by local management agencies.
At the same time, in market transactions, the cost of obtaining information for traders is high, which hinders traders from actively participating in market transactions. There are not only differences in the disclosure of information including the total amount of quotas, the proportion of free quotas and paid quotas among the pilot projects, but also selective. This not only leads to information differences among trading markets, but also low transparency leads to traders' lack of confidence in the market. In addition, insufficient public information prevents carbon emitting companies from effectively assessing and managing their carbon assets. They only rush to trade when the compliance date is approaching to make up for the shortage of their allowances or sell excess allowances.
In addition, under the carbon emission trading system under the traditional model, asymmetric transaction information and opaque transaction process are prone to occur, which makes black-box operations and data falsification possible; resulting in cumbersome transaction processes, high regulatory costs, and unified pricing. Under the condition of formation, the market cannot achieve unity, resulting in lower and lower market activity.
Technologies such as blockchain are likely to help improve the current situation of this market and increase the credibility of the market. Work in this area is still in its early stages, but some progress has been made.
Under the blockchain carbon trading mode, all carbon trading-related information is based on the blockchain distributed ledger technology and is stored in multiple nodes to form a data chain to avoid excessive intervention by centralized nodes on the authenticity of information. At the same time, the information distributed on the data chain is jointly maintained by all participating entities, and each authorized user has the right to query carbon trading and carbon emission history information, which realizes collective supervision of data and greatly enhances information openness and transparency. In addition, the information on the blockchain has a historical traceability function after being stamped with a time stamp, which realizes the tracking and tracing of carbon information, and increases the cost and difficulty of information fraud.
Under the blockchain transaction mode, the data storage method of distributed bookkeeping will reduce the dependence on the central node. Under the conditions of collective supervision and traceability, the role of the regulatory agency will be weakened, and the construction and cost of the supervision structure will be effectively reduced. . In the transaction process, the application of "smart contracts" will greatly improve transaction efficiency and enhance the vitality of the carbon trading market without the need for matching links of intermediary agencies.
There have been actual cases where blockchain technology has been applied to energy transactions.
In point-to-point electricity transactions, especially for distributed energy, the energy alliance chain developed on the blockchain network can realize point-to-point transactions between users and generators. In the determination of line loss, the loss of conversion between different energy sources, the long-distance transmission of energy, and the line loss caused by other operations can all be notarized through the blockchain in the future, and the information will be more transparent. When there is a cross-energy market, transactions between multiple energy systems and their price information can be recorded, and on this basis, the marginal prices of various types of energy in various regions can be generated in real time.
In order to improve the settlement efficiency of the blockchain microgrid, a credit system based on local government issuance, supervision and recovery can be designed: energy credits. Enterprises and users in all power circulation links on the microgrid can use energy credits to reach business transactions. In addition, business transactions between enterprises in the links of power generation, transmission, distribution, and electricity sales can also be controlled by smart contracts, and smart meters can automatically realize transparent settlement of power transfers, ensuring the openness and transparency of power prices.
In 2020, Nadia Hewett, program lead for blockchain and distributed ledger technology at the World Economic Forum, said that blockchain works well in providing transparency in carbon emissions reporting.
"If you can get organizations to report their carbon emissions on a blockchain network, a single platform can improve transparency among partners. In turn, it becomes easier to compare different numbers." Carbon The lower cost, low friction, and high-efficiency implementation of emissions trading is an important technical means for my country to achieve carbon neutrality and carbon peaking, and requires more application of blockchain technology.
