The idea to reduce obstruction to carbon market trading is relatively new and organizations require more information and use cases. Norvergence Team talked to various entrepreneurs and found that they are looking to effectively utilize blockchain technology as a means to streamline the development and sale of carbon credits. Let’s know more about it.
We are all aware of the ill effects of plastic pollution and climate change. Our environment, rivers, and air are under constant threat by corporations that control our resource supply chain. We are increasingly consuming resources that are not necessary and building up huge piles of garbage without any solution for its recycling.
A truly circular economy thus requires us to be aware of the whereabouts of all that goes into the making of the products/services that we consume every day. The time is ripe for us to achieve a circular economy through carbon invoicing. Generally, all sustainability aspects can be integrated into a carbon equivalent. While it will be apt to define carbon and all other forms of environmental pollutions through a carbon equivalent, other sustainability-related aspects of a purchased product/service can only be visualized through sustainability reporting practices of the companies. The general consumer has no choice left to participate in sustainability-related decisions but can make a separate buy for environmental commitments through a carbon invoicing mechanism. Carbon invoicing refers to a process where the product or service is sold with a separate invoice that takes care of the carbon/environmental pollution mitigation expenses. This separates the current business competition and profit-based operating model from carbon invoicing and carbon mitigation expenses. Carbon invoicing also adds to marketing efforts as consumers of today will prefer a green substitute for a non-green easily.
To enable a Carbon invoice based ecosystem, companies must have a running carbon accounting and reporting practice. The application of Blockchain technology provides anonymity and privacy to companies while generating individual field level carbon invoices. Apart from carbon invoicing, plastic/packaging and other sustainability areas must also find its way into an invoice. The pricing for such efforts should be separated to have consumer responsibility and accountability towards diligent use of resources and careful consumption practices. The following picture depicts a carbon invoice ecosystem.
A central carbon inventory acts as a repository of carbon data across the company and it accurately denotes a carbon invoice amount to each product and/or service. The carbon inventory is fed by data from all aspects of a business and is a standardized inventory that has been verified and validated by a national body. Raw material/service input value chain, its manufacturing/service design, transportation of product/delivery of service, and end-use assumptions for the product or service effects are the four core areas to be integrated with a central carbon inventory through Blockchain technology. The associated tokens from the carbon inventory run the carbon invoicing ecosystem where each product or service is dynamically allocated price/coins. Such an arrangement hampers unwilling consumers/climate deniers from being able to influence sustainability-related decisions negatively.
Even if a certain product is bought without paying for carbon by a certain class of consumers, the other consumers always fulfill the budget required for the carbon mitigation expenses. Such an arrangement is both voluntary and highly effective in understanding consumer sentiment towards green and clean products/services. The voluntary nature can be applied to a certain class of products/services while a certain class of products/services can have an enforced carbon invoice. Enforced carbon invoices and its associated product/service sales will inform regulators as to how the public is viewing climate change and how they are taking responsibility for the same.
The same product/service can also have a carbon invoice enabled to sell and a non-carbon invoice enabled sell point to make carbon invoicing non-enforceable and voluntary. The future consumer will drive sustainability decisions for big multinational corporations at a sell/buy point and Blockchain technology will enable such ecosystems for raising green capital and integrating consumer views into corporate sustainability decision making. To know more, please get in touch with me at email@example.com