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A blockchain based platform to provide a central directory of voluntary offsets based on a decentralized architecture. The decentralized permissioned architecture allows recognized participants around the world and in different functional roles (developers, brokers, buyers, verification bureaus, standards organizations) to contribute data about voluntary carbon offsets. Built on a permissioned network such as Hyperledger Fabric, members of the network could contribute data about voluntary carbon offsets, including the projects details, quantity issued, background documentation, and any trades that occur. Fabric is a high speed ledger, faster and with lower energy usage than public proof of work or even proof of stake ledgers. We could use IPFS or another decentralized storage mechanism to store documentation of the offsets and use md5 to verify that documents have not been altered.
The solution would be an open source code base which includes Fabric chain code, scripts to access the network, plus a basic web UI for demonstration purposes. Initially the data could come from the Berkeley Carbon Trading Project of different offsets registries, so the schema would be based on their data as well. This directory could then be used to:
- Register trades between parties and serve as a price discovery service
- Allow peer review of quality of offsets
- Identify possible duplicate selling of projects
A proposed governance and incentive structure:
- This decentralized network would be governed like an open source project.
- The initial members serve as the maintainers/committers who could add new members.
- Only members are able to read and write directly to the network.
- The maintainers will host the basic web UI as a publicly available resource.
- Members could use their access rights to create their own UI, apps, or branded research services for their clients or users.
- If members do not actively contribute additional data or contribute incorrect data, they would be removed by the maintainers.
- Initially the governance and validation of the data would be informal, but as the project grows, it could be formalized with a DAO voting scheme.
The decentralized permissioned architecture allows recognized participants around the world and in different functional roles (developers, brokers, buyers, verification bureaus, standards organizations) to contribute data about voluntary carbon offsets. An incentive structure could link upgraded usage of data from the directory to the contributions. For example, contributors could obtain data for publishing their branded market reports. A verification process would be set up to validate the data from the participants.
This directory would not directly allow trading between participants. It is for information purposes only. However, even without trading, this directory could greatly enhance the voluntary offsets market place by:
- Providing a price discovery service
- Allow peer review of quality of offsets
- Identify possible duplicate selling of projects
References
- Securing Climate Benefit: A Guide to Using Carbon Offsets
- These Countries have Prices on Carbon. Are they working? (NY Times)
- Taskforce for Scaling Voluntary Carbon Markets Final Report
- Comments on the Initial Recommendations of the Taskforce on Scaling Voluntary Carbon Markets (TSVCM) from Berkeley Carbon Trading Project and affiliated groups
- Startup That Rates Carbon Offsets Finds Almost Half Fall Short
- Top Airlines’ Promises to Offset Flights Rely on Phantom Credits
- NPR Reporting on Forest Carbon Credits Gets It Wrong in 5 Ways
- Carbon Direct Commentary on Release of the Voluntary Offsets Database
- Microsoft Carbon Removal - Lessons from an Early Corporate Purchase
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