This is a proposal. Please leave your feedback as comments.
Objectives
This project will develop an emissions calculator ledger which could be used by multiple parties in a supply chain to record emissions data. It could then calculate the net emissions for a product which is transported through the supply chain. The goals are:
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The calculator could be run as simulation for analysis and baselines or used to record actual activities to calculate real emissions. It will integrate the upstream emissions of the products with the emissions of the supply chain, such as transportation, storage, and processing, to enable a true comparison. The end result is the emission of the product plus its transportation and logistics divided by units of products delivered at destination.
Use Cases
The destination emissions of the products could be used for regulatory compliance, such as the EU carbon border tax, and for meeting customers' climate objectives. They could also be used to help investors assess the risk of different products. Finally, by comparing the actual results versus simulations of business-as-usual alternatives, these calculations could be used to prove emissions reduction, certify products as low carbon, and create carbon offsets.
Longer term, this calculator plus the Emissions Tokens Network Project could be used to solve the hard problems of reducing emissions in the supply chain:
- Cost of carbon footprinting - We're free.
- Creating incentives for suppliers - Customers, either big ones or a group of small ones, could set up their own "cap and trade" scheme: Declare their supply chain emissions targets which decline over time, aligning with the Paris Agreement (-50% by 2030, zero by 2050.) Allocate tokens to suppliers based on those targets. Suppliers can trade their emissions with each other but over time must reduce them as a whole.
- Providing turnkey solutions - Again using tokens, major customers could either invest in emissions projects directly and provide them to their customers (like Apple) or provide financing or guarantees for financing for suppliers.
- Verification - Could be done through this ledger.
- Going deep - Suppliers could get their suppliers on the ledger, and tokens could be transferred further up the supply chain.
Sample Supply Chains
Fruit and Produce: Fruit and produce is harvested at a farm, transported by truck, processed at a distributor facility, shipped by freight (air, truck, or rail) with refrigeration, and delivered to a grocery store or supermarket. Optionally we can consider storage at the grocery store or supermarket as an additional step in the supply chain to the final consumer.
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Carbon Capture and Storage (CCS): GHG emissions are captured at the point of burning natural gas, for example at a power plant, and transported via pipeline to underground storage. What's interesting here is that the product transported has very high GHG emissions content relative to the transport process itself.
Implementation
Hyperleger Fabric with multiple members from the supply chain. REST API for access from members. Cactus for integration with outside ledgers (ie trade finance or supply chain ledgers.)
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