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With these tokens, we can calculate the net emissions by first subtracting the effect of Renewable Energy Certificates (REC's.) REC's offset the energy produced by non-renewable sources, so we'll need to get the non-renewable vs renewable energy mix in the original emissions tokens/assets from utility emissions data channel. Then we subtract the offsets to get the net emissions.
Possible Use Cases
Cap and Trade:
- The central bank could be the cap and trade authority.
- Tokens for allowable emissions could be issued to all members of the cap and trade regime.
- They can trade the tokens amongst themselves.
- As emissions are counted, during an audit, cap and trade tokens should be retired.
Green Bank:
- The central bank is a green bank, which raises funds for climate projects.
- For approved projects, the bank would issue emissions tokens to project developers based on the projected emissions reductions of the projects.
- When emissions reductions are verified, they are exchanged for tokens.
- The tokens can then be redeemed for money.
Outstanding Issues
Transfer of emissions down the supply chain and avoiding double counting are major issues to be addressed in the future. The problem is that emissions are counted in multiple ledgers, for example this document from Gold Standard describes how they could be counted in both offsets and national registries. See also the Gold Standard double counting guidelines document.