There are currently 17 emission trading schemes and more than 40 different carbon compliance units in Russia. Nevertheless, there exists certain organizational constrains and obstacles that prevent a smooth carbon trading system, such as risks of double counting and a lack of transparency in emission trading exchanges.
There also has been no common platform that could unify different carbon exchanges. To address this issue, the Russian company, “Russian Carbon Fund,” has created a blockchain platform for carbon trading.
Blockchain technology is noted for its security since data are stored on hundreds and thousands of computers connected to one network. In order to crack the system, access is required to all of the linked computers, not just one. Moreover, blockchain guarantees transparent transactions as each action is recorded and stored in the system. The technology also reduces transaction costs and reduces time per transaction.
Russia’s environmentally focused blockchain platform is called the Decentralized Autonomous Organization—Integral Platform for Climate Initiatives (DAO IPCI). DAO IPCI is “decentralized and a fully independent public blockchain ecosystem based on smart contracts for any kind of environmental assets and liabilities.”
The DAO IPCI is a unique platform that ensures integrity and transparency of the process of carbon trading and excludes the risks of double counting of carbon units. DAO IPCI simplifies the process of carbon trading. This attracts investments in environmentally friendly technologies.
The DAO IPCI blockchain technology platform should be replicable by other countries. This project has drawn significant attention from the international community and it won an international Planet Tech competition. It has also been presented at the international conference ‘Collision’ held in New Orleans.
In March 2017, the first world carbon credit transaction was conducted using blockchain DAO IPCI. The Russian Carbon Fund purchased carbon credits from the African focused Aera Group. The acquired credits are intended to offset Russia’s carbon footprint.
The Russian Federation’s INDC proposes that by 2030 it will reduce its GHG emissions by 25% to 30% below its 1990 level (UNFCCC, 2015). The DAO IPCI blockchain technology platform will help Russia achieve this goal.
Russia Carbon Fund official website: https://russiacarbon.org/
Decentralized Autonomous Organization «Integral Platform for Climate Initiatives»: http://ipci.io/