Decentralized blockchain networks consume a lot of energy for verifying and validating transactions and smart contract data via proof of work consensus. Proof of Work blockchains like Bitcoin and Ethereum are currently utilizing an enormous volume of energy. According to some experts’ estimations, today for Bitcoin mining it is needed so much energy that is consumed by the entire country of Ireland (3 GigaWatts). According to other studies, each Bitcoin and Ethereum transaction respectively result in around 500kg and 35kg of carbon dioxide emissions.
It is also important to highlight that these studies do not take into account the additional energy consumption that is required for implementation and integration of Internet of Things (IOT) technologies, and significant growth of device to device smart contracts, transactions, and data transfer.
Carbon Grid Protocol is a new blockchain-based solution provided by New Era Energy that is aimed at changing this situation and decreasing the rapidly growing carbon footprint. Carbon Grid Protocol addresses the carbon footprint of the rapidly growing blockchain industry. The main idea of the project is to facilitate a way to sustainable development and greater corporate social responsibility in crypto.
Being the first project of this kind, Carbon Grid Protocol will enable blockchain networks and Decentralised App (DApp) developers to monitor their estimated carbon footprint which will help them to get closer to offsetting of their carbon footprint at a per transaction level. It is supposed that thanks to providing its platform directly to blockchain projects Carbon Grid Protocol will minimize the environmental impact of the growing energy consumption required to sustain and drive the continuing blockchain revolution. “Decarbonizing Blockchain” is the ultimate goal of the project.
Carbon Grid Protocol’s aim is to integrate with many of the most widely utilized blockchain platforms, to implement its protocol as a plugin which will allow project developers, and decentralized applications (DApp) creators to absorb or pass on these carbon footprint mitigation costs to users. According to Carbon Grid Protocol’s white paper their project itself is “a complementary infrastructure to enable blockchain networks and DApps to offset their carbon footprint by purchases of carbon credits as part of the transaction fees”.
Carbon Grid Protocol believes that there are two main problems in the current carbon credit market:
- Carbon Unfriendly Protocols: The work of blockchain networks and mining today need a lot of energy, as a result and the volume of carbon emissions is constantly growing.
- Inefficient Carbon Market: Though carbon credits were created as an economic incentive for businesses and governments to adopt sustainable practices, currently, today we see a market that is controlled by intermediaries. As a result, the demand for carbon credits and market access are too low.
There are 5 points more that only intensify the problems:
- Difficulty in certification of carbon credits
- Lack of transparency and accountability in authentication of carbon credits
- Top-down approach and malaise at an individual consumer level
- High lot sizes for buyers
- Overall lack of public awareness
Carbon Grid Protocol is trying to overcome these obstacles by means of providing blockchains and DApps with the opportunity to take a leading role in the global fight against climate change. It is working on facilitation the more accessible purchase and usage of carbon credits with a view to offset emissions in compliance with the Paris Agreement, within the United Nations Framework Convention on Climate Change (UNFCCC) signed in 2016 and to be implemented by 2020.
It is planned to introduce carbon credits on the blockchain-based marketplace thanks to creation of a simple plugin. This pioneering approach will implement a meaningful mechanism for corporate social responsibility. It will offer a significantly more versatile platform for tracking the issue and launch market trading of carbon credits with a small voluntary fee as a result this initiative will contribute to offsetting the carbon emissions of blockchain events/transactions as they happen. The environmental impact of blockchain will be neutralised at its very source.
Carbon Grid Protocol has a goal to mitigate the growth in energy volume that is consumed by the blockchain industry in an open source, decentralized, transparent and U.N. compliant manner.