DECENTRALIZED CARBON CREDITS MANAGEMENT SYSTEM
DOI:
https://doi.org/10.34218/IJCET_16_03_002Keywords:
Blockchain, Carbon Credits, Smart Contracts, Tokenization, Transparency, Distributed Ledger, Environmental Finance, Sustainable TechnologyAbstract
Blockchain technology has garnered much attention from many stakeholders, including carbon credit trading companies, financial institutions, technology developers, start-ups, national governments, and the academic community. This technology offers the potential for transparent, secure, and tamper-proof systems that can enable innovative business solutions, particularly when combined with smart contracts. In this paper, we provide a comprehensive overview of the fundamental principles behind blockchain technology and then delve into blockchain solutions and conduct a systematic literature review and explore current business cases in the Carbon credit industry.
The adoption of blockchain technology has the potential to revolutionize the carbon credit market by introducing transparency, efficiency, and security. By recording carbon credit transactions on a blockchain, the market can benefit from preventing double-counting, ensuring credit integrity, and reducing transaction costs. Blockchain's distributed ledger capabilities enable the transparent tracking and verification of ownership and transfer of carbon credits, instilling trust in the market.
Additionally, blockchain eliminates intermediaries and excessive paperwork, making it easier for businesses, including smaller ones, to participate. Implementation methods include tokenisation of carbon credits on the blockchain, simplifying trading and facilitating transparent record-keeping. Another approach involves storing associated credit data on the blockchain, providing a tamper-proof record for verification purposes. While blockchain integration in the carbon credit market is still in its early stages, the potential advantages are substantial.
Blockchain can drive the transition to a low-carbon economy by enhancing transparency, efficiency, and security, mitigating fraud, reducing administrative burdens, and fostering a trusted marketplace for carbon credits. Continued technological advancements are expected to unlock further innovation and transformation in this critical domain.
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Copyright (c) 2025 Ms. Dhruvi Kayastha, Mr. Mukesh Parmar, Mr. Prakash Patel (Author)
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