Shaping tomorrow’s carbon market with embedded digital-MRV
Value chain transformation, not just digitization
Digitization efforts in the carbon market mostly consist of adding a digital layer to an underlying carbon process, which tends to perpetuate the underlying challenges. Focus is on marketplaces, and exchanges, as well as on CRM systems that streamline the selling processes of intermediaries. Not properly addressed, however, are challenges at the source: The high costs of project development is prohibitive for many impactful projects, and the long cycles resulting from a lack of digital verification solutions severely constrain the flow of carbon finance to the most needy. For us, D-MRV is not about simply digitally supporting the lengthy and expensive process that is currently in place, it is actually about challenging this very process, re-designing it all along the value chain, with digital data at the core.
Digital-MRV done right
At CarbonClear, we are building the foundations for an updated carbon market that fully leverages technology, and that is modular and interoperable with other systems through a suite of APIs. Our D-MRV solutions operate in the following areas:
1) Digitizing carbon methodologies: Current carbon methodologies are generally built on localized baselines, sample-based monitoring and verification, and yearly issuance cycles. We curate the best suited methodologies for digitization, and translate them into digital carbon protocols. These protocols can be seen as an operationalization of the methodologies, which allows them to be applied effectively within a fully digital infrastructure.
2) Digitizing carbon credit issuance: We apply our digital carbon protocols in a secure and robust digital infrastructure that we have designed. Here the protocols are subjected to data input from payment systems, data aggregators, smart meters and other IoT devices, resulting in automated and data-driven issuance of carbon credits in daily intervals. Verification against the protocols is automatic and instantaneous, and certification of these credits against the underlying methodologies is recorded in an immutable open database – our carbon registry – which is powered by a distributed ledger system.
3) Digitizing carbon credit sales and retirement: While the two first steps are the most important in unlocking the supply challenge of the carbon market, we have also developed solutions that allow for the integration of our registry into demand-facing applications, for example consumer apps, fintech solutions, and carbon tokens.