Blockchain Mechanism for Tracking GHG Emissions through Supply Chain

Abstract

Many standards exist today for corporate Greenhouse Gas (GHG) emissions accounting, yet a mechanism for transferring emissions reductions between companies in a supply chain is not well defined. This creates a serious gap for incentivizing businesses to take climate action when there is a positive net present value but lack of a clear value proposition to customers. The effects of this gap could be seen in areas ranging from commercial buildings not implementing energy efficiency measures to oil and gas companies not reducing methane emissions. This paper presents a mechanism for transferring supply chain emissions reductions downstream from suppliers to customers and back upstream again by applying existing methodologies for emissions accounting. It discusses the technical issues of such a mechanism and how it could be implemented using blockchain technology.

Keywords: Climate change, carbon accounting, supply chain, circular economy, blockchain.

JEL Classification: Q54, Q55, Q35,