Is blockchain the "antidote to smog"? IBM will launch the world's first blockchain "carbon asset management platform" for China this year

IBM has announced that it will build the world's first blockchain "green asset management platform" to address China's waste gas emissions while supporting low-carbon emission enabling technologies.

Based on open source Hyperledger Fabric technology, the blockchain carbon management application was developed specifically for businesses. The solution is the result of a collaboration between IBM and China’s Energy Blockchain Energy Blockchain Labs . The two companies completed a proof-of-concept run of the platform late last year. The development comes as China is pushing forward with its climate change action targets to be achieved by 2020. As part of the Paris Agreement signed by the Chinese government, China will establish a standard national carbon market.

According to IBM, the blockchain solution will serve as a carbon credit management ledger, enabling the development of carbon assets (also known as certified emission reductions, or CERs) or the issuance of emission reduction allowances, a very popular method of incentivizing companies and large enterprises to reduce their carbon footprint.

The tech giant is looking at blockchain technology as a viable solution to reduce corporate carbon emissions. Digital collaboration enabled by smart contracts through a common ledger will drive more efficient carbon asset development and management. IBM claims that blockchain’s core feature as an immutable ledger will bring credibility to the carbon reduction market, which is also very important. Enhanced transparency and simplified auditability also give carbon markets more reasons to choose to use blockchain technology, while regulators can also accept it.

Cao Yin, chief strategy officer at Energy Blockchain Lab, was quick to point out the significance of such a solution for China, the world’s largest carbon emitter.

He said:

“It is estimated that the platform will significantly shorten the carbon asset development cycle while reducing carbon asset development costs by 20% to 30%, enabling a large number of carbon assets to be developed cost-effectively.

IBM's carbon management platform is the company's latest blockchain achievement in China. In October 2016, IBM and Walmart China reached a strategic cooperation to jointly use blockchain to track food. Earlier this year, IBM also cooperated with China Postal Savings Bank to deploy blockchain for asset custody.

IBM’s blockchain carbon management platform will enter beta testing in May this year and launch a commercial product by the end of this year .