Carbon Neutral Asset Trading System

Carbon Neutral Asset Trading System

Carbon Neutral Token (NO)A digital asset representing a carbon offset action that can be used to offset carbon footprint. Non-Fungible Digital Twin (NFDT)A blockchain-based digital asset representation used to record the carbon footprint changes of an asset or carbon offset action over time. Carbon Footprint Attribute Value (ENV)A carbon emission indicator associated with an asset that quantifies the carbon emissions or carbon offsets of an asset from the date of its existence relative to an industry standard baseline. Smart ContractProgram code stored on the blockchain that automatically executes when preset conditions are met. BlockchainA distributed ledger technology used to record transaction data with the characteristics of decentralization, immutability and traceability. Digital Asset ExchangeAn online platform that allows users to trade digital assets. Voluntary Emission Reduction (VER)Verified emission reductions that represent emission reduction actions that exceed compliance requirements. Nationally Determined Contributions (NDC)Autonomous emission reduction targets submitted by countries under the Paris Agreement. Asset-Backed Token (ABT)A digital token that represents the financial and/or operational aspects of an asset. Third-Party Verification AgencyAn independent agency responsible for verifying the authenticity of carbon emission data and carbon offset actions. Custody is the custody of assets by a third party to ensure their security and integrity. Environmental, social and governance (ESG) are three key factors that measure the sustainability performance of a company.

Short answer questions

What role does the carbon neutrality token (NO) play in the carbon trading system?

Answer: The carbon neutrality token (NO) represents a tradable carbon offset action. Asset holders with a negative carbon footprint attribute value (ENV) can purchase NO to offset their carbon emissions and achieve carbon neutrality goals.

How is the non-fungible digital twin (NFDT) used to represent the carbon footprint of an asset?

Answer: The NFDT is composed of a series of linked smart contracts, each of which records the change in carbon emissions or carbon offsets since the previous contract. Together, these contracts form a digital representation of the carbon footprint of an asset over time and bind the carbon footprint attribute value (ENV) to the asset.

Explain the process of converting carbon emission reduction certificates into carbon neutrality tokens (NO).

Answer: First, the owner of the carbon reduction project needs to freeze its carbon emission reduction certificate at the National Carbon Registry and obtain a redemption certificate. The exchange then verifies the redemption certificate and generates the corresponding amount of NO by executing a smart contract.

Why is it important to use blockchain technology in a carbon trading system?

Answer: Blockchain technology ensures transparency, security, and immutability of carbon trading data. It prevents fraud and provides a verifiable audit trail for all parties involved.

What is the difference between an asset-backed token (ABT) and a carbon-neutral token (NO)?

Answer: ABT represents the financial and/or operational aspects of an asset, while NO specifically represents carbon offset actions. ABT can have a negative ENV value, while NO always has a positive ENV value.

Describe how digital asset exchanges track traders' carbon footprint attribute values ​​(ENV).

Answer: Exchanges use a ledger to store the carbon footprint attribute value (ENV) of each listed asset. When a trader buys or sells an asset or NO, the exchange updates the ENV value of its portfolio accordingly.

Explain the role of third-party verifiers in a carbon trading system.

Answer: Third-party verifiers are responsible for verifying the accuracy and reliability of carbon emission data and carbon offset actions. They ensure that the information used in the trading system is transparent and credible.

How does the carbon neutral asset trading system promote companies to achieve environmental, social and governance (ESG) goals?

A: The system helps companies quantify, monitor and reduce their environmental impact by providing carbon footprint transparency and carbon offset mechanisms. This enables companies to better meet the growing expectations of investors and stakeholders for ESG disclosure and performance.

Briefly describe the importance of secure data collection systems in carbon trading systems.

A: Secure data collection systems are essential to ensure the integrity and reliability of carbon emission data. It uses various security measures to prevent data tampering and unauthorized access, thereby maintaining the credibility of the trading system.

How is the pricing of carbon neutral tokens (NO) related to the cost of emission reduction?

A: The price of NO is affected by the marginal cost of emission reduction. When the cost of emission reduction is higher, the price of NO tends to be higher because more resources are required to achieve carbon offsets. Conversely, when the cost of emission reduction is lower, the price of NO tends to be lower.