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The Carbon Border Adjustment Mechanism (CBAM)

The Carbon Border Adjustment Mechanism (CBAM) 150 150 Climatetrade

The so-called Carbon Border Adjustment Mechanism (CBAM) is seen as a key part of the EU’s Green Deal and the Paris Climate Agreement. And the good news is that European Parliament on wednesday endorsed the creation of a carbon border charge that would shield EU companies against cheaper imports from countries with weaker climate policies

The target date for the start of the mechanism will be 2023 and it intends to ensure that imports from outside Europe will not have an unfair advantage if manufactured with a bigger carbon footprint. The CBAM is a great opportunity to boost the EU industry, employment and sovereignty. We should stop being naïve when imposing the same carbon price on non-European corporations to level the playing field of the 4.0 industrial revolution. 

Carbon prices have reached world records, a new development after years of ineffectively low prices that failed to incentivize heavy industry to go neutral and start the race to zero emissions. The non-European products would need to buy voluntary carbon credits or EU Allowances (EUAs) from the EU’s own carbon emissions scheme it seems an elegant way to ensure a fair price for all carbon offsets, depending on their attributes. 

We are happy because ClimateTrade provides the tools for CBAM by offering: transparency; traceability; trust-minimizing; identity management; privacy; immutability; decentralization; and reliable data storage & compliance in the EU, US, Latam or China wide cross-border services to account the impositive rules.

Our own customers call us their Global Climate Positive Partner and see ClimateTrade as their all-in-one solution where companies can find and match mitigation project developers and standards to incorporate additional attributes into their CBAM decentralized offsets.

We show in the platform voluntary carbon credits, EU ETS Allowance (EUAs), Renewable Energy Certificates (RECs) and coming soon very-low-sulfur fuel oil (VLSFO) or marine gas oil (MGO), Nature based Solutions (NbS), plastic credits, water credits and other types of assets as they are meant to become a reality and will be implemented and needed in the mandatory or voluntary mitigation and adaptation mechanisms.

Climatetrade embraces Climate Justice

Climatetrade embraces Climate Justice 600 384 Climatetrade

ClimateTrade is part of the B Corp Climate Collective that stands in strong solidarity with historically marginalized communities around the world, those who are currently and will be the most affected by the devastating impacts of climate change.

The rise in the level of greenhouse gas emissions intensifies the climate emergency and its consequences, especially in countries that have contributed little to climate change, but are highly vulnerable to its effects. The victims, who represent the majority of the world’s population with few resources, suffer the consequences of an irrational and highly polluting development model prevalent in industrialized countries. Climate responsibilities are common, but differentiated: all countries have contributed to the problem, but to different degrees, both the level of greenhouse gas emissions and the consequences of climate change differ from one country to another, depending on economic, technological and resilience capacities.

Our entire team recognizes that those who are least responsible for climate change are more likely to suffer its most serious consequences, including premature death. We embrace the so-called Climate Justice to place the needs, the voices and, above all, the leadership of those who will be most affected by the climate emergency. We must put people and equity at the center of climate action advocacy. Being European we speak from the safe zone, but with full respect for the sovereignty of the countries and regions where we operate.

When we fully recognized this failure in the process and history of climate development cooperation and carbon markets. We take a breath and instead to find a middle way, looking for front-line voices but using secondary sources. We have learned some important lessons in recent years, unsurprisingly, they are the same lessons shared in The Climate Justice Playbook for Business: How to center climate action in Climate Justice.

What keeps your transaction data safe?

What keeps your transaction data safe? 600 384 Climatetrade
Tecnologia_blockchain

As we have already explained in other posts, one of the basis of Blockchain technology is its transparency. And it is precisely this characteristic that makes it possible to secure the data included in Blockchain transactions with high reliability.

We must be clear that everything we include in the Blockchain will be public and visible to its participants. In this way, if we do not want public information, we must avoid including it directly in any transaction. However, the information we do include will be immutable secure for the rest of the life of the network.

Let’s imagine that we want to send a transaction that includes the number of tons of a certain project that we want to buy. In the transaction we will indicate for example 75 tons. This data is safe on the network, and it will never be able to be modified, since the data of a transaction confirmed within a block is processed through cryptographic hashes and is spread to each subsequent block.

In this way, if someone were to try to modify the data of your transaction, for instance changing the 75 tons for 500, that change would alter the entire Blockchain system and all users would be aware that the information has been modified, making the change useless.

This functionality is key in any Blockchain system and application, but it becomes a very useful tool for, ensuring the existence and integrity of a file (PoEI). We will talk about this in a future blog post.

Bill Gates’s vision to fight climate disaster

Bill Gates’s vision to fight climate disaster 600 384 Climatetrade

Last week Bill Gates, co-founder of Microsoft, gave an interview about the challenges we will face in the next decade.

In another interview in 2015, he already anticipated that humanity’s greatest threat would not be a war, but probably a highly infectious virus. 

Why was he able to make such a strong statement?

According to scientists, it is the very proximity of humans to wild animals, due to the anthropogenic invasion of their natural habitats, that brings us into contact with the danger of new contagions. Zoonosis is the process of spreading animal diseases that are eventually contracted by humans. The spread of these zoonotic viruses is becoming more and more frequent due to the disruption of ecosystems in the birth and spread of infectious diseases. 

On February 15th, Gates again dared to predict the threat posed by another pandemic like the coronavirus, but emphasised that the real goal must be to fight climate change.

“We need to change the productive economy at an unprecedented rate,” he said in his interview.

In his publication How to avoid climate disaster, he leaves us a roadmap to reach the goal of zero emissions by 2050 (Paris Agreement). All technological innovation capacity should be focused on the climate crisis, a challenge that Gates puts on the table to governments that listen to him but do not take real action, without a global plan. 

Commitment, however, does not come only from the political body. Change must also be driven by businesses. Obviously the world does not change overnight, and people want to keep their jobs, adapt their skills, keep travelling, etc. If measures were implemented immediately and many limitations were put on CO2 emissions, even eating would be a problem for the reasons mentioned above. That is why research, development and support for all those companies that are born with a plan for cross-cutting sustainability in all their activities is so important. 

Nature based Solutions for people and planet

Nature based Solutions for people and planet 600 384 Climatetrade

The recent UNEP Adaptation Gap Report concludes that, although three-quarters of countries have some adaptation plans, financing and implementation of adaptation actions are well below what is required to avoid costs, damages and losses related to the climate and health emergency.

At ClimateTrade, because our positive impact plan is based on the UN Millennium Assessment, it was aware of the risk we had this decade of suffering a pandemic due to zoonoses such as COVID-19. Since our birth, we have been adding mitigation projects and carbon credits based on the conservation of ecosystems.

We rely on nature and the power of healthy ecosystems to protect people, optimise infrastructure and safeguard a stable and biodiverse future.

IUCN

We are pleased that the UNEP report places particular emphasis on NbS nature-based solutions, which concludes that they should receive significantly more funding and attention, given the low-cost benefits they bring to climate change adaptation, society and biodiversity.

McKinsey estimates a practical potential of about 7Gt of CO2 per year from NbS projects, enough to meet about a third of that goal and achieve short-term carbon removal at a lower cost than technology solutions. Most of this total comprises four types of NbS: avoided deforestation, peatland impact, peatland restoration, reforestation, and cover crops.

At ClimateTrade we promote more than 15 NbS projects of this type, including others that we consider very relevant for health in cities, such as BioUrban, which due to its bioalgae reactor, we must also consider it a NbS.

In addition, our decentralized platform solves the barriers that prevent reaching the potential of NbS, its potential for scale due to various conceptual and technical obstacles such as the lack of consensus on how to treat the ownership of sequestered carbon, provide clarity on the rules and the certification under an international body of commonly accepted standards, overcoming the lack of confidence after years of excess supply of carbon credits but at very low prices that did not help communities to survive.

ClimateTrade can deliver a clear demand signal to build trust and unite the corporate, public and social worlds. We have the architecture, the infrastructure and we can meet the demand for financing from our corporate clients, to support the growth of NbS that produce carbon credits, as established in the recent report of the Working Group on the expansion of the Voluntary Carbon Markets (TSVCM), of which we are members for different working groups.

How does blockchain actually work?

How does blockchain actually work? 600 384 Climatetrade

In this and the following blog posts we will learn about blockchain technology. The purpose of these is to give the lector an overview of what blockchain technology is, the advantages it presents, as well as its disadvantages.

It is easy for newcomers to mix up cryptocurrencies and blockchain. Although the first blockchain (Bitcoin) is a cryptocurrency, it does not necessarily mean all blockchains are (or will be) necessarily used as payment networks. Blockchain technology has unique properties without which we would not be able to guarantee such a high level of transparency, decentralization and immutability.

If you do not understand yet some of the concepts do not worry, we will explain them to you step by step. The following concepts, constitute the foundation of blockchain technology and we will go over them without getting too technical on the implementation details:

  • Distributed ledgers
  • Consensus mechanisms
  • Mining
  • Public and private blockchains
  • Blockchain platforms

Distributed ledgers

What is a ledger?

Today, vast amounts of information are controlled and managed by institutions that we trust to act honestly. Blockchain technology enables a shift from today’s centralized repositories of information to more decentralized robust fault tolerant networks. Using blockchain technology, it is possible to imagine a future where we do not rely on centralized organizations to manage our data but we, the users, have greater control of our digital lives. So how do blockchains enable this? It starts with simple accounting.

Ledgers are data sources that track accounts and balances of assets, they are fundamental to accounting and tracking value. Today most ledgers are maintained in databases run by central authorities such as banks, credit card companies or governments. Record-keeping by central authority is beneficial for several reasons:

  • A central authority can maintain data integrity by restricting access to the ledger to authorised users.
  • The data location is known and accessible to the data curators this allows for fast retrieval and regulating access to the data.

Updates to a database are known as “transactions”. The following are key properties for a database transaction  :

  • Transactions need to be atomic (where all updates are applied to the ledger or none of them are).
  • Transactions need to be durable, meaning they persist in the system and there is no chance of the change being reverted.
  • Transactions need to be consistent. Ledger data must be modified in a reliable permitted way.
  • They also need to be isolated. Transactions must be isolated one from another.

Recently, distributed ledger technology has gained popularity. Distributed ledgers do not rely on a central authority to maintain data. Maintaining agreements among the shareholders of the ledger is a difficult problem. Data integrity can be maintained using public/private key cryptography which can verify who initiates transactions and that they are authorized to do so.

Transactions in a distributed ledger must have the same properties as a centralized ledger, they must be atomic, durable and consistent. Accessing the latest data often takes longer in a distributed ledger system than a centralized one, because it takes time for the participants to agree on the ledger’s state. Therefore the latest transactions are not immediately available to every node (participant in the network).

A ledger is distributed when it has been securely replicated across geographic locations. Some features of DLT include:

  • Consensus formation
  • Peer-to-peer protocols
  • Cryptographic infrastructure

Blockchain technology is a version of distributed ledger technology. It implements these features through a specific  data structure called a “blockchain” and consensus mechanisms such as proof of work, proof of stake, delegated proof of stake, proof of authority, etc.

In the next blog post we will discuss in more detail about consensus mechanisms, so stay tuned.

About the author:

David Pinilla is an Economist, former professor of a Full Stack Developer Bootcamp, and a blockchain enthusiast. He currently works as a Senior Full Stack Developer at Climatetrade.

Tecnologia_blockchain

Myths about blockchain

Myths about blockchain 600 384 Climatetrade

ClimateTrade is a Blockchain-based carbon credit marketplace. Probably, to a greater or lesser extent, you have heard of this technology and it is likely that you have believed any of the myths spread about it. Today we are going to refute 3 of the most common.

Myth #1 Blockchain = Cryptocurrencies

The first myth is that Blockchain = Cryptocurrencies. This statement is incorrect since Blockchain has many more applications apart from cryptocurrencies, such as tokenization or the registration of documentary evidence. Besides, there are some cryptocurrencies that use DLT technologies other than Blockchain. At ClimateTrade we tokenize and register each carbon credit of the projects published on the platform, and we record all the modifications that occur on them.

Myth #2 Blockchain for everything

The second myth is that Blockchain can be applied to absolutely everything. This is something that is often read in the media and among many communities. However, to take full advantage of Blockchain technology and to provide a differential value with respect to traditional database technologies, transparency and immutability needs are key points to take into account, as not all applications have those needs. At ClimateTrade we use Blockchain to guarantee the traceability and transparency of all operations on our platform.

Myth #3 fast and anonymous

The third myth is that Blockchain is fast and anonymous. The speed of a Blockchain network depends on the implementation. The capacity of newer networks like Algorand is notably superior to older networks like Bitcoin or Ethereum. On the other hand, all the operations carried out in the majority of Blockchains are traceable and identifiable to the different “wallets” that although initially are totally anonymous, as operations are carried out, a profile can be formed regarding that account, therefore, to achieve anonymity it is essential to be very careful with how you use the tools.

At ClimateTrade we are experts in Blockchain technology and we have a human team capable of working with the latest technologies. If you have any questions or curiosity, read our posts or contact us directly!

Why does ClimateTrade use blockchain technology to offset carbon emissions?

Why does ClimateTrade use blockchain technology to offset carbon emissions? 600 384 Climatetrade

In the Kyoto protocol (1997) signing countries agreed to limit the emissions of six greenhouse gases, here is where carbon credits were born. This meant that polluting companies,  instead of paying taxes to the governments, could pay directly to the companies which generate those credits.

Likewise any traditional market, brokers started to speculate and get most of the profit, preventing money from reaching the green projects and hence hindering their development. This not only left unprotected carbon credit sellers but also buyers who could be sold the same credit several times (due to the lack of transparency and traceability of the carbon credits cancellation mechanism).

The problem as it usually happens was that the market was centralized in the hands of traditional brokers, who used to manage their own databases which can be manipulated at their own discretion, being able to write, change, delete and restrict access or other actions. The process also becomes more expensive, lengthy and tedious, discouraging many companies from buying / selling carbon credits.

ClimateTrade brings this situation to an end, allowing companies and project developers to benefit from blockchain technology

Blockchains are distributed ledgers which replicate the data across the different nodes involved in the network. That is, instead of being centralized on a single server, the information is decentralized on different computers, each saving its own copy. This prevents any record from being changed or deleted, since it only allows adding new data, thus preventing data from being altered or manipulated.

The information on a public blockchain is accessible to everyone and visible on any block explorer, facilitating the traceability and transparency of canceled carbon credits. Neither ClimateTrade, nor the creators of the blockchain itself could alter the information since all nodes have replicas of the data and are required to follow the consensus algorithm, which ensures the immutability of the data stored in them.

The consensus algorithm used in the blockchains we work with is Proof of Stake. The first blockchains are Proof of Work (Bitcoin and Ethereum 1.0) which involves spending huge amounts of energy to produce new blocks and concentrate the power in the hands of a few miner pools.

On the contrary, the Proof of Stake allows to process a greater number of transactions per second, decentralizing the rewards per block to anyone who operates the blockchain token together with a laptop or mobile connected to validate the blocks, thus saving on fees and reducing the environmental impact in  more than 99%. To go further in the process of automation, ClimateTrade created a REST API available to company developers who wish to integrate this innovative system. This allows the incorporation of already existing projects called from this API into its code, thus offsetting the carbon footprint generated in their business processes.

Sustainability in the United States… Now what?

Sustainability in the United States… Now what? 700 500 Climatetrade

Let us recall that the Paris Agreement was agreed on 12 December 2015, at the Paris Climate Conference (COP21), between countries committed to tackle climate change while accelerating and intensifying the actions and investments needed for a sustainable low-carbon future

In this sense, the United States has a crucial role to play in meeting the agreed targets, being the second largest emitter of greenhouse gases in the world.

During the presidential campaign, President-elect Joe Biden promised to return to the agreement as soon as possible after his announcement as the 46th President of the United States, which will take place on January 20, 2021. In addition, his political agenda involves an ambitious work plan to address climate change and its effects, such as a series of standards and incentives to decarbonise the electricity and transport sectors, among other highly polluting sectors.

It is important to note that US companies have reaffirmed their commitment and many have already taken action to reduce their emissions. Additionally, states and cities are taking action, for example, New York, California and Washington announced the formation of a Climate Alliance, a coalition that will bring together those states that are committed to defending the terms of the Paris Agreement. 

Eleven states, representing more than a quarter of the nation’s population, have carbon pricing programs in place and are successfully reducing emissions. These states are California and the ten northeastern states, Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Rhode Island, and Vermont, which make up the Regional Greenhouse Gas Initiative (RGGI)

RGGI is the first mandatory cap-and-trade program in the United States to limit carbon dioxide emissions from the power sector. And, The California program was the first multisectoral cap-and-trade program in North America.

Climatetrade is the perfect ally for those companies committed to climate action, we have wide experience and a team of experts to work hand in hand to help them offset their environmental impact.

Carbon neutral products and services

Carbon neutral products and services 940 788 Climatetrade

Consumers are increasingly  demanding that companies take action on their environmental impact which is becoming a trend over their purchasing decisions.

What do we offer to our customers?

Climatetrade helps companies to fulfil its most ambitious carbon offsetting commitments, empowering their sustainability strategy with our innovative digital solutions.

Our experience in the market has allowed us to analyse the current needs and detect a lack in the supply of carbon neutral products and services. In the coming years all products will be measured in CO2, and the consumer will know exactly how much they pollute before buying them. 

Did you know that this was possible? For this purpose, we have developed ClimatetradeGo, the first API REST that can be easily and securely integrated into the companies’ systems for them to be able to offer their own customers the possibility of acquiring these carbon neutral products and services during the purchase process. 

ClimatetradeGo provides customers with information about the carbon footprint of their purchases and offers the opportunity to invest in sustainable projects while offsetting it.

We have already  integrated our solution into the systems of large corporations worldwide.

Iberia, offset the carbon footprint of your flight

co2-offsetting-business

The airline offers its customers to offset the carbon footprint of their flight on a voluntary basis and thus, support sustainable development projects, with the integration of ClimatetradeGo during the purchase process in a simple click.

The passenger gets the exact carbon footprint of his trip and the economic amount needed to offset it. 

Tu.com from Telefonica, buy carbon neutral devices

Telefónica recently launched Tu.com, the first online platform for the sale of carbon-neutral devices

Reaffirming its commitment to achieving zero emissions by 2050, the company is selling previously offset devices, taking into account the environmental impact generated by their manufacture.

Instituto Tecnológico de la Construcción de Cataluña (ITEC), associated companies can offset the carbon footprint of their works.

ITec allows its associates to offset their carbon footprint in all types of works, all construction processes involved, such as materials, machinery, transport, etc. and during any phase of the life cycle (manufacturing, construction, use and deconstruction).

Make ClimatetradeGo your competitive advantage and offer carbon neutral products/services, integrate our technology into your e-commerce platform or payment process (checkout). Let each shopping cart of your customers contribute to reduce the environmental impact generated. Contact us! We will advise you on how to enhance your sustainability strategy.