"Carbon neutrality is a common issue for all of humanity, and most countries around the world have begun to implement this strategy with determination. China has also made a commitment to achieve peak carbon by 2030 and carbon neutrality by 2060.
Global institutions are trying to turn carbon into a tradable asset and use market economy to regulate carbon emissions. A common approach now is to combine energy efficiency, new energy subsidies, and carbon pricing in a combination of market-based actions such as carbon taxes and energy taxes to achieve carbon balance.
The biggest characteristic of carbon is that it is invisible and imperceptible, it is not a physical asset like gold and oil, so carbon trading is a virtual digital asset trading. So how to turn carbon into a digital asset?
Based on the background of carbon neutrality, Wanxiang Blockchain has launched the "Wan Carbon Magic" service platform, which uses the integration of blockchain, Internet of Things and other digital technologies to turn invisible and untouchable carbon into tradable assets. The platform transforms carbon into a digital asset through three steps:
First, mining carbon data based on the underlying blockchain. The blockchain is used to provide credible data units to reach consensus, so that carbon assets are recognized by everyone.
Second, a privacy data guarantee is embedded on the system to guarantee the security of data sharing, thus avoiding the digitalized carbon assets from leaking the privacy of enterprises or individuals.
Third, knowledge mapping is used to analyze the pricing leverage of carbon, so as to better guide carbon pricing and carbon flow.
The way of digitizing carbon assets now implemented in China has three steps as follows:
The first step is to help enterprises use blockchain technology to map out their current carbon emissions through the platform.
The second step is to help companies identify risks through AI forecasting.
The third step is to help companies build systems to capture opportunities in the context of carbon neutrality with digital software.
The above approach to digitizing carbon assets is based on the following logical process:
First, all the carbon emission data sources of the enterprise are digitized, and then the digital assets are generated through calculation. This process is similar to purifying the ore and minting it into gold coins, which are then digitized and deposited into a corporate account. Banks and users are very clear about the status of the account assets, but currently enterprises have no concept of carbon assets.
By combining with other energy-saving and carbon-reducing technologies, people can imagine the digitization of carbon assets as financial management, by purchasing some financial products and using the funds in the existing accounts to make profits. With the support of national financial policies, the digitized assets may be turned into financial products in the future, or even do some forward futures. The closed loop of carbon asset digitization can help companies change from passive carbon saving to active carbon asset acquisition. With the changing human environment, having such a concept and path will enable a company to have a clear development trend and path.
Since the solution is built based on blockchain technology, it can also derive a lot of add-ons, such as NFT, which transforms the original flow of numbers through NFT in a step-by-step manner, and finally can be implemented to individuals, i.e. personal behavior will also be transformed into the form of numbers. In addition, for the current problem that it is difficult to calculate green points in the new energy industry, blockchain technology can also provide a good solution. Using a blockchain digital system, the amount of green power generated can be turned into green power points or in the form of carbon coins. The basic concept of these applications is a trusted digital pedestal built on blockchain to help achieve carbon neutrality.
Not only that, the distributed concept based on blockchain opens up the whole industry, which can be superimposed and confirmed with various calculation results generated by blockchain through upstream raw materials, production and processing, packaging and logistics, thus helping enterprises to clearly understand the digital carbon emission of each link in the whole life cycle of products. For example, Wanxiang Blockchain is building a carbon inclusion platform based on blockchain, empowering enterprises to use the real carbon emission data on this platform that is non-tamperable, traceable and verifiable to develop a complete and efficient technical solution to enhance the frequency of carbon trading while accelerating the means of carbon neutral market.
More Dry Goods
Q: How did the point of dual carbon attract you?
Li Qun: I think carbon has a very big market from now to the next 50 or 60 years. And trust is the most important part of the market transaction. Blockchain can generate value while solving the trust problem. Although trust itself has no real value, but based on trust can create unlimited value.
There are many business models in China that are borrowed from the world, such as e-commerce, but carbon is an emerging market and there are no cases to learn from. Personally, I like to do something challenging, although it can be a bit overwhelming at first, but it is fun to slowly pull the strings and figure out a feasible solution based on China's national conditions. I am convinced that the carbon industry is an inevitable consequence of the development of human society, and I am into this with a pioneer mentality.
Q: What kind of asset is the future of trade carbon? The specific perception of each person is different, can you introduce it with specific scenarios?
Li Qun: We can start with a pessimistic scenario, that is, the environmental deterioration to the tipping point of the end of the world, perhaps each person's daily diet, transportation and other behaviors will have a fixed amount of carbon emission limit. If human beings really develop to this day, any human behavior is measurable, and anything beyond the quota limit will cost extra, because the environment will not allow too much carbon emission anymore. This is very pessimistic.
Back to reality there are two good things. A while ago, there was an interesting thing, an employee took a smart watch every day to shake his hand, and when his pedometer reached 20,000, he went to the company to exchange it for money. Here is the logic of "carbon savings can be exchanged for money". In the future, energy saving and carbon reduction will definitely be implemented to individuals, guiding them to do low-carbon behavior, such as quantifying personal behavior and assigning indicators. In the future, it may be possible to develop a profession that turns carbon assets into money. In addition, carbon can be turned into assets or money for circulation, traded in an open system, and even recognized globally, so that carbon can be used to trade virtual or physical products.
In the future, there may also be certified zero-carbon products, and the use of zero-carbon products can earn points, which can be exchanged for goods or circulated. Now we have seen some cases of exploration, such as Ant Forest, but Ant Forest is not monetized. With the encouragement of future policies, I believe this behavior is not far from us.
Q: There are a lot of applications for planting low-carbon trees now, what is the difference between what you are doing now and what everyone is already doing?
Li Qun: The original is more of a public good, but now we are talking about market behavior. Carbon is a balancing concept, and it is naturally difficult for a production company to be carbon balanced, so he needs to spend money to buy carbon. The amount of carbon emission of the product will determine whether the enterprise needs to pay extra cost, and through this economic behavior to pry the enterprise to do low carbon products. Recently, Europe has started to impose carbon border tariffs on China. In the future, anything exported to Europe will be superimposed with carbon tariffs, i.e. any purchase of a product includes carbon tax, which has been slowly and closely related to our life.
Q: Under the conditions of domestic regulation, what do you think is the current situation in front of blockchain, Web3, NFT and these technologies? Including the relevant national policies, in which aspects do you think there are more opportunities in the future?
Li Qun: From now on, the biggest development bottleneck in our country is the inactive carbon trading. Although there are many carbon exchanges in China, if a market is not active, it is difficult to reach the mechanism of market regulation. Based on blockchain, with NFT and other means, we can lower the threshold of participation in carbon trading and make the market more active. If a market is very inclusive, with an active market and credible technology, it will naturally drive more people to participate in the link.
The bottleneck now is that there are too few people involved in this matter. Emission control enterprises and trading enterprises have heard about this matter, but they can't participate. Blockchain+Web3 can make the carbon industry into an open ecology, so that everyone can join in, reach a human consensus, and get incentives and rewards by making contributions in the ecology. This may be a very good development direction in the future, everyone contributes, and the contribution to the world can also be rewarded, and the contribution can also flow. This topic is something that is very closely related to carbon.
Q: What practical applications have Wanxiang Blockchain done?
Li Qun: We have made a small attempt to make carbon a label based on the underlying blockchain platform. Take mineral water as an example, through blockchain traceability to endorse the water collection and generate a label; then the carbon emission of water in the packaging and processing process will generate a label, and the two labels will be combined to be the factory carbon label of the factory. After consumers buy products with carbon labels, they can scan the code to know how much carbon emission data the products use, thus combining product carbon emissions with personal carbon accounts. This case is to create a blockchain-based carbon footprint system for the whole life cycle of the product through digital technology.
There are some interesting cases in China, such as McDonald's "Carbon Neutral Breakfast", where you can buy carbon neutrality with points. In the case of Wanxiang blockchain, after helping enterprises to do some more beneficial low-carbon behaviors, consumers can receive digital NFT collections by purchasing products, thus helping enterprises to do marketing and create a carbon-neutral brand, so that customers and To C side can really feel that the carbon neutral behavior of enterprises is credible. First of all, let the suppliers, distributors and people have the concept of carbon, and then the transaction.
The mineral water carbon label we are doing now is also quite meaningful. By scanning the carbon label, we can compare the carbon emission of the products, and through this scenario, we can influence the manufacturing enterprises to do low carbon transformation, which are some scenarios we are doing now. Some customers like chemical products, industrial electronic products, water, and automobiles have already started to do these things consciously.
Q: What are the other difficulties and choke points in the application scenarios that are not only to be popularized, but also to be overcome by yourself?
Li Qun: The biggest difficulty now is that there is no unified standard worldwide, which also leads to the difficulty of mutual trust. There are many domestic low-carbon solutions, and Wanxiang Blockchain's "Wan Carbon Magic" is a comprehensive technical solution. Although they all calculate carbon, different companies provide different calculation methods, which is a big risk for both domestic and international enterprises or assessment agencies. This is something that we all have to find ways to try and overcome in the future. Only after reaching a full consensus and having a unified standard, can we measure it into a carbon that everyone recognizes, and subsequently put it into circulation with various playing methods. Turning carbon into digital is always the first step. Carbon is a virtual thing, and only by turning it into something visible, tangible and visual can we then further consider how to cut it down.
Q: What are the advantages and irreplaceability of Wanxiang's blockchain "Wan Carbon Magic"?
Li Qun: Wanxiang Blockchain has done a lot of market research. Since 2015, one of the reasons why it is difficult to promote carbon in the Chinese market is the trust issue. How much do you have to pay to solve the trust problem? Take To B enterprises as an example, the carbon emission data reported by enterprises, the management has to audit and review it once, and then ask the third party to audit and review it again. That's three times of trust, and the cost goes up.
With the involvement of interests, the possibility of falsification is too great if human intervention is not used instead of technical transformation. The distributed technology provided by Wanxiang Blockchain can enable enterprises, regulators and certification bodies to reach consensus and achieve mutual trust on the blockchain. In the future, it may even open to the To C side or the transaction side. Only when everyone has set the same rules on a baseline, the cost of trust can be reduced with blockchain technology. Everyone has a unified consensus in order to smoothly move things forward.
Previously, the Ministry of Ecology and Environmental Protection notified four enterprises of carbon data falsification, and that case in Inner Mongolia was the most interesting. It was only necessary to change the time to get 100 million carbon emission rights, and this amount is enough to touch the interest chain.
Wanxiang Blockchain wants to find some people with social responsibility to build consensus together. We have already reached strategic cooperation with domestic and international certification companies. In addition, we are also working with world-renowned energy saving companies. We have reached a consensus to solve the problem of trust, and hope that "Wanxiang Blockchain" can become a fair measurement platform.
The difference between "Wan Carbon Cube" and other products is that "Wan Carbon Cube" is more like a "chain", linking everyone together, rather than a centralized system. Through blockchain, we share information and find a benchmark of consensus and trust, which is a different starting point from other companies in the market.
The ultimate goal of mankind is to achieve carbon neutrality, but this is definitely not a unilateral action of the government. Because government action is a top-down strong regulation, while carbon neutral needs to break the original human consensus, so that everyone feels that this is necessary, everyone participates and everyone does it. Only when everyone works hard and all human beings change in every aspect is it possible to achieve carbon neutrality.
Q: How to solve the problem of closure?
Li Qun: First, help emission control companies realize that carbon can be turned into an asset and clearly know that they can earn money by saving energy. For example, we will help cement plants understand how they can benefit from carbon and respond to the country's green finance by really transforming high carbon emission enterprises. Because there are many policies that encourage and call on enterprises to save energy and reduce emissions, for the majority of emission-controlled enterprises, they can benefit from carbon by not thinking of crooked ways and following the national policy guidelines. Secondly, we prefer to do carbon footprint because carbon footprint allows enterprises to pry the consumption side in a spontaneous form, and the change of situation in the consumption side will affect the manufacturing industry, and the manufacturing industry will further affect the whole industry chain.
In our communication with foreign certification companies, we found that foreign consumers are willing to spend money to buy products with consensus carbon labels. There is a trend in China now that everyone wants to make zero-cal drinks. Because market feedback prefers zero-cal beverages, upstream manufacturers want to make zero-cal stuff, and equipment suppliers will find ways to cater to manufacturers' needs. This is spontaneous and vital, rather than having to be forced by the government. Some companies don't think proactively about low-carbon retrofits, and they don't plan carbon neutral pathways until they receive clear instructions to do so. In fact, however, it is often the spontaneous attempts of business models that may be more viable.
Q: What kind of new insights do you have to give about the industrial chain empowering double carbon, or using technology innovation to do business?
Li Qun: I personally think that the future of carbon is not necessarily to follow the path of the previous generations, but may have its own unique business model, full of unknown business logic. In the future, all kinds of entrepreneurs can explore business models that can create more business value, which gives us a lot of room for creation.
We see a "gold mine", but there is no limit to the tools we can use to dig it. People can brainstorm their own ideas, or even go forward very boldly, and there is no prophet anyway. Carbon is very inclusive and can bring together various industries to find various innovations. Everyone's perspective looks at things differently, but it's certainly relevant to you.
Q: What kind of difficulties and choke points do you have during the challenge, what kind of resources are missing, and what key links in the chain can be opened up in the resource dimension to accelerate the realization of carbon neutrality?
Li Qun: The stuck point now is that many entrepreneurs are not aware of it. We often see that foreign companies have done a great job, like Apple, which can remove the battery and plastic packaging in order to do carbon, and he dares to do very bold things. But in the country is still relatively unchanged, not doing very radical things for carbon. Some companies may be able to do their own attempts in terms of carbon footprint and communicate to consumers so that they start to have carbon related awareness.