Exploring the Potential of Emerging Technologies for Connecting Climate Markets
Climate Action Data Trust
Climate Action Data Trust (CAD Trust) is a decentralised metadata platform that links, aggregates and harmonises all major carbon registry data to enhance transparent accounting in line with Article 6 of the Paris Agreement. The CAD Trust uses blockchain technology to create a decentralised record of carbon market activity with the aim to avoid double counting, increase trust in carbon credit data and build confidence in carbon markets.
Purpose
Purpose
Climate Action Data Trust (link) is a decentralised metadata platform that links, aggregates and harmonises all major carbon registry data to enhance transparent accounting in line with Article 6 of the Paris Agreement.
The CAD Trust operational system is leveraging the Chia Network’s Data Layer built on a public and permissionless blockchain technology. By connecting registries through a decentralized infrastructure, and making CAD Trust information publicly available, it is possible to identify risks of double counting that can damage the integrity of the markets. The data layer can be used to support data sharing, and it provides a backbone infrastructure that can support services built by the public and private sectors to support market activity, such as compliance reporting, transacting, and benchmarking services.
The Singapore-based initiative was founded by the World Bank, The International Emissions Trading Association (IETA) and the Government of Singapore. CAD Trust is an integral part of the World Bank’s Climate Warehouse End-to-End Digital Ecosystem.
To learn more about the CAD Trust, please check the official page: https://climateactiondata.org/
Implementation
Implementation
Simulations phase
Since 2019, the World Bank has prototyped CAD Trust and has run three simulations to test the platform with partnering governments and organizations. The simulations have provided for jointly learning about relevant technology and integrating registry systems while co-creating the design, functions, and shared data model for CAD Trust. The past two simulations ran from August 2019 to December 2021, and the third and final simulation was completed at the end of August 2022.
Operational phase
Official and Media Launch:
- CAD Trust's media launch took place on October 26, 2022.
- Official launch was announced on December 7, 2022, at Asia's Climate Summit in Singapore.
Operational Data Dashboard Launch:
The initial integration and connection with several major registries are in process. Throughout 2023, other national registries and the wider ecosystem of registries will connect to CAD Trust. The fully operational Data Dashboard displaying all major registry data will be fully accessible in Q4 2023.
Legal Structure:
Management has been transferred to an independent legal entity created in Singapore. It is led by the Board and the Council that consists of government representatives, and major carbon registries, including those of Bhutan, Chile, Japan, Senegal, Singapore, and the United Kingdom, as well as Verra, Gold Standard, American Carbon Registry and Global Carbon Council. The CAD Trust governing structure also includes the Secretariat, as well as advisory bodies such as the Technical Committee and the User Forum that will be working towards enhancing and operationalizing the CAD Trust.
Usage
Usage
Participants in the Simulation used scenario scripts to test out the prototype, mimicking registry functions while viewing the information displayed through the user interface on all connected registries. Simulation testing enabled participants to try out processes and the data needed to support Article 6.2 of the Paris Agreement, such as the international transfer of mitigation outcomes. This not only informs the specifications needed to build out the Climate Action Data Trust, but the minimum requirements that are needed for country registry systems.
Once Operational, the CAD Trust can be used to ease integration between disparate registry systems. Data on projects and units can be easily transferred between systems, and the consolidated information in the Warehouse will provide the basis for compliance reporting and auditing of information. Registries integrating with the CAD Trust are responsible for their projects and the quality of data that they share with the CAD Trust. Through transparently providing information on the lifecycle of projects, their issued units, and the movement of units as they are transferred between registry systems, registries provide assurances through the CAD Trust that units are not being double counted or spent.
Simulations
Simulations
Phase III:
The World Bank finalized the third phase of the testing and simulation activities in August 2022. The objective of this phase was to test the Climate Action Data (CAD) Trust on an open-source, interoperable and permissionless public blockchain platform, and develop a prototype to operationalize the Climate Action Data (CAD) Trust consistent with the recommendations from the 6-month consultation on the governance and financing model of the Climate Action Data (CAD) Trust that was completed in February 2022. The consultation was co-convened by the International Emissions Trading Association, the Government of Singapore and the World Bank.
Check the Climate Warehouse Simulation III – Final Report here.
Governments | Independent Standards | Multilateral Organizations | Other market participants |
Switzerland Sweden Spain Japan Singapore Chile Peru Senegal Uganda Rwanda UK | Verra Gold Standard ACR CAR GCC Other registries: HIS Market, Eco- registry Colombia | EBRD UNDP UNFCCC WB CATS WB CMI IFC
| Climate Change Coalition Climate Check GenZero SK Group IETA Open Earth Foundation
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Check the Observer Node here: https://www.theclimatewarehouse.org/tools/simulation-3
Phase II:
The World Bank has completed the second phase of the testing and simulation activities. This phased focused on testing the utility of the Climate Action Data (CAD) trust functions to track information and identify double counting risks. The testing and simulation also improved understanding of the feasibility of peer-to-peer integration across decentralized registry systems and identified potential minimum data and technical requirements for registry systems.
The second simulation running from November 2019 to December 2021 involved the following active partners:
The governments of:
Japan, Chile, Singapore, Peru, Costa Rica, Switzerland
The following International Standards:
The Gold Standard, Verra, American Carbon Reserve, Climate Action Reserve, and Global Carbon Council
The following sub-national actors:
Kenya Electricity Generating Company (KenGen), Energy Efficiency Services Limited (EESL)
Regional registries:
EcoRegistry, BV Rio
Phase I:
From August 2019 to November 2019, the World Bank completed the first phase of the testing and simulation activities. The Climate Action Data (CAD) trust decentralized meta-registry system showed potential to provide an inclusive platform to connect the different country and institutional registry systems and support much-needed visibility to climate activities, and enhance overall market activity transparency.
The first simulation involved the following active partners:
The governments of:
Japan, Chile
Invitation to Collaborate
Invitation to Collaborate
The Climate Warehouse team continues to support the effort to provide open-source infrastructure for climate market activities.
The World Bank has finalized the third and final phase of the testing and simulation with the Chia blockchain platform to run the CAD Trust on an interoperable, public, and permissionless blockchain. The collaboration with Chia Network is based on the principles of non-exclusiveness and open-sourced public goods, bears no costs or intellectual property rights from the World Bank, and aims to promote interoperability. The World Bank conducted a technical assessment with a consortium of experts to discuss and review the Chia White Paper to determine whether and how Chia blockchain meets the requirements of the CAD Trust. Please find here the latest version of the Chia White Paper, which incorporates the feedback received during the technical review. In previous simulation phases, the CAD Trust was tested on private Ethereum, Hyperledger, and blockchain as a service with Kaleido.
The World Bank recognizes the rapid technological innovation in this space and the emergence of new platforms and will continue to assess the opportunities of using emerging technologies and platforms to support transparency, reduce transaction costs and maintain the integrity of climate markets. The opportunities include support for developing an end-to-end ecosystem that encompasses digital MRV at the project/program level and relevant protocols; real-time data flow through dMRV to the national MRV and registry systems and finally connectivity with the CAD Trust or another infrastructure element.
Any interested stakeholders with well-developed white paper(s) and implementation models that support above mentioned objectives and are open to collaborate through a non-exclusive, no-fee arrangement, using an open-source platform with low environmental impact that promotes functionality, interoperability, sustainability, and inclusiveness of carbon registries and climate markets are invited to reach out at climatewarehouse@worldbank.org.
Climate Warehouse Simulation 1
Simulation I - Connecting Climate Market Systems
The Paris Agreement introduced a bottom-up approach for addressing climate change by enabling countries to pledge individual commitments through nationally determined contributions (NDCs). Furthermore, Article 6 of the Paris Agreement recognizes that Parties may engage in bilateral cooperative approaches, including through the use of internationally transferred mitigation outcomes (ITMOs), to achieve their NDCs. In the first phase, the project identified potential prerequisites and requirements of Article 6.2 and conducted a pilot simulation of a prototype to test blockchain's utility as the underpinning platform technology to connect heterogeneous registries to track units and avoid double counting issues across those registries.
Webinar: Emerging Digital Technologies for Post-2020 Climate Markets
Climate Warehouse Simulation 2
Simulation II – Connecting Climate Market Systems
The second phase of the Climate Action Data (CAD) Trust prototype development, which built on lessons learned from the simulation phase I, focused on testing the meta-data layer infrastructure with updated data fields. One of new features of the second phase prototype is the provision of an auxiliary application which mimics the minimum functions of a registry and thereby enables participation by country participants that currently do not have a registry. The second simulation involved broader participation, establishing 16 registry nodes and over 20 observer nodes.
Climate Warehouse Simulation 3
Simulation III – Connecting Climate Market Systems
The third phase of the Climate Action Data trust prototype development, which builds on the lessons learned and findings from Simulation II, aimed to test CAD trust on an open source, interoperable and permissionless public blockchain platform, and develop a minimum viable product to operationalize the CAD trust consistent with the recommendations from the 6-month consultation on the governance and financing model of the CAD trust that was completed in February 2022. The consultation was co-convened by the International Emissions Trading Association, the Government of Singapore and the World Bank.
