Abstract
Most carbon Emission Trading Systems (ETS) rely on a centralized system to manage the transactional tasks, and are vulnerable to security threats. This article proposes a Blockchain-enabled Distributed ETS (BD-ETS) to improve the security and efficiency of the system. The BD-ETS transforms the centralized Carbon Emissions Permit (CEP) trading mode to a distributed trading system in which the trading mode is based on a smart contract performed in Hyperledger Fabric. In a smart contract, every transaction considers both the offer price and reputation value of the emitting enterprises. The voting power of the emitting enterprise is determined by its reputation value, which stems from their contributions to carbon emission reduction. To achieve consistency of every node in the CEP transactions, we propose a Delegated Proof of Reputation (DPoR) consensus mechanism. Compared to the enhanced Delegated Proof of Stake, the DPoR decreases the attack intention of malicious enterprises and performs better in finding malicious miners faster, thus improving the security of the BD-ETS. A case study and numerical simulations are developed to illustrate how the CEP trading functions, and to validate the DPoR mechanism.
Highlights
Global issues such as population explosion, ecological destruction, and greenhouse gas emissions, contribute significantly to global warming [1,2]
We have proposed a blockchain-enabled distributed system involving a trading model based on a smart contract and consensus mechanism for carbon emissions trading to improve trading efficiency and security of the system
We introduced the reputation value of the emitting enterprises (RoEE) which is connected with contributions to carbon abatement into the BD-emissions trading system (ETS) in two parts
Summary
Global issues such as population explosion, ecological destruction, and greenhouse gas emissions, contribute significantly to global warming [1,2]. The blockchain technology can store complete data records reliably yet allowing users to view the data records securely This data transparency can encourage the emitting enterprises to reduce their carbon emissions [17]. Blockchain technology protects data privacy, ensures a secured distributed system by using the system-of-systems engineering principles, and achieves the consistency of nodes by introducing a Proof of Work (PoW) consensus mechanism [26,27]. Our paper proposes a Blockchain-based Distributed Emission Trading System (BD-ETS) model for carbon emissions reduction. We introduce a reputation based transaction fee mechanism into the trading scheme to lift the efficiency of emissions reduction. Doing so helps these enterprises to reduce their dependence on the CEP allocated at the start of the period
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