Blockchain’s Scope and Purpose in Carbon Markets: A Systematic Literature Review

Abstract

Carbon markets, particularly emission trading schemes (ETS) and carbon offset projects, are significant mechanisms in climate change mitigation. However, there are still a number of unresolved issues regarding their attractiveness and efficient functioning. Blockchain, as the core of “3D’s concept” (including decentralization, decarbonization and digitalization), could be considered as a candidate solution for carbon markets’ improvement. A systematic literature review was conducted to identify the role of blockchain in ETS and carbon offset projects, its key features, implementation challenges and proposed applications, by analyzing and discussing the content of relevant studies, and grouping the results into domains. This study’s findings show that blockchain has great potential to be adopted in carbon markets. However, there is no data on blockchain use cases in energy efficiency, chemical processes and industrial manufacturing, waste disposal, and agriculture. Blockchain-based household and transportation carbon offset projects are linked to renewables through energy trading. Renewables and forestry are the most appropriate domains for blockchain adoption, considering various criteria of quality for carbon offset projects. Blockchain is currently immature in carbon markets because of its own drawbacks and challenges. This study also highlights research gaps and offers research directions to inspire researchers for conducting related investigations.

Blockchain technology in the renewable energy sector: A co-word analysis of academic discourse

“…The 'Carbon Credit' theme highlights the application of blockchain in environmental sustainability, particularly in tracking and trading carbon emissions. In this regard, several studies reflect the evolving nature of this theme, where blockchain is seen as a potential game-changer in enhancing the transparency and efficiency of carbon credit systems [ 36 , 98 ]. 'Solar Energy', with 5 mentions, underscores the integration of blockchain in optimizing solar energy production and distribution.…”

“…10 a), the diagram reflects themes such as 'Computer Architecture', 'Blockchain', 'Electric Vehicles', 'Internet of Energy', 'Sustainability', 'Microgrid', and 'Privacy-Preserving'. These themes indicate an early focus on integrating blockchain with fundamental aspects of energy systems and sustainability [ 98 , 190 , 191 ]. Moving to the 2020–2021 period ( Fig.…”

“…These certificates verify that certain amounts of electricity are generated from renewable energy sources. Additionally, blockchain streamlines carbon credit trading by offering a transparent and tamper-proof system [ 98 ].…”

Influence of blockchain and artificial intelligence on audit quality: Evidence from Turkey

“…Despite the potential benefits, previous literature also highlights some challenges and limitations of blockchain in audit quality [ 33 ]. These include scalability concerns, regulatory and legal uncertainties, privacy issues, technical complexities, and the need for standardized protocols and frameworks.…”

Smart Endoscopy Is Greener Endoscopy: Leveraging Artificial Intelligence and Blockchain Technologies to Drive Sustainability in Digestive Health Care

“…In this regard, blockchain can also drive the creation and trading of carbon credits within the healthcare industry. By tokenizing carbon credits on a blockchain platform, healthcare providers can track and exchange credits based on their efforts to reduce their carbon footprint [87]. This would incentivize environmentally friendly practices and encourage carbon neutrality in digestive health care.…”