🍃 Decentralizing Carbon Accountability 🔗

A Platform for User-Centric Blockchain Footprints and Offset

MSc Sustainable Management & Technology
EPFL | IMD Business School | HEC – University of Lausanne

By Mathieu Bélanger

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This repository contains the research and implementation details of the Master of Science thesis in Sustainable Management and Technology by Mathieu Bélanger, conducted at HEC – University of Lausanne, IMD Lausanne, and École polytechnique fédérale de Lausanne. The thesis, titled "Decentralizing Carbon Accountability: A Platform for User-Centric Blockchain Footprints and Offset," aims to address the environmental impact of blockchain technology through a novel approach to carbon emissions accounting and offsetting.

Executive Summary

Blockchain technology, notably through its proof-of-work consensus mechanisms, has been criticized for high energy consumption and carbon emissions. This thesis proposes a user-level emissions accounting and offsetting platform, leveraging the transparency of blockchain data to attribute emissions based on user activity and enable carbon offsetting through the purchase of carbon credits.

Research Framework

❓ Why

1. Problem: We need to sell and make more efficient actionable solutions for the climate crisis.

   • Voluntary carbon market: Puts a price on polluting behavior (externalities) at a goods/service producer or end consumer.
   • Carbon accounting is hard: like traditional accounting, it is prone to errors and fraud.

2. Opportunity: Blockchain technology can be key in increasing transparency and bringing real relevancy to the carbon accounting process. to be worked on

   • Easier standardization and transparency of data reporting and footprinting process
   • At the blockchain-use level (emissions from using the technology)
   • But also at a more general scope (using blockchain onboarded real-world data as behavior groundtruth for accounting)

3. Issue: First Generation Blockchain Technology is extremely energy intensive and sheds a negative connotation on the ecosystem. PoS reduces by 99.9% the carbon externalities

   • We have to provide new incentives for moving the ecosystem away from PoS.
   • We may then more clearly debunk the "blockchain is energy waste" argument.

💡 What

• Putting accountability tools in the hands of end users (invest funds, daos, etc) may shine a more relatable light on the energy consumption and emissions of some networks -> Individual user-level carbon footprint.
• We will build a proof-of-concept tool enabling users to measure their blockchain-use emissions and offset them transparently directly on-chain
• This is a first step showcasing how DLTs can help the footprinting and offsetting process, starting with the simpler and accessible/automated data-use-case of user-network interaction data.

🧰 How

Two high-level components:

1. User interface:

   • Secure login for personalized data
   • Visualize usage metrics and historical emissions
   • See overall footprint
   • Guide the user in the offsetting process

2. Backend logic:

   • Emission Attribution Module
   • Automatically fetches users' data

Methodology Process:

1. Emission Attribution Module

• Review literature for existing blockchain accounting methodologies
• Iterate on the development of the attribution model by interviewing experts in the field
• Implement and compare the models on realistic user data
• Select a final model(s) to be used in the PoC tool.

  flowchart LR;
      review(Review literature) --> iterate(Iterate on Attribution Model) --> implement(Implement the Models) --> compare(Comparison of the models) --> select(Select a final model for the PoC);
      iterate --> interviews(Industry experts & academia interviews) --> iterate;
      comparison --> generate(generate realistic user data)

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2. Proof-of-concept WebApp

• Connect with third-party data providers:

  • Emissions data (CCRI HTTP API)
  • Blockchain user data (Alchemy SDK)
  • Blockchain network data (Blockchair HTTP API)

• Build reporting frontend:

  • Wallet sign-in
  • User metrics reporting (usage & footprint)

• Build offsetting frontend:

  • Integration with Klima offsetting flow
  • 1-click buy of Klima token + offset

• Host frontend and backend on cloud server

Thesis Structure

Introduction

• Overview of blockchain technology and its environmental implications.
• Personal motivations and research questions that guide the thesis.

Background and Previous Work

• Examination of blockchain sustainability, focusing on different consensus mechanisms and their environmental footprints.
• Literature review on carbon accounting methods applicable to blockchain technology.

Methodology: Emission Attribution Model

• Development of a new model for attributing blockchain emissions at the user level.
• Comparison of this model with existing approaches using synthetic user data.

Implementation: GreenBlock Platform

• Description of the GreenBlocks platform, a proof-of-concept tool developed to demonstrate the emission attribution model.
• The platform allows users to estimate their blockchain-related emissions and offset them by purchasing carbon credits.

Discussion

• Analysis of the results obtained from the GreenBlocks platform.
• Exploration of the broader implications of user-level emissions accounting for blockchain sustainability.

Conclusion

• Summary of findings and their implications for sustainable blockchain usage.
• Directions for future research in the field of blockchain sustainability and emissions offsetting.

Acknowledgements

• Me Michel Jaccard, Faculty Lecturer - Enterprise for Society Center, Academic supervisor
• Amine Belghazi, Product Analytics Manager - Ledger, External Expert