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A European Emissions Trading System Powered by Distributed Ledger Technology: An Evaluation Framework

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Department of Finance, ESCP Business School, 14059 Berlin, Germany
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Department of Information and Operations Management, ESCP Business School, 14059 Berlin, Germany
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Wolveshill Consulting Ltd., Orpington BR5 3QB, UK
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Author to whom correspondence should be addressed.
Academic Editors: Mu-Yen Chen, Pedro Peris-Lopez and Hsin-Te Wu
Sustainability 2021, 13(4), 2106; https://doi.org/10.3390/su13042106
Received: 14 January 2021 / Revised: 8 February 2021 / Accepted: 10 February 2021 / Published: 16 February 2021
(This article belongs to the Special Issue Blockchain for Business Process Reengineering and Sustainability)
The European Union Emissions Trading System (EU ETS) is a major pillar of the European energy policy to reduce greenhouse gas emissions. However, the reportedly pervasive frauds in this market are constraining the beneficial role of the EU ETS. In this conceptual paper, we propose to digitalize the EU ETS by distributed ledger technology (DLT), enabling the verification of authenticity and provenance, proof of ownership, and lifecycle traceability of carbon certificates and assets. Our platform allows verifiable credentials to validate emission allowances, real-time tracking of trading participants’ emissions, and the audit trail reporting of the decentralized trading records. Furthermore, we complement the DLT application concept with a structured interdisciplinary evaluation framework. Our framework and analysis aim to stimulate further interdisciplinary research in this area to support regulators, such as the European Commission, in designing effective digital emissions trading systems. View Full-Text
Keywords: European Trading System; distributed ledger technology; digitalization; blockchain; trading platform; decentralized identifiers; verifiable credentials; wallet-to-wallet European Trading System; distributed ledger technology; digitalization; blockchain; trading platform; decentralized identifiers; verifiable credentials; wallet-to-wallet
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MDPI and ACS Style

Mandaroux, R.; Dong, C.; Li, G. A European Emissions Trading System Powered by Distributed Ledger Technology: An Evaluation Framework. Sustainability 2021, 13, 2106. https://doi.org/10.3390/su13042106

AMA Style

Mandaroux R, Dong C, Li G. A European Emissions Trading System Powered by Distributed Ledger Technology: An Evaluation Framework. Sustainability. 2021; 13(4):2106. https://doi.org/10.3390/su13042106

Chicago/Turabian Style

Mandaroux, Rahel, Chuanwen Dong, and Guodong Li. 2021. "A European Emissions Trading System Powered by Distributed Ledger Technology: An Evaluation Framework" Sustainability 13, no. 4: 2106. https://doi.org/10.3390/su13042106

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