Carbon Trading Micro-Markets

[abonn]

Name: Carbon Trading Micro-Markets

Purpose:

It is well known at this point that the BAU economic system is increasingly pressuring the environment, leading to environmental degradation and ultimately negatively affecting human life. Market mechanisms which aim to capture externalities related to economic activity include carbon trading markets. Currently, there are a number of regional carbon trading markets in the EU, California, and Canada. However, entry into these markets by small companie is extremely difficult, and generally it is only the largest players which can take part. Thus, small companies are left not being able to participate and reap the financial benefits of lowering their carbon emissions. To solve this problem, a District0x market is proposed which allows smaller companies to take part in micro-markets in their regions, with an opportunity to link these markets globally.

Description: Two core modules are necessary to utilize District0x as an infrastructure for this initiative 1) Financial accounting integration - To this end, there are already a number of methods available to link financial accounts with a carbon account. While there are a few large players that offer their consulting services, there are also myriad startups which offer software tools to do this. Partnering with one of these initiatives could provide the verification means by which the carbon account is communicated to the District.

2) Carbon Marketplace: Platform by which entities can trade their carbon. This is where companies that have made efforts to increase their environmental performance can trade their surplus carbon credits. In an completely digital ecosystem, this could entail trading the carbon tokens (representative of carbon credits) for ETH or other digital currency with utility for purchasing goods across a range of items (for instance, BTC can be used to purchase many different products now).

A number of auxiliary modules could address other opportunities within the District
1) Resource statistics - computes the usage of resources registered in the system 
2) Waste management - Micro-markets could be tied to physical regions and therefore provide an intelligence layer whereby business can link up with recyclers or users of waste materials. (see my other district proposal: https://github.com/district0x/district-proposals/issues/44 for details on this). 

It is important to note that the distribution of tokens to a number of businesses interested in taking part would be done in a fashion that is not much different to how carbon credits are delivered today. The EU for instance releases a large number of carbon credits to historical emitters to incentivise a reduction in emissions. One of the issues that has occurred is that far too many credits have been released in the EU market, crashing the carbon credit price and thus reducing the efficacy of this market instrument. This lesson needs to be taken into account should this district, or really any district relying on the trading of tokens, be developed.

Another thing to taken into account is that on the global scale, such Micro-Districts can easily be linked as their distribution of tokens would be done when a certain threshold of businesses decide to buy in (which would be done in their local currency). One of the questions currently is to how best structure this buy-in and distribution process.

[additional info:

One of the great things about District0x is that it provides a framework for setting up decentralized marketplaces. In the scope of this proposal, this would allow businesses to form local carbon credit markets to begin trading. As has already been outlined, such markets provide financial incentives for businesses to reduce their carbon footprint.

Small businesses especially have a difficult time in working through all of the bureaucracy necessary to participate in current carbon credit trading schemes. This is because such schemes are centralized and controlled by large bureaucratic bodies (e.g., the European Union). Thus, developing a District0x carbon trading micro-market - which provides a semi-automated carbon trading scheme - can significantly improve the access that businesses have to this carbon-reducing market mechanism.

*Note, I will need to read more about the Aragon Governance component of District0x to better outline how businesses could interact with their micro-markets, in addition to how such markets will be managed (e.g., ensuring that district tokens - i.e., traded carbon credits - are properly connected to tangible carbon reductions). This latter point, regarding carbon reductions, can be easily managed by existing digital solutions integrated into the financial accounts of businesses. The main area of inquiry I have now is how to best link these systems with a District0x district. ]

I look forward to speaking with others in this community who see the potential of District0x in helping create a more sustainable world.

ETH: 0xF9dECAcFF15Da68eb8C55D5f7D698d92cd2Ce9F8 Slack name: a.bonneau

[Alexand0x]

I really like this proposal, but would like to see the purpose more well defined. The current writing is more of a background than a defined purpose.

[abonn]

@Alexand0x Thanks for your feedback. I have edited the original text with more information.

[Bradymck]

Hey @abonn

I'm not sure if you're aware but we recently launched a new bounty to migrate your proposals to the actual District Registry: https://registry.district0x.io/

We're replacing the old voting app with the registry. Let me know if you need help but I would love to see you migrate this over so you can claim your DNT.

It does take a 10,000 DNT submit to submit your proposal but this gives you an extra 2000 you can stake in the registry beyond the deposit amount.

Hit me up on Telegram or Discord if you need help or have questions.

Telegram: https://t.me/district0x/75217 Discord: https://discord.gg/P9RQejv

PS, please excuse the canned response. I am encouraging everyone here to start migrating so they can claim their 12000 DNT.