“Chain The Carbon: How Blockchain Is Powering Transparent, Liquid Carbon Markets”

Abstract

The adoption of blockchain innovation is critical to revolutionize the carbon markets by improving transparency and liquidity and solving scalability concerns, however, limited studies have been conducted to address this concern. This research examines the effectiveness of blockchain in carbon trading, using the KRBN Index as a case study, by gauging its effects on the market's efficiency, transparency, and scalability. This research methodology comprises quantitative evaluation of secondary data and qualitative information based on literature, which can be described as mixed methods. Descriptive statistics, correlation analysis, and regression models are used to determine the impact of blockchain on trading activities and its performance indicators, such as volume, liquidity, and volatility. Moreover, this study proposes solutions to existing blockchain technology issues, such as layer two and cross-chain technologies, that would help to sustain the carbon markets in the long term. The results and findings shows that there is significant improvement in the level of transparency and efficiency when blockchain technology is used, while having advanced scaling solutions to the limitations of current implementations. This would augment the existing literature directed toward the impact on carbon credit market using blockchain technology.