The Paris Agreement’s decentralized and bottom-up approach to climate action poses an enormous accounting challenge by substantially increasing the number of heterogeneous national, sub-national, and non-state actors. Current legacy climate accounting systems and mechanisms are insufficient to avoid information asymmetry and double-counting due to actor heterogeneity and fragmentation. This paper presents a nested climate accounting architecture that integrates several innovative digital technologies, such as Distributed Ledger Technology, Internet of Things, machine learning, and concepts such as nested accounting and decentralized identifiers to improve interoperability across accounting systems. Such an architecture can enhance capacity building and technology transfer to the Global South by creating innovation groups, increasing scalability of accounting solutions that can lead to leapfrogging into innovative systems designs, and improving inclusiveness.
July 06 2021
Climate change refers to both global warming and the resulting large-scale shifts in weather patterns. In recent years, an increasing number of governments have issued climate emergency declarations, and, in doing so, have committed to prioritising and devising measures to mitigate climate change.
In tandem with this global direction, there is a growing trend of companies internally pricing their emissions, as they find it increasingly necessary to assign a monetary value to emissions and factor the same in their financial decisions. Investor pressure is also mounting – the financial sector is increasingly vocal on climate action. Blackrock, the world’s biggest asset manager with US$6.9 trillion assets under management, announced in January 2020 that it would put sustainability at the heart of its investments and divest from fossil-fuel companies.