Saudi Arabia’s plan to tackle climate change is the Circular Carbon Economy (CCE), where the entire carbon cycle (more than just emissions) is part of reducing net atmospheric carbon. To accomplish this, new carbon accounting practices and standards that can handle the granularity and scale of the carbon cycle and global economy will be required. Existing schemes to reduce carbon emissions often focus heavily on setting prices or emission quotas first and targeting specific entities. This a significant barrier to adoption because the value of carbon can be highly variable, and the entities involved may have significant political pushback to hinder legislation. A robust and inclusive global trading platform without imposed pricing can bypass this problem and allow for market-based price discovery as demand for decarburization is established. To accomplish this, we propose a digital tool that promotes and enables the CCE.
There are two main components:
1. A Carbon Accounting Token (CAT) that tracks carbon from the source (hydrocarbon extraction) through the economy as part of normal trade flows.
2. A Carbon Offset Governance (COG) mechanism that validates carbon management programs to ensure that removal of carbon is a trusted process.