Harvard University student Alvin Tian is looking to create blockchain technology specifically for the overseas carbon market. Tian calls his concept "BlockCarbon," and he's developing plans to get it off the ground, inspired by his time working in the global energy sector.
The BlockCarbon team is looking to strike a deal with an energy market exchange in China to introduce more trust and transparency via blockchain. Although it's mostly associated with cryptocurrencies, blockchain at its core is an anonymized, decentralized system for managing data and keeping accounts, and its proponents think it has far-reaching applications.
Tian, who spent a decade working in the energy sector and grew up in China, took a course on energy, business and entrepreneurship at MIT a year ago. He met friends there who backed his idea and wanted to be part of his project.
Although the MIT course may have been his “trigger point,” Tian said introducing blockchain to the carbon market had always been in the back of his mind.
“I think the idea was even before I came to [the] U.S.," he said. "When I was working in the U.K., I was working in energy trading, so I had already seen that the blockchain technology had been introduced to energy trading."
Tian said the carbon market currently experiences a liquidity issue, since the number of participants in it is quite small. He hopes his technology can help address that by allowing companies to better hedge their risk while cutting down on transaction costs.
Blockchain, Tian thinks, goes hand in hand with transparency and trust.
"Everything is stored in the blockchain system, and nobody can really change it," he said.
Tian was able to develop a plan and recruit a fellow Harvard Kennedy School student to join him in his venture. They are currently working with the Harvard i-lab program to plan out their next steps before they graduate at the end of the year. If the duo is able to get a commitment from China, then they hope to launch BlockCarbon sometime in 2022, Tian said.
“We are trying to convince the exchange to form a cooperation with us,” Tian said. “We had some progress before the pandemic, but because of the pandemic, the conversation with the exchange has been kind of paused.”
Tian hopes to convince his potential partners that a third, neutral party is necessary to create transparency and restore trust in the market. Next, he plans to recruit experts on blockchain and climate change, along with engineers who can build out the technical side of BlockCarbon. Tian expects to bring in revenue by charging a commission fee on transactions.
Tian hopes that introducing blockchain can improve inefficiencies like inaccurate data on carbon emissions. Because China is moving toward renewable energy, Tian thinks now is the time to strike. He sees BlockCarbon's technology as a tool for companies to measure their risks and stay informed about the market.
“If it doesn't work [out with the exchange] then we probably will work on other directions, but the idea of introducing blockchain to the market I assume is still a valid idea,” Tian said.
Jordan Frias is a contributing writer for BostInno.
