Protocol for Digitalised MRV: enhancing efficiency and trust in carbon markets

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A new EBRD paper

By Dmitry Halubouski

Robust monitoring, reporting and verification (MRV) frameworks are a cornerstone underpinning and facilitating impactful climate action across the globe. Such systems encourage transparency, accountability and trust between parties and provide a high degree of assurance to the international community that efforts to combat climate change are yielding the expected results.

Strong MRV systems that credibly link investments to measurable results on the ground are also instrumental in facilitating access to climate finance and carbon markets. Impact investors, international climate donors and carbon credits buyers increasingly demand higher levels of stringency in climate disclosure, impact assessments and reporting.

However, conventional MRV systems substantially rely on manual data entry and management, making them quite cumbersome, prone to error and costly to implement with a sufficiently high degree of accuracy, reliability and timeliness.  

At the same time, the latest advances in digital and information technologies (such as smart meters, digital sensors, distributed ledgers) can potentially generate significant gains – in terms of cost, time, accuracy, transparency and reliability – throughout the MRV process. As such technological advances find their way into the practical reality of MRV systems, it is important to provide a common framework for principles and requirements that such digitalised MRV (D-MRV) systems should follow in order to provide assurance of their integrity and robustness.

It is with these considerations in mind, that the EBRD, supported by the Spanish Office of Climate Change, and building on inputs from members of the Joint MDB Working Group on Article 6, has released the Protocol for Digitalised MRV (D-MRV Protocol) on its Green Economy Transition Knowledge Hub. The Protocol could be viewed as an instrument for instilling trust in D-MRV approaches within the climate community.

The D-MRV Protocol, by establishing the basic requirements for and principles of operation of a D-MRV system, aims to ensure the accuracy, consistency, traceability and integrity of mitigation outcome data throughout the MRV data flow process. The protocol could also serve as the basis for certification of such systems by independent verification and validation entities, facilitating their integration into the design of climate projects and, eventually reducing MRV transaction costs and time to market for mitigation assets through efficient verification and issuance.

By proposing the D-MRV Protocol, the EBRD would like to contribute to the dialogue between key climate community stakeholders – including environmental standards, independent verifiers, national climate authorities, MDBs – on defining common approaches to enhanced digitalised MRV with the ultimate goal of facilitating the transparency, integrity and impact of climate action around the globe.

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