What is digital MRV? Digital measurement, reporting and verification to enhance climate actions and sustainability
The MRV sector is about to be transformed through digital innovations and distributed ledger technology to enhance trust and stakeholders’ abilities to mobilize resources for, and to participate in, climate actions and the sustainable development goals
This post supports the launch of DigitalMRV, an innovative solution by the strategic alliance of ClimateCHECK and IOTA. If you are interested in more information or to engage with us, please post a comment or send me a message. There is an additional Medium post with more information about our first project with the Government of Canada.
Measurement, reporting and verification (sometimes known as monitoring, reporting and verification), or MRV for short, is a well-known issue within the climate change community. Although it is essential to recognize MRV is also relevant beyond climate change including but not limited to cleantech and the sustainable development goals. The importance of MRV is to collect and evaluate evidence to provide reliable information that enables more efficient and effective management of a specific issue, such as greenhouse gas (GHG) emissions.
MRV is an immature field with several challenges
Although the term “MRV” was popularized at the Bali COP in 2007, there is over 25 years of MRV practice (also for environmental and sustainability reporting and assurance) and yet there remain major challenges, including but not limited to inefficiency, credibility, utility and cohesiveness of MRV processes and results. For example, reducing the relatively high costs and long timelines, as well as the lack of confidence about claims relating to products, companies, policies, finance, markets and so on.
Rapid, deep decarbonization and diverse, global bottom-up action needs more and better MRV
With the 2020s called “the decade of action”, there is a clear need to scale finance to accelerate exponential actions and transformational change, such as “deep decarbonization” and low carbon transition pathways, and correspondingly there is a clear need for a lot more and better MRV — not least of which to address concerns about “greenwashing”. “Better” refers to various issues that can be improved, some noted above as well in the consultation document (November 2020) by the Taskforce for Scaling Voluntary Carbon Markets. The document highlights the value that digitization can provide for carbon markets (Recommendation 11), in particular digital MRV in order to save time and money; and improve confidence.
In addition, as countries around the world implement their bottom-up nationally determined contributions (NDCs) under the Paris Agreement, there is a need to improve the cohesiveness and interoperability of MRV systems and activities, to avoid double-counting and double-claiming as well as to support climate change strategies to be more cost effective and efficient in achieving goals. Investing in better MRV systems for climate change can have a better ROI — financially and for sustainability overall.
Humble beginnings, but major changes are in motion
Certainly MRV has been using digital tools for many years, including:
- Spreadsheet calculators
- GHG inventory software and data management systems
- Life cycle inventory databases and life cycle assessment software
- Emission factor databases
- Knowledge hubs
- Remote sensing
- CEMS (Continuous Emissions Monitoring Systems)
- Online reporting and registries
Although those tools have all been valuable contributions to advance MRV from paper notes, photos and typed-up reports, recently there is a major paradigm shift towards digital auditing for the assurance profession and the financial sector — billions of dollars are being invested to adopt digital solutions. In parallel, but as yet at a lower level of investment to date, digital innovations are starting in other sectors for non-financial digital MRV. With the rapid advancement of digital innovations, digital MRV is set to evolve in amazing ways. Some high profile examples during 2020 include ClimateTRACE and the EU DestinE have been launched to utilize an array of digital technologies including artificial intelligence, satellite imagery, machine learning, big data analytics, open data marketplaces, IoT and digital twins to supporting climate monitoring, modeling and analysis. As well, there has been some interesting thought leadership and visions of digitally-enabled sustainable futures. For example, the UNEP’s publication “The Case for a Digital Ecosystem for the Environment: Bring together data, algorithms and insights for sustainable development” and also “Towards Our Common Digital Future”.
So what exactly is the “new” digital MRV?
However, there remains the basic question — “what exactly is digital MRV”? This question might seem whimsical, yet any service or solution that purports to provide confidence to stakeholders about the integrity of data and information based on standards should have some consensus about what it is, what it does, what makes it successful, etc. As described above, the overall MRV system needs to be improved in order to be more cohesive. Therefore, digital MRV as part of an emerging system involves more than utilizing digital innovations for the implementation of MRV standards and activities. Indeed it is a holistic and systemic approach for next generation MRV systems and solutions, including the knowledge base and participatory standardization systems to develop MRV “smart standards” and tools that can be more actively integrated with climate change strategies and solutions.
Diving deeper into the question of what is digital MRV — is there a specific minimum combination of technologies and capabilities of what constitutes a digital MRV solution, or perhaps is it an array of options that can be combined in different ways according to specific contexts? There are many variations of digital MRV solutions entering the market now and that will evolve individually and collectively for several years. Below describes some of the issues and criteria stakeholders could consider to assess digital MRV solutions.
Digital MRV Solution Evaluation Description
Scope of Use Case Applications
What types of use case applications does the digital MRV solution serve? For example, carbon credit projects, low carbon supply chains, entity inventories, products, technologies, … and what are the system boundaries and value chain included in those applications? Which sectors does the digital MRV solution serve?
Scope of MRV Activities
What MRV activities have been digitized and incorporated into the solution? For example, data collection and ingestion using digital technologies from more sources and with bigger volumes of data. Data analytics and calculations are automated to assess data and compute results. Data and information are incorporated into standardized reporting templates. What data QA/QC activities and verification/assurance activities are performed by the digital MRV solution? Furthermore, to what extent have MRV activities been digitized, and what MRV activities still performed manually with human involvement? What MRV standards, protocols, guidelines, etc. does the digital MRV solution enable?
Scope of Digital Technologies
How have MRV activities been digitized and automated? What digital technologies are part of the digital MRV solution, whether directly part of the solution or integrated with the solution? For example, digital sensors, IoT devices, digital twins, remote sensing, real-time data, DLT (Blockchain), smart contracts, AI, ML, data analytics… and at what level of maturity / sophistication?
Transparency
To what degree is the solution a “black box” (overall and for each component)? How does the digital MRV solution enable auditors and programs to certify the solution meets or exceeds required MRV performance?
Sustainability
How “green” is the IT, especially the DLT, in the digital MRV solution? Does the digital MRV solution provide evidence for the energy it saves relative to conventional MRV (e.g., avoided travel emissions) and also relative to other MRV solutions? If the digital MRV solution has a worse environmental footprint, how is that compensated to ensure the integrity of the net environmental benefit?
Solution Ecosystem
Who are the partners and stakeholders involved in the design and implementation of the digital MRV solution? For example, has the solution been developed mainly by “tech experts” with a limited track record on climate change? Is it relatively easy to connect the digital MRV solution with other solutions to enable both end-to-end and broad participation throughout the value chain?
Professional Services and Resources
Does the digital MRV solution provider also offer professional services to deliver a complete package of deliverables and results? For example, perform initial digital MRV readiness assessments, methodological development (e.g., transform conventional standards into “smart standards”), project design as well as conventional MRV activities? What resources, such as expertise (technical, climate and sustainability), IP, financial, infrastructure, does the digital MRV solution provider have to expand and mature applications in cooperation with customers and stakeholders?
Vision and Values
How well do the digital MRV solution provider’s vision and values align with market and stakeholder needs and expectations? How does the digital MRV solution provider’s vision, and action plan, of the climate and SDG space differ from others? For example, considering both technical (e.g., hardware, software, content, open data, open source) and non-technical issues (e.g., governance, markets, equity, empowerment) are digital innovations aligned with governance innovations, social innovations, financial innovations, etc.?
In further considering a potential definition for digital MRV, it is also helpful to acknowledge activities to digitize MRV will be a gradual process. Currently, perhaps 10% of MRV activities are utilizing advanced digital tools. That portion will increase gradually, but is unlikely to achieve 100% over the next 5–10 years, as some stakeholders may need more time until they are able to support total digitization. In our opinion, non-technical issues such as governance and social matters are among the major challenges to design and realize a fully mature digital MRV system, as well more generally for digital solutions for climate. That is why we, along with 1000s more, are involved in multi-stakeholder initiatives like the Climate Chain Coalition, Hyperledger, INATBA and the InterWork Alliance.
Another perspective towards defining digital MRV is to consider a scale of 1 to 10 for a frame of reference. 1 representing MRV using common digital tools (e.g., emission factor databases, emission quantification software). 10 representing the nearly full implementation and global realization of the digital innovations and the digital future as envisioned by the likes of the UNEP report, Climate TRACE, etc. In our opinion, the current status (level of maturity) of digital MRV for climate is low and in the range of 2/10 or 3/10 — which is an overall average, but recognizing there are some exceptions in certain sectors. We foresee the possibility, actually necessity, to advance digital MRV to a 4/10 or 5/10 over the next year, which is our aim in launching DigitalMRV. In the spirit of the goals of the Taskforce and like-minded initiatives such as the World Bank Climate Warehouse, we are committed to advance our efforts over the next few years in parallel and in collaboration with others towards the ultimate goal of a 10/10 digital MRV system within a larger digital climate system.
Additional Resources
The following list provides recent examples of our contributions to the body of knowledge about digital MRV for climate change:
- Towards Ontology and Blockchain Based Measurement, Reporting, and Verification For Climate Action, submitted to SSRN October 2020 — https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3717389
- Blockchain and Emerging Digital Technologies for Enhancing Post-2020 Climate Markets, published by the World Bank March 2018 — https://openknowledge.worldbank.org/bitstream/handle/10986/29499/124402-WP-Blockchainandemergingdigitaltechnologiesforenhancingpostclimatemarkets-PUBLIC.pdf?sequence=1&isAllowed=y
- Blockchain for Planetary Stewardship — Using the Disruptive Force of Distributed Ledger Technology to Fight Climate Disruption, published by the Blockchain Research Institute January 2018 — https://www.transparency-partnership.net/system/files/document/Baumann_Blockchain%20for%20Planetary%20Stewardship%20Framework_Blockchain%20Research%20Institute.pdf
- DigitalMRV launched in partnership with IOTA December 2020 — www.digitalmrv.earth
Tom Baumann
Co-Founder, DigitalMRV
