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September 25, 2015 Sacramento, CA Zhang Xiaoguang Sinocarbon Innovation & Investment Co.,Ltd. CONNECTIVITY CHOICES FOR REGISTRY WORKSHOP “BUILDING REGISTRIES TO SUPPORT THE NEXT GENERATION OF CARBON MARKETS” PARTNERSHIP FOR MARKET READINESS
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September 25, 2015 Sacramento, CA Zhang Xiaoguang Sinocarbon Innovation & Investment Co.,Ltd. C ONNECTIVITY CHOICES FOR REGISTRY W ORKSHOP “B UILDING R.

Dec 31, 2015

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Page 1: September 25, 2015 Sacramento, CA Zhang Xiaoguang Sinocarbon Innovation & Investment Co.,Ltd. C ONNECTIVITY CHOICES FOR REGISTRY W ORKSHOP “B UILDING R.

September 25, 2015Sacramento, CA

Zhang XiaoguangSinocarbon Innovation & Investment Co.,Ltd.

CONNECTIVITY CHOICES FOR REGISTRYWORKSHOP “BUILDING REGISTRIES TO SUPPORT THE NEXT GENERATION OF

CARBON MARKETS” PARTNERSHIP FOR MARKET READINESS

Page 2: September 25, 2015 Sacramento, CA Zhang Xiaoguang Sinocarbon Innovation & Investment Co.,Ltd. C ONNECTIVITY CHOICES FOR REGISTRY W ORKSHOP “B UILDING R.

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Systems to be connected to a registry Connectivity architecture choices Connectivity protocol choices Security measures

Outline

Page 3: September 25, 2015 Sacramento, CA Zhang Xiaoguang Sinocarbon Innovation & Investment Co.,Ltd. C ONNECTIVITY CHOICES FOR REGISTRY W ORKSHOP “B UILDING R.

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Potential systems

Trading System

Emissions Report SystemRegistry System

Other Registry Systems

Information source systems

Identity System

Auction platform

Third party platforms

Page 4: September 25, 2015 Sacramento, CA Zhang Xiaoguang Sinocarbon Innovation & Investment Co.,Ltd. C ONNECTIVITY CHOICES FOR REGISTRY W ORKSHOP “B UILDING R.

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Objectives of connecting systems

• Perform cross market transactions• Reconciliations

• Perform cross market transactions• Reconciliations

Registries

• Perform cross platform carbon unit transfer transactions• Reconciliations

• Perform cross platform carbon unit transfer transactions• Reconciliations

Third party

platforms

• Achieve information from information source systems• Achieve information from information source systemsInformation

source systems

Page 5: September 25, 2015 Sacramento, CA Zhang Xiaoguang Sinocarbon Innovation & Investment Co.,Ltd. C ONNECTIVITY CHOICES FOR REGISTRY W ORKSHOP “B UILDING R.

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Systems to be connected to a registry Connectivity architecture choices Connectivity protocol choices Security measures

Outline

Page 6: September 25, 2015 Sacramento, CA Zhang Xiaoguang Sinocarbon Innovation & Investment Co.,Ltd. C ONNECTIVITY CHOICES FOR REGISTRY W ORKSHOP “B UILDING R.

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Central hub based online connectivity

Page 7: September 25, 2015 Sacramento, CA Zhang Xiaoguang Sinocarbon Innovation & Investment Co.,Ltd. C ONNECTIVITY CHOICES FOR REGISTRY W ORKSHOP “B UILDING R.

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Peer to peer based connectivity

Page 8: September 25, 2015 Sacramento, CA Zhang Xiaoguang Sinocarbon Innovation & Investment Co.,Ltd. C ONNECTIVITY CHOICES FOR REGISTRY W ORKSHOP “B UILDING R.

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Offline connectivity

Page 9: September 25, 2015 Sacramento, CA Zhang Xiaoguang Sinocarbon Innovation & Investment Co.,Ltd. C ONNECTIVITY CHOICES FOR REGISTRY W ORKSHOP “B UILDING R.

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Comparison of connectivity architectures  Central Hub Peer to peer Offline

Implementation complexity

High implementation complexity. Depends on the transaction rules

to be implemented. Relatively low for implementing

unified market rules.

High implementation complexity. Depends on the transaction rules to

be implemented. Relatively low for implementing

multiple rules.

Low implementation complexity.

Performance

Capable of processing automated transactions.

Relatively low performance due to central hub bottle neck.

Capable of processing automated transactions.

Relatively high performance due to peer to peer processing.

Not Capable of processing automated transactions.

Low performance due to offline processing.

Reliability

Central hub failure will affect all the connected systems.

Easy to ensure the reliability after updating central hub.

Single peer failure will not affect the connected systems seriously.

Difficult to ensure reliability after updating one peer.

High reliability.

Security Easy to apply unified security measures.Difficult to apply unified security measures.

Vulnerable to information stealth.

Maintenance cost

Relatively low maintenance cost for connecting a large number of systems using single market rules.

High maintenance cost for connecting a small number of systems.

Depends on the connectivity of each peer. Low maintenance cost.

Data consistency

Easy to ensure data consistency with central hub based transaction log.

Easy to ensure the unified transaction check rules.

Difficult to ensure data consistency among peers.

Difficult to ensure the unified transaction check rules without erros.

Difficult to react to data changes of a connected system.

Page 10: September 25, 2015 Sacramento, CA Zhang Xiaoguang Sinocarbon Innovation & Investment Co.,Ltd. C ONNECTIVITY CHOICES FOR REGISTRY W ORKSHOP “B UILDING R.

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Implementation technologies

  Socket level technology Webservice based technology

Implementation complexity

High Low

Performance High Low

Reliability Difficult to ensure reliability. Easy to ensure reliability.

Maintenance cost High Low

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Systems to be connected to a registry Connectivity architecture choices Connectivity protocol choices Security measures

Outline

Page 12: September 25, 2015 Sacramento, CA Zhang Xiaoguang Sinocarbon Innovation & Investment Co.,Ltd. C ONNECTIVITY CHOICES FOR REGISTRY W ORKSHOP “B UILDING R.

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Connecting registries- principles

Specify the transactions.

Specify accounting models and transaction workflows.

Specify the carbon units involved.

Specify the transaction check rules.

Specify connection architecture.

Specify data package formats.

Specify data connection available rules.

Specify security rules.

Specify data transmission technology.

Page 13: September 25, 2015 Sacramento, CA Zhang Xiaoguang Sinocarbon Innovation & Investment Co.,Ltd. C ONNECTIVITY CHOICES FOR REGISTRY W ORKSHOP “B UILDING R.

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Connecting registries- Brief review of DES

Available for processing most of the transactions in a

carbon market.

Unified accounting model and transaction workflows.

Support Kyoto units, and EUA.

Unified the transaction check rules.

Central hub based protocol.

Unified data package formats. (Serial number identifiers)

7X24 availability.

Unified security requirements.

SOAP based data transmission.

Page 14: September 25, 2015 Sacramento, CA Zhang Xiaoguang Sinocarbon Innovation & Investment Co.,Ltd. C ONNECTIVITY CHOICES FOR REGISTRY W ORKSHOP “B UILDING R.

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Connecting registries- Peer to peer protocol with mirroring approach

Carbon unit cache account

Holding account

Holding account

System 1

System 2

Carbon unit information

Data exchange interface

Page 15: September 25, 2015 Sacramento, CA Zhang Xiaoguang Sinocarbon Innovation & Investment Co.,Ltd. C ONNECTIVITY CHOICES FOR REGISTRY W ORKSHOP “B UILDING R.

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Connecting registries- Reconciliation

Validate account totals.

Validate carbon unit blocks.

Review transaction history logs.

Manual intervention.

Page 16: September 25, 2015 Sacramento, CA Zhang Xiaoguang Sinocarbon Innovation & Investment Co.,Ltd. C ONNECTIVITY CHOICES FOR REGISTRY W ORKSHOP “B UILDING R.

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Connecting third party platforms

Mirroring approach can be applied.

Total validation level reconciliation.

Total records be determined by the registry.

Webservice based technology is applicable.

Offline approach can be applied.

Page 17: September 25, 2015 Sacramento, CA Zhang Xiaoguang Sinocarbon Innovation & Investment Co.,Ltd. C ONNECTIVITY CHOICES FOR REGISTRY W ORKSHOP “B UILDING R.

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Connecting information source systems

Specify information synchronization cycle.

Specify information synchronization workflow.

Specify data package format.

Specify data update reaction scheme.

Websevice based technology can be applied.

Offline approach can be applied.

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Systems to be connected to a registry Connectivity architecture choices Connectivity protocol choices Security measures

Outline

Page 19: September 25, 2015 Sacramento, CA Zhang Xiaoguang Sinocarbon Innovation & Investment Co.,Ltd. C ONNECTIVITY CHOICES FOR REGISTRY W ORKSHOP “B UILDING R.

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Connection risks

• Data leakage• Data tempering• Data inconsistency• Data loss• Fraudulent transmission

• Data leakage• Data tempering• Data inconsistency• Data loss• Fraudulent transmission

Online approach

• Data leakage• Data inconsistency

• Data leakage• Data inconsistency

Offline approach

Page 20: September 25, 2015 Sacramento, CA Zhang Xiaoguang Sinocarbon Innovation & Investment Co.,Ltd. C ONNECTIVITY CHOICES FOR REGISTRY W ORKSHOP “B UILDING R.

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security measures

• Reliable workflow design• Data encryption scheme• Reconciliation• VPN connection• Point to point connection• IP and port access constraint• Dedicated connection sever• Other network security devices

• Reliable workflow design• Data encryption scheme• Reconciliation• VPN connection• Point to point connection• IP and port access constraint• Dedicated connection sever• Other network security devices

Online approach

• File encryption• Data change react scheme

• File encryption• Data change react scheme

Offline approach

Page 21: September 25, 2015 Sacramento, CA Zhang Xiaoguang Sinocarbon Innovation & Investment Co.,Ltd. C ONNECTIVITY CHOICES FOR REGISTRY W ORKSHOP “B UILDING R.

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Zhang XiaoguangSinocarbon Innovation & Investment Co.,Ltd.

[email protected]

For more information on the Partnership for Market Readiness, please contact:

[email protected]

Thank You for Your Attention