What Can Blockchain Technology Do to Combat Climate Change? Experts Have the Answer

Introduction

The global climate crisis has been a hot topic for a while. The conversation has changed, and there is now a consensus. This has allowed the discussion to shift to how to address the issue of climate change. The United Nations adopted the Sustainable Development Goals (SDGs) in 2015, which was a pivotal moment in reaching this point. Its mission is to provide a blueprint to help all people achieve a better and more sustainable world.

Emerging technologies have been the focus of the debate on how to combat the global climate crisis. In 2017, the UNFCCC's Framework Convention on Climate Change (UNFCCC), highlighted the importance blockchain technology for combating climate change worldwide. The UNFCCC secretariat provided some examples of how blockchain technology can be used:

"In particular transparency, cost-effectiveness, and efficiency benefits, which may in turn lead to greater stakeholder involvement and enhanced creations of global public goods, are currently considered the main potential advantages."

The potential for decentralized technologies to aid in achieving the SDGs is real. They can recast traditional approaches to sustainable development through the use of blockchain technology. Many countries are turning to new technologies to combat the climate crisis. This was evident in 2020. Russia, India and Qatar are just a few examples.

Concerns about Bitcoin's (BTC's) carbon footprint became a hot topic in 2021. This forced major media outlets around the world to discuss Bitcoin's energy consumption as well as carbon emissions. Experts had been discussing the pros and disadvantages of Bitcoin mining for some time. Bitcoin supporters argue that the energy used by Bitcoin mining is insignificant "when compared to global energy production and waste" as well as that BTC mining is more efficient than BTC mining.

It is best to forget about the debate over who is right or wrong and focus instead on the impact. The saying goes that every cloud has its silver lining. This is the case for the crypto industry, which has decided to prioritize green technology and offset Bitcoin's carbon emissions.

Cointelegraph reached out and interviewed a variety of experts in emerging technology whose goals directly relate to sustainable development, technological innovation, to find out how these technologies could impact the fight against climate change. The following question was asked of the experts: How can emerging technology help achieve the U.N. Sustainable Development Goals, and reduce the impact of climate change?

  1. Adelyn Zhang of Chainlink Labs :

Adelyn, chief marketing officer at Chainlink Labs is a decentralized Oracle network.

"While many are willing to change their consumption habits in order to reduce climate change, it will take significant incentives to encourage sustainable behavior. Blockchains and Oracle networks can combine to create self-executing contracts that automate incentives systems that reward environmentally friendly practices.

The Green World Campaign and Cornell University have created smart contracts that make use of satellite data to reward landowners who are able to regenerate large areas of land. This includes increasing tree cover, improving soil, and other beneficial agricultural practices. Chainlink oracles can pull satellite imagery proof of land improvement onto the blockchain to trigger the smart contract and release a payment. This system allows land stewards to quickly and efficiently get their rewards. The system is also designed to reward those who make a difference. Payments are only made when real-world conditions are met and verified on-chain. The entire process can be replicated across many sectors and is scalable, fraud-proof and automated.

  1. Candice Teo, Blockchain & Climate Institute:

Candice is director of communications at Blockchain & Climate Institute. This think tank, which is not for profit, consists of an international network made up of experts who work at the intersections of blockchain technology and climate change.

"We are in a moment where climate action is urgently needed. Mark Carney, the United Kingdom Treasury Select Committee's chairman, stated that 'we have left it extraordinarily late' to address climate change. It is therefore crucial that we make 'good wagers' for the future, and not make things worse.

There is currently a lot of mistrust between various stakeholders, including climate finance recipients and donors. Countries have faced major challenges in achieving their climate finance promises due to issues such as measurement, reporting, and verification (MRV). Blockchain's consensus mechanism, and critical immutability feature, particularly when paired with emerging technologies like AI and IoT can significantly increase MRV, driving trust and climate funding that goes towards carbon assets management/trading and biodiversity conservation (REDD ), community-renewable energy projects, and other areas.

According to the International Energy Agency (IEA), there is a need to decrease peak energy demand. This is where the challenge lies in achieving it while renewables catch up. Blockchain has been proven to be valuable in local energy trading programs. Using AI and blockchain, peak energy demand can be predicted and managed.

Blockchain is essential for facilitating circular economies and biodiversity, smart cities and blue economy, as well as emissions trading and management.

  1. World Bank Spokesperson:

As international carbon markets under Paris Agreement begin to take shape, there is a lot of potential for innovation, including blockchain technology. These technologies have two main benefits: they can increase transparency and help improve the functioning of future carbon market.

Smart sensors, drones, artificial intelligence and drones could be used to digitize project-level monitoring and verification systems. These technologies can also be combined with blockchain encryption to protect the integrity and immutability of data under a digital MVR system. The main benefit of this technology would be a reduction in time and effort required to generate carbon credits. This would lower barriers to entry into carbon markets. In collaboration with its partners, the World Bank is currently developing protocols for digital MRV system.

Blockchain technology can be used to track carbon credit transactions globally, tokenize carbon credits, and link transactions with smart contracts. It could securely store information necessary to track carbon credits. This is currently being tested by the World Bank's Climate Warehouse. It is a meta-registry which demonstrates how national registers can be connected. It uses blockchain technology to track transactions among parties. We expect this to link with the digital MRV and create a digital ecosystem that is credible, transparent, and liquid for carbon markets.

  1. Emin gun Sirer of Ava Labs

Emin, a Cornell University computer science professor, is the founder and CEO for the Avalanche blockchain protocol and codirector of the Initiative for Cryptocurrencies & Smart Contracts (IC3).

"We need to ensure that new technologies reduce or eliminate negative actions that impact our planet. This outlook doesn't just apply to blockchain. Our planet will not survive without concerted and intentional efforts to reduce climate change.

Many creators, like Satoshi, didn't care about climate impact when they first introduced proof-of-work-based Blockchain systems. They simply wanted their technology to work.

Now we are able to refer back to past innovations in order for us develop sustainable technologies and protocols. Proof-of-stake, which is an example of people working together to improve the capabilities of blockchain in a way that aids in fighting climate change, is a great example. This is only a small part of what blockchain-powered technology can do for climate change.

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Many teams are striving to push the limits. Blockchain companies can make progress towards a sustainable economy by reducing hardware requirements, integrating with ecofriendly hardware, and collaborating closely with climate change experts.

  1. Francisco Benedito, ClimateTrade:

Francisco is CEO of ClimateTrade. ClimateTrade is a fintech company that helps organizations offset CO2 emissions.

"Blockchain is a technology that helps to combat climate change on two levels.

One hand, it is clear that carbon markets are opaque and vulnerable to fraud. Carbon credits were the first digital certificate to be issued. However, they were implemented in separate registries and involved multiple parties who do not trust one another. Do you sound familiar?

In the current environment, it seems sensible to use a single distributed ledger for the recording of the creation and movement of carbon credits in the market.

This is the first step in which blockchain technology can be used to improve existing processes. It makes them more efficient and transparent as well as secure, faster, cheaper and quicker. The real disruption is when blockchain technology enables new models that are not only possible with existing mechanisms, but also creates entirely new ones.

Blockchain technology is very powerful, but its greatest advantage in this context is its ability to influence human behavior. Blockchain applications are becoming more popular and widely accepted. This allows us to create financial incentives schemes that encourage the attainment of decarbonization goals and allow Earth to remain a comfortable place to call home. And that is exactly what we are doing.

  1. Kristoffersen from KPMG:

Linda is an advisor manager at KPMG, a Big Four accounting firm. She is also a supporter of blockchain.

Companies are making bold promises to deliver on their promises of a net zero-carbon future. They will need to embrace emerging technologies such as blockchain to achieve their goals. Investors, stakeholders and the public demand accountability. Companies will be under greater pressure to reveal real emissions while also ensuring trustworthiness and auditability of carbon emissions data and providing proof.

Blockchain is an auditable system of record that can track emissions provenance, provide data security and prevent double-counting of emission. It also allows for transparency in data processing steps, which will allow environmental performance to be verified and protect against fraudulent claims. Blockchain can offer the same benefits for carbon credits and offsets where transparency is a concern and double-counting credits are a problem.

Smart contracts can also be used to automate and encourage participation in sustainable practices that involve tight coordination between individuals and governments.

  1. Marco Schletz, Data-Driven EnviroLab, and Soren Salomo at TU Berlin:

Marco is a research associate with Data-Driven EnviroLab. This international, multidisciplinary group of scientists, programmers, visual designers and researchers aims to strengthen environmental policy at all levels. He is also an innovation fellow with the Open Earth Foundation, which is a non-profit organization that promotes sustainable development through education and art.

Soren is an instructor of innovation management and technology at the Technical University of Berlin.

"Bitcoin was launched in 2009 and was the first widespread application of blockchain or distributed-leadger technologies. Despite blockchain and Bitcoin maturing rapidly, Bitcoin is still commonly used and seen as a generic term for blockchain. Because of this, Bitcoin's energy consumption and other problems create a shadow effect that overshadows blockchain technology's potential benefits as a powerful tool to accelerate climate change action.

Blockchain technology allows for a distributed network design that increases transparency and reduces information inequalities among heterogeneous climate actors. This design relies on the bottom-up contributions of all actors in order to enable triangulation from independent data sources. These new designs are urgently needed to overcome legacy system thinking, path dependence, and incentivize collaboration to achieve major change.

Alternative data governance structures are necessary to ensure that critical emissions data is accurate and valid. This was evident when Greta Thunberg criticized the U.K. for lying about reducing its emissions. There are many examples of blockchain supporting and accelerating climate action, including Yale Openlab's Open Climate and the World Bank Climate Warehouse. Also, the Blockchain for Climate Foundation and the Climate Ledger Initiative.

  1. Tom Baumann, Climate Chain Coalition:

Tom is co-chair and founder of the Climate Chain Coalition. This open global initiative promotes collaboration on DLT/Blockchain and digital solutions to improve climate action.

"Digital solutions can help support a low carbon economy. According to the World Economic Forum, digital solutions could help reach 15% of the Paris Agreement goals. These solutions can be applied across the economy to create smart grids and buildings and smart transportation systems, as well as integrate with digital services.

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Digital tools can link sustainable production and sustainable consumption in an efficient and equitable way, allowing for a fair transition. Distributed ledger technologies, such as blockchain, can improve international and intersectoral collaboration beyond the carbon trading market.

DLTs can be used in combination with other technologies such as the Internet of Things to enable digital MRV-based climate action tracking. DLTs can be used to facilitate innovative natural resource management. This will help to reduce market failures and recognize and preserve the true value of natural resource while also considering the rights of future and present generations.

Blockchain has the potential to revolutionize multi-stakeholder empowerment. Blockchain allows digital identities and asset management to link to people, organisations, and businesses. It can enforce rules and make governance a community effort. More stakeholders can be involved in decision-making by using governance tokens and autonomous decentralized organizations.