Blockchain has been touted as a solution for problems ranging from curing cancer to legitimizing the black market in the US Prison System. While some use cases are definitely more tenuous than others, there is currently a lot of faith in blockchain climate change solutions. But is it justified?
The Climate Change Problem Is Getting Worse
In October last year, the UN issued its starkest warning on climate change yet. We have only twelve years left to restrict global warming to a maximum of 1.5 C (2.7 F) compared to pre-industrial levels. Even half a degree beyond this will bring far worse risks of extreme heat, drought, and floods. Furthermore, the damage caused by climate change is expected to displace more than 143 million people over the next three decades, who will be forced to flee their homes to escape climate-related issues.
The Paris Agreement on climate change aims to limit the increase to less than 2 C. Therefore, achieving the 1.5 C rise is at the ambitious end of the existing commitment. The Paris Agreement requires each country to define its own contributions to the efforts to restrict climate change. The contribution of each country is called a Nationally Determined Contribution (NDC). Each nation must ensure its targets become progressively more ambitious over time.
It’s important to note that the Paris Agreement has no legal enforceability and each country participates through consensus. If countries start to leave, the agreement could fall apart and leave the world with no solution to the problem of increasing global temperatures.
Can Blockchain Help?
Measurement and tracking are the core challenges in tackling climate change. This doesn’t just apply at the macro level necessary to verifying how nations are progressing in their efforts to reduce carbon emissions. Business and people also have to participate. In the words of management expert Peter Drucker: “What gets measured, gets managed.”
Blockchain provides a means of establishing a single point of truth between entities through the application of consensus methods. Real-world assets can become tokenized on the blockchain, including carbon credits or green energy. These assets are tradable, creating value and incentivizing climate change efforts within nations and enterprises.
In January 2018, the United Nations announced the formation of the Climate Chain Coalition. The announcement outlined the mission of the group in “advancing collaboration among members working on issues of common interest, and to help enhance the environmental integrity and results of DLT applications for climate.” The coalition now has more than one hundred members, including NGOs, consulting firms, and various blockchain companies and associations.
Blockchain Climate Change Groups
Given the UN efforts, it seems inevitable that blockchain has a role to play in the future of managing climate change. However, the UN initiative isn’t the only one. Several other blockchain climate change groups and projects are working to further the effort. Here are just a few.
Blockchain Climate Institute
The Blockchain Climate Institute is an international, non-profit, volunteer-led entity. It acts as a think-tank as well as an advocacy group for blockchain climate change initiatives. The mission statement of the Institute is “to raise awareness among the international climate change policy community of the tremendous potential of Blockchain technology to considerably enhance climate actions.”
It aims to achieve this mission in three areas:
- Addressing climate finance flows, namely helping to fill the funding gap between investment needed for climate change and the amount that countries have already committed to paying under the Paris agreement
- Increasing transparency in climate funding
- Helping developing countries access climate financing
There’s an impressive line-up of experts from the climate change and blockchain sectors sitting on the Institute’s advisory board. They include the former Director of Climate Change from the World Bank and a former MD of the Canadian Blockchain Research Institute (the professional body co-founded by Don and Alex Tapscott).
Blockchain for Climate Foundation
The Blockchain for Climate Foundation has a single, clear goal: put the Paris Agreement on the blockchain. It’s an ambitious project, involving each country joining a single blockchain ledger and transparently recording their own investments and contributions to climate change. If it’s pulled off, it will be an all-encompassing near-global blockchain climate change record.
Obviously, such a global ledger would be a powerful tool in measuring and managing the impact of climate-related initiatives. However, it would also represent an impressive demonstration of the potential for blockchain technology used internationally for good.
The Blockchain for Climate Foundation is based in Canada. As such, it’s starting with putting the Canadian National Carbon Account on the blockchain. This will work as a proof of concept, demonstrating to other countries what’s possible with blockchain climate change tools. The Foundation is also convening a working group of government representatives to help guide and develop the tool.
Climate Ledger Initiative
The Climate Ledger Initiative is another group dedicated to the research and development of blockchain climate change solutions. It’s stated mission is “to accelerate climate action in line with the Paris Climate Agreement and the Sustainable Development Goals (SDGs) through blockchain-based innovation applicable to climate change mitigation, adaptation, and finance.”
CleanTech21, a sustainable development foundation based in Zurich, is behind the Initiative. The Governments of Switzerland and Liechtenstein both provide funding to the Climate Ledger Initiative.
In December last year, the Initiative published a comprehensive paper detailing various ways in which blockchain climate change initiatives could help further the cause. These included using blockchain in carbon pricing and taxation as well as token-based crowdfunding for climate change initiatives. Another example is blockchain in renewable energy development.
Like the technology itself, blockchain climate change initiatives are still very much in their infancy. The fact that there is a multitude of research-based groups and think-tanks is reflective of this. At this early stage, many of them are working separately but towards the same goals.
As blockchain matures, and governments and enterprises gain trust in the new technology, it’s likely that many of these disparate groups will consolidate into broader and more powerful initiatives. When that happens, we will see the true potential of the impact of blockchain in reversing climate change.
Author: Sarah Rothrie