Blockchain technology: a fundamental tool in the battle against global warming
Despite the global boost for renewable energy, electric vehicles and the reduction of carbon dioxide emissions, the threats of global warming and climate change remain extremely palpable in 2019. The Intergovernmental Panel on Climate Change (IPCC) Dear that global temperatures could rise at least two degrees over the next century, which has the potential to cause adverse climatic changes and displace large areas of currently inhabited coastal land.
In the following article, we explore some ways blockchain is helping efforts against climate change and greenhouse gas emissions.
A total of 196 countries signed the Paris Agreement in 2016, each agreed to combat climate change by encouraging climate-resistant development and reducing greenhouse gas emissions. However, the Paris Agreement has attracted a good deal of criticism for its lack of application and effectiveness. In 2017, one year after the agreement was signed, the British scientific journal Nature reported that any of the major industrialized nations had met their promised carbon reduction goals or Nationally determined contributions (NDC).
Since the fight against climate change is an extremely urgent process, the United Nations and other organizations are increasingly considering the use of cutting-edge technologies such as blockchain and artificial intelligence-based systems to hold nations accountable.
The United Nations Secretariat for Climate Change (UNFCCC) recognizes the overall potential of Blockchain technology, said a statement on the UNFCCC website. “In particular, the advantages of transparency, profitability and efficiency, which in turn can lead to greater integration of stakeholders and better creation of global public goods, are currently considered the main potential benefits. The secretariat, therefore, specifically supports initiatives that lead to innovation at the intersection of Blockchain and the climate. ”
The Blockchain for Climate Foundation, meanwhile, defenders The use of blockchain technology due to its unique ability to improve transparency, accountability and traceability of any item, from products in a supply chain to greenhouse gas emissions.
A decentralized way to trade carbon credits
Another way blockchain could prevent climate change is by offering a robust implementation method for the concept of carbon credits . Typically, ownership of a carbon credit gives the holder the right to emit one ton of carbon dioxide. Since larger companies are forced to purchase unused carbon credits from smaller ones, companies are incentivized to release less pollutants and greenhouse gases into the atmosphere.
However, governments around the world have struggled to create a platform that is able to facilitate the trade of credits between companies and even entire countries. The latter is perhaps the most significant since industrialized nations like China and South Africa may require more carbon credits than one that is predominantly agricultural.
To fulfill this vision, IBM has associated with Energy Blockchain Lab to build a blockchain platform for carbon asset trading in China. In March 2017, the two announced a blockchain-based green asset management platform, which would serve as a marketplace for carbon assets, including credits. By leveraging the technology’s strengths, carbon credits can be traced, validated, and traded in a peer-to-peer manner, without the need for intermediaries or centralization.
Enabling international green activism
On a smaller scale, blockchain technology can be used to improve collective financing and collaborative aspects of climate change related activism. Since blockchains are essentially distributed accounting books that can be read by all participants, they offer an unprecedented level of traceability of financial transactions. Therefore, taxpayers can confirm that their financial donations are being used effectively and for the correct purposes.
Nonprofit organizations also lose a huge amount of money to intermediaries and network fees at every step of a financial transaction. Credit card providers such as Visa and MasterCard charge between 1% and 3%, while PayPal can charge fees of up to 5% if they are foreign currencies. Blockchain technology thrives in the absence of such intermediaries and, therefore, can be a valuable resource in the battle against global warming.
According to James Giancotti, CEO of Alluva , “As the world becomes increasingly aware of the adverse effects of climate change, we must explore all possible ways to control emissions and pollutants. In the coming years, blockchain will undoubtedly prove to be instrumental in the joint effort against global warming, mainly because it is in a unique position to improve transparency, reduce costs and enable new trading methods. ”
Blockchain technology has already affected several sectors, including finance, the supply chain, transportation and entertainment. Meanwhile, complementary technologies, such as smart contracts and decentralized applications, have begun to expand the functionality of traditional web applications. Alluva For example, it is leveraging blockchain to build the world's largest analyst platform by incentivizing accurate price predictions of various assets. As for the energy sector and carbon emissions, time will reveal the different ways in which these sectors can also benefit from technology in a similar way.