Climate change and economic recovery in a post-COVID-19 world could be the starting point to create a more sustainable future. The world is currently investing most of its time and effort in tackling COVID-19 and the resulting economic hardships. Blockchain technology could be a key.
In this article, Cryptolydian is going to discuss how blockchain technology can solve the climate change issue.
The world recently experienced huge natural disasters. They included superstorms in the Caribbean and southern US, the Amazon fires in Brazil, and floods in Africa and Asia. Article 6.2 of the 2016 Paris Agreement on climate proposes the concept of Internationally Transferred Mitigation Outcomes (ITMOs) as the unit of cooperation and transfer of value of carbon impact. Its goal will be to create a system that connects all the carbon accounts of all countries around the world.
Meanwhile, Joseph Pallant, founder of the Blockchain for Climate Foundation (BfCF), has found a solution to support international climate change efforts.
“We want to support and accelerate this goal by building a smart contract protocol that tracks ITMOs leveraging the Ethereum technology stack and scales, to accommodate use by every country in the world. There will be enough data embedded in each of the tokens so the provenance and eligibility of each tonne of emission reductions is clear.”-Joseph Pallant. Founder – Blockchain for Climate Foundation
BfCF has chosen Canada to be the first country to hold a carbon account on the blockchain. This would permit any individual, at the government or citizen level, to verify and access information on emissions trade transactions.
Climate Action Summit
Since carbon reduction has become a global priority, the UN Secretary-General hosted the Climate Action Summit in New York in September 2019. The objective was to create a new social contract for the digital economy. This contract would demonstrate a leap in collective national political ambition and massive low-emission movements in the real economy.
In other words, this new social contract redefines the relationship between individuals in society and the institutions they have created to self-govern. It is called blockchain technology, which can be used to solve major environmental problems. If adopted globally, it can even help stop or reverse climate change.
To clarify, blockchain is the shared database technology that underlies Bitcoin and Ethereum and is particularly interesting for environmental causes. They make it possible to track and verify transactions and interactions without a centralised authority.
As a result, it can significantly increase transparency, efficiency, and accountability of environmental projects. It can also reduce transaction costs and increase efficiency. Most importantly, this kind of networks is difficult to take down or corrupt due to its distribution.
Blockchain Protects Environment
Regarding the environment, blockchain can have a positive impact in seven ways:
- Supply chain management: Transparently tracking products from origin to store shelf, reducing carbon footprint, and unsustainable practices.
- Recycling: Giving financial reward in the form of a cryptographic token in exchange for depositing recyclables like plastic containers.
- Energy: Natural disasters or poverty can cause power outages in many parts of the world. A peer-to-peer blockchain-based energy system would reduce the need to transmit electricity over long distances.
- Environmental treaties: Tracking real impacts and compliance of environmental treaties lead to decreased fraud and manipulation.
- Non-profits: Tracking where donations are going will decrease inefficiency and bureaucracy in charities.
- Carbon Tax: Calculating tax for products based on carbon footprint and creating a reputation system for companies based on emissions.
- Changing incentives: Aligning incentives with sustainable practices and creating incentives for people to act in sustainable way.
In conclusion, there are some major milestones for the transformation of supply chains with blockchain solutions. “CarbonX”, for instance, is one of these initiative against climate change. It provides a network platform for companies to easily and efficiently offset their carbon emissions and create demand for their carbon-neutral products and services.