How blockchain technology is transforming climate action
The November 2021 United Nations Climate Change Conference, known as COP26, in Glasgow, Scotland, urged the world to commit to reducing contributions to carbon emissions. Achieve a net zero world in less than 30 years has many people turning to blockchain technology, buying carbon offsets, and sparking renewed interest in carbon capture.
The United Nations Environment Program (UNEP) has identified transparency, clean energy, carbon markets and climate finance as areas where blockchain technology can accelerate climate action. At the 2017 Paris Summit, the United Nations Climate Change Secretariat joined a group of multi-stakeholder organizations to implement an open global initiative, the Climate Chain Coalition, signaling its early support for blockchain for climate.
During Middle East and North Africa (MENA) Climate Week, UNEP, the International Association for Promoting Innovative Approaches to Global Challenges (IAAI GloCha) and the United Nations Economic and Social Commission United Nations for West Asia brought together blockchain stakeholders in the MENA region to shape a common understanding of the technology’s potential to support countries in climate action, which was followed by the Blockchain4Climate networking event . From these discussions, I will shed some light on how we are using blockchain to fight climate action.
Green digital asset solutions
Although the digital asset industry has been criticized for its high energy consumption, such an accusation is misleading. It is essential to differentiate between cryptocurrencies and the underlying blockchain platforms that are energy efficient and underpin climate initiatives. Few climate initiatives leverage cryptocurrencies. Algorand has declared its blockchain to be entirely carbon neutral; Kickstarter is building a crowdfunding platform on the carbon-negative blockchain platform Celo; and SavePlanetEarth is setting up Carbon Credit Smart Certified Non-Fungible Tokens (NFTs) on Phantasma, a green blockchain for developers to build their decentralized applications. The game is on and platforms are transitioning to more sustainable energy and consensus mechanics. Polkadot has also been touted as a climate-friendly blockchain.
Related: Green light: EU approach to crypto balances green values with regulatory relevance
The renewed interest in carbon reporting, sequestration and voluntary carbon markets open the door to green digital asset solutions, which can be tokenized and used as commodities in a market system – for example, green utility tokens, a reward for reducing carbon emissions; green asset tokens, tokenized carbon credits or biodiversity offsets; green crypto, programmed only to be spent on green products; and green security token issuance platforms designed to enable green impact proof reporting.
We are seeing a maturation and proliferation of such projects as people innovate for climate action – for example, TreeCoin sells eucalyptus-related token assets and reinvests them in eucalyptus trees in Paraguay. Carbonland Trust has also possesses a symbolic carbon credit for forest conservation, while the Cambridge Center for Carbon Credits is looking at buy carbon credits to finance nature-based solutions that preserve biodiversity. ClimateCoin encourages carbon offsetting by awarding tokens to people who plant trees or reduce CO2 emissions. Carbon Offsets for Poverty Alleviation supports projects that reward farmers who plant and maintain trees on underutilized portions of their land. Evercity is working with GloCha on a green chain solution ahead of COP28, the 28th session scheduled for November 6-17, 2023.
Related: UN COP26 climate change targets include emerging technologies and carbon taxes
Several projects also focus on tradable carbon credits. The universal protocol allows certified projects to convert greenhouse gas reductions into tradable carbon credits. First, NFT-based carbon credits allow carbon credit issuers to access the blockchain and allow users to track, trade, and burn credits. Additionally, organizations such as Evercity and Blockchain Triangle are robust integrated platforms that guide and aggregate initiatives and carbon credits, connecting them to investors and financial mechanisms, such as digital green bonds through blockchain-based platforms. . The ability to include these voluntary market credits in national reporting under the Paris Agreement is also being addressed through initiatives such as Blockchain for the climate and his bitmo platform and the Open Earth Foundation and its Nested Climate Accounting for the Paris Global Stocktake.
Smart Grid Management
Blockchain technology can help improve and manage smart grids in decentralized energy markets and enable reliable and transparent energy exchange between peers. Powerledger allows consumers to buy, sell or trade surplus renewable electricity directly. Solstroem focuses on accelerating the energy transition in developing and emerging countries, by providing off-grid, geotagged and timestamped solar micro-carbon credits that individuals or businesses can purchase. Electron from the UK uses smart contracts on the Ethereum blockchain to develop a smart grid that will provide energy on a constant basis. Grid Singularity is a decentralized energy marketplace and energy data exchange platform. TransActive Grid is also a blockchain-based energy market, but it focuses on local peer-to-peer trading of home-generated energy.
New technologies that drastically reduce manufacturing costs and the mass adoption of mobile phones in developing countries are making it possible to connect solar panels to the blockchain to allow consumers to benefit from distributed generation. Azuri Technologies, Zola Electric and Mobisol produce low-cost solar panel solutions for off-grid areas in rural Africa. This smart “pay as you go” system makes solar technology affordable at a fraction of the price of kerosene, allowing households to pay for solar panels, helping them transition from renting to owning an asset. It can transform the lives of off-grid rural citizens, empowering them with advanced technologies, creating a healthier and safer home environment, and supporting additional sustainability initiatives.
NFT and gamification
NFTs are increasingly leveraged for climate change, with initiatives ranging from raising awareness to fundraising; moreover, NFTs are used as an immutable record for impact and carbon credits. SavePlanetEarth launches Carbon Credit certified Smart NFTs. First Carbon Corp. is development NFT-based carbon credits, whose issuers will have access to the blockchain, allowing users to track, trade and burn credits so there is no double counting.
Related: Despite the bad reputation, NFTs can be a force for good
Another NFT use case is DigitalArt4Climate, a multi-stakeholder partnership initiative that uses blockchain technology to turn art into digital assets or NFTs, which can be collected and traded, unlocking the potential for resource mobilization, engagement youth and climate empowerment.
DCarbon founder Adi K. Mishra points out that you can also use gameplay to inspire widespread positive climate action. GreenApes is rolling out gamification to help people understand their carbon footprint, and we can expect to see more games where people can play to earn money for climate action.
Measure and report
Blockchain technology will be an essential measurement and reporting tool in combination with artificial intelligence and the Internet of Things (IoT) with large-scale interconnected databases – eg climate, water, land – to develop actions against desertification and deforestation and forecast weather events and trends. Blockchain smart contracts offer a tamper-proof, zero-cost mechanism to link positive (or negative) environmental changes or outcomes to financial incentives/disincentives – e.g. measurable CO2 reduction measured by an IoT-based network Atmosphere monitoring sensors placed around a village can “trigger” the release of crypto to the village based on the measurement observed in the environment.
DAO for climate action
Blockchain technology can create new digital economies that economically unite and align people around a common goal. It is possible to develop economies that value climate action. IAAI GloCha showcased its organization United Citizens for Climate Empowerment Plans during MENA Climate Week, which will be a flagship initiative of COP28.
I will delve into each of these opportunities in the coming weeks.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
The views, thoughts and opinions expressed herein are those of the author alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.
Jane Thomasson is the chairman of Kasei Holdings, an investment company specializing in the digital asset ecosystem. She holds a doctorate. from the University of Queensland and has held several positions with the British Blockchain & Frontier Technologies Association, Kerala Blockchain Academy, Africa Blockchain Center, UCL Center for Blockchain Technologies, Frontiers in Blockchain and Fintech Diversity Radar. She has written several books and articles on blockchain technology. She has been featured in the Crypto Curry Club’s 101 Women in Blockchain, Decade of Women Collaboratory’s Top 10 Women in the Digital Frontier, Lattice80’s Top 100 Fintech for SDG Influencers, and Lattice80’s Top 50 Global Thought Leaders and Influencers. Thinkers360 on the blockchain.