The meteoric rise of Blockchain technology and Cryptocurrencies have pushed these innovative sectors into the limelight in recent years. With the global drive for a greener future, questions have been asked of the environmental implications of the technology.
Technology and climate haven’t traditionally gone well together. From the industrial revolution that changed the planet forever to modern devices that constantly consume energy and add to the mountains of electronic waste, every step we put forward into the future seems to put the Earth in greater jeopardy. However, the 4th Industrial Revolution with Blockchain at its heart is aiming to alter this trend.
Conscious blockchain paving the way
The relationship between Blockchain and the environment is complicated to say the least. The environmental impact of the sector has not yet been studied and established properly. Research has purported energy consumption of Bitcoin mining as contributing towards too much carbon emissions, potentially reaching a level that might interfere with national climate change mitigation obligations. Cryptoticker has also reported previously on Bitcoin Mining companies like Bitmain making profits in excess of $1 Billion.
While others like Jonathan Koomey, a Stanford lecturer who correctly illustrated how concerns over the early internet’s energy usage were dramatically unfounded, thinks researchers are getting it wrong. Koomey told NBC News,
“For two decades, people have been eager to overestimate electricity use by computing. My concern is that we simply don’t have adequate data to come to the strong conclusions that he’s coming to.”
While the debate about energy consumption and emissions rages on, many see blockchain as a way to accelerate the shift towards a low carbon worldwide economy down the line by opening up traditionally centralized carbon markets to a wider variety of players.
Drafting legislative agreements and compliance mechanisms to slash emissions and lend support to sustainability and efficiency projects constitute a major part of today’s work related to climate change and carbon output. The Climate Change Coalition (CCC) designed to study and research how blockchain can help combat climate change was announced by the United Nations in January.
CCC members will work on distributed ledger technologies and carry out pilot projects to test out use cases. In the past the Paris Agreement which has come under immense criticism in recent months, has been the topic for a large amount of debate and discussion inside of the UN.
Article 6.2 of the agreement puts forward the Internationally Transferred Mitigation Outcomes (IMTOs), a proposal for a unit carbon impact transfer value. The IMTO aims to craft a system that links every nation’s carbon accounts together. Startups like the Blockchain for Climate Foundation (BFC) in Canada, are looking to use blockchain to build a tool that could achieve this novel idea.
Joseph Pallant the founder of BFC says his team’s goal is to, “support and accelerate this goal,” to track IMTOs via smart contracts using Ethereum. He says the amount of data a single token holds makes it clear to anyone the “provenance and eligibility of each tonne of emissions reduction.” BFC is also working on a “Unique Fungible Tokens” which will allow the authenticity of carbon credits to be validated.
Low Carbon Future
The Energy Web Foundation’s efforts to identify and roll out blockchain energy solutions, were joined by 10 major utility companies. Veridium teamed up with IBM to carry out the idea of tokenizing carbon offset credits using Stellar Blockchain. Veridium Foundation executive director Jim Procanik thinks blockchain is the “perfect background” towards a more liquid marketplace especially since buying traditional carbon credits is often a lengthy process.
Stellar is also being used by another company called Poseidon to lower entry barriers into the carbon credit market. Poseidon recently teamed up with Ben & Jerry’s for a project that cuts carbon credits into microtransactions, allowing ice cream connoisseurs in London to offset their carbon emissions in real time. The project has reportedly protected more than 4,000 trees so far.
Blockchain will hopefully play a vital role as the backbone for a world in which carbon emissions and credits can be tracked transparently and reliably. Retailers will be able to sell a product and take into account the carbon impact it creates at the same time. Governments will be able to measure, track and trade emissions transparently. And crucially consumers can understand the environmental impact of the product they’re buying and with millions of micro-transactions scaling up to make a huge collective impact.
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