One of the greatest technological advances known to mankind is the invention of electricity. Today, just about everything we do requires electricity. But, producing the electricity that helps us live better lives, can be disastrous for the environment. Most of our electricity is generated from non-renewable sources that pollute our air and water. As the demand for electricity increases, the damage to our planet also increases. Blockchain can be used to solve the major environmental problems we are facing today on our planet. If adopted globally, it can even help stop or reverse climate change.
It was daunting to watch “Before the Flood” yesterday. Global warming and the actions we need to take is something few people actually understand and most politicians are too afraid to address, because of its unpopular ramifications.
According to the world’s leading scientists, politicians and economists, we only have 12 years to reduce our current carbon emissions by at least 45%, otherwise we are likely to cause a catastrophe called Hothouse Earth. By the year 2050, a runaway state of climate change will result in the loss of most of today’s species, regular meteorological disasters, the collapse of vulnerable economies, widespread conflict and hundreds of millions of climate refugees.
Despite the success of the Paris Agreement, signed by most of the world’s countries in 2015, the US has since pulled back and the actions needed to contain global warming are too slow. In fact year-on-year emissions continue to rise.
In the absence of US leadership, we’ve seen other countries step up. China, Canada and the EU announced their own climate vision. Twenty countries, including the UK and Canada, agreed to quit coal. For Ursula von der Leyen, the new EU Commission President, climate is going to be her signature issue. She plans a 55% reduction in CO2 emissions by 2030. Seven countries, including Germany, India, Norway and China, are soon saying goodbye to fossil fuel-based cars.
The 7.7 billion people consume products and services that emit CO2. A 2013 study found that the richest 10% contributed around 50% of global fossil fuel emissions. According to the Warwick University, the average UK resident’s carbon footprint in 2005 was 10 tonnes. In 2012, the rich urban Chinese citizens had carbon footprints of 6.4 tonnes, compared to the rural citizens and the poor urban citizens who had footprints of 0.5-1.6 tonnes of carbon.
If we do not come up with solutions now, we just might be too late. According to some reports we only have a window of 18 months, before the point of no return.
Blockchain and smart contracts have the potential to disrupt the entire green marketplace, by encouraging people to replace products they consume for more sustainable alternatives, incentivizing recycling, tracking the carbon footprint of products and applying taxes, and optimizing energy distribution.
Blockchain-based solutions are providing, for the first time, full transparency and traceability within the supply chain. Providing such transparency creates an opportunity to optimize supply and demand management, build resilience and ultimately enable more sustainable production, logistics and consumer choice. In agriculture, blockchain has been used to manage and authenticate harvesting of resources to ensure sustainable practices. For example, the Instituto BVRio has developed an online trading platform it has termed a “Responsible Timber Exchange” to increase efficiency, transparency and reduce fraud and corruption in timber trading.
Electric power systems around the world are rapidly changing. For over a century, these systems have relied largely on centralized, fossil fuel plants to generate electricity and sprawling grids to deliver it to end users. Blockchain can replace today’s centralized power system with decentralized energy trading, optimizing unused surplus, by reducing the need for energy storage and delivering it when it’s needed. In 2017, several startups raised over $300 million to apply blockchain to the energy sector in different ways: Transactive Grid, SunContract, EcoChain and many others.
People produce more waste than our planet can withstand, which has led to widespread pollution of air, water, and land. In the United States alone, individuals produce on average 4.5 pounds of solid waste per person per day, and around 55% of that waste is consumer or residential trash. Recycling is inefficient because people are not incentivized to recycle. A recycling program on the blockchain could encourage participation by rewarding people with a token for depositing recyclables like plastic containers, cans, or bottles. Plastic Bank is a blockchain platform and digital currency that incentivizes recyclers for the collection of plastic waste before it enters the ocean.
Global warming is expected to account for about 20% of the global increase in water scarcity this century. It is predicted that global warming will alter precipitation patterns around the world, melt mountain glaciers, and worsen the extremes of droughts and floods. Blockchain could fundamentally change the way in which natural resources are valued, incentivizing individuals, companies and governments from wasting scarce resources. Imagine an area with limited water supply. People could be earn tokens when they conserved water. These tokens could be used to access another resource or exchanged for fiat currency. Over time, incentives like this could cause widespread change in people’s attitude and behavior, when it comes to protecting and conserving natural resources.
A carbon tax is a fee imposed on the burning of carbon-based fuels. A carbon tax is a way to have users of carbon fuels pay for the climate damage caused by releasing carbon dioxide into the atmosphere. Tracking the carbon footprint of each product using the blockchain would protect this data from tampering, and it can be used to determine the amount of carbon tax to be charged on at the point of sale. If set high enough, it would make products with large carbon footprint more expensive, motivating individuals and companies to buy and produce clean energy products.
Until about a year ago, hardly anyone in climate science was talking about blockchain. Blockchain has the potential to change everything in the fight against climate change. Firstly, all the countries that singed the Paris Agreement, need to establish some transparency about their carbon emissions and record everything on a public, open source blockchain protocol. The Blockchain for Climate Foundation is working to create a system exactly like this. And secondly, individuals, private and public organizations need to understand their carbon impact and how to reduce it. But to really tackle this climate emergency, the world needs to do a lot more than just offset emissions. While saving the environment could be blockchain’s greatest achievement, the real solution needs to come from each of us.
Ilias Louis Hatzis is the Founder & CEO at Mercato Blockchain Corporation AG. He writes the Blockchain Weekly Front Page each Monday and has no positions or commercial relationships with the companies or people mentioned and is not receiving compensation for this post.
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