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How
Blockchain Technology Could Boost
Climate Action
A Blockchain is a distributed
database that is continuously
updated and verified by its users.
Each added block of data is
“chained” and becomes part of a
growing list of records, under the
surveillance of network members.
This technology enables the transfer
of assets and the recording of
transactions through a secure
database.
“As countries, regions, cities and
businesses work to rapidly implement
the Paris Climate Change Agreement,
they need to make use of all
innovative and cutting-edge
technologies available. Blockchain
could contribute to greater
stakeholder involvement,
transparency and engagement and help
bring trust and further innovative
solutions in the fight against
climate change, leading to enhanced
climate actions,” said Alexandre
Gellert Paris, Associate Programme
Officer at the UNFCCC.
For climate action, Blockchain
technology could be used in the
following specific ways:
Improved carbon emission trading:
Blockchain could be used to improve
the system of carbon asset
transactions. For example, IBM and
Energy Blockchain Lab are currently
working together to develop a
Blockchain platform for trading
carbon assets in China. Recording
carbon assets on a public Blockchain
would also guarantee transparency
and ensure that transactions are
valid and settled automatically.
Facilitated clean energy trading:
The technology could also allow for
the development of platforms for
peer-to-peer renewable energy trade.
Consumers would be able to buy, sell
or exchange renewable energy with
each other, using tokens or tradable
digital assets representing a
certain quantity of energy
production.
Enhanced climate finance flows:
Blockchain technology could help
develop crowdfunding and
peer-to-peer financial transactions
in support of climate action, while
ensuring that financing is allocated
to projects in a transparent way.
Better tracking and reporting of
greenhouse gas (GHG) emissions
reduction and avoidance of double
counting:
The technology could provide more
transparency regarding GHG emissions
and make it easier to track and
report emission reductions, thereby
addressing possible double counting
issues. It could serve as a tool to
monitor the progress made in
implementing the Nationally
Determined Contributions, or “NDCs”
under the Paris Agreement, as well
as in company targets.
Advantages of Blockchain Technology
The first major application of
Blockchain technology was the
Bitcoin digital currency, launched
in 2009, allowing online payments to
be transferred directly, without an
intermediary. The currency is
meanwhile used by millions of people
for payments.
Blockchain, the underlying
technology operating the Bitcoin
should be separated from the
currency. It has many other
applications in inter-organizational
cooperation, including as an
efficient way to keep record of
transactions and manage data.
More Work Needed for Blockchain to
Fully Support Climate Action
Because of its distributed nature,
Blockchain could improve governance
and sustainability in support of
collective action aimed at tackling
climate change. As opposed to
centralized or decentralized
networks, Blockchain prevents
monopolistic control over the
system. The technology also records
transactions openly and permanently,
thus fostering transparency and
traceability. this is a welcome
development for regional economic
cooperation like the
northern region of Nigeria
popularly call "Arewa".
Research on ways to integrate
Blockchain into different sectors
related to sustainable development
is now expanding, and innovation at
the intersection of
Blockchain and
climate change is expected to
further develop in the coming years.
Blockchain was also the topic of key
sessions during the Innovate4Climate
2017 conference in Barcelona this
May, the most important gathering of
the private sector on climate change
organized by the World Bank Group
and others.
The United Nations Climate Change (UNFCCC)
secretariat recognizes the general
potential of Blockchain technology.
In particular, transparency,
cost-effectiveness and efficiency
advantages, which in turn may lead
to greater stakeholder integration
and enhanced creation of global
public goods are currently viewed as
the main potential benefits.
