How Blockchain can help fight Climate Change?

Blockchain is a word that is widely understood as some sought of a digital payment mechanism. Because people tend to relate it with Bitcoin, they limit Blockchain potential to just money transfers. But Blockchain is way bigger than that and represents a technology in itself. Digital Currency usage, or for that matter, Bitcoin is one of the use cases of Blockchain, and climate change can be another use case.

The focus of this blog is to explain the use of the Blockchain for fighting against climate change. It will not help you to learn Blockchain as a subject. If you are reading this, then you probably have heard the buzzword blockchain and are willing to understand its use case alongside Climate Change.

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Blockchain is a system that keeps information safe. It is like programmed storage that encrypts the data and then stores it in a distributed fashion. For example, you want to send unalterable sensitive data to someone with acknowledgment, you can use Blockchain for this.

Letโ€™s say you want to track the usage of funds by the NGO where you have done some donation. Blockchain can play a vital role there.

Blockchain – Sample use case

In the real world, automobile manufacturing industries are already using Blockchain for their process optimization. We all know how stringent the safety standards of the car manufacturing industry are. Determined by a set of rules and regulations, any amendments can directly impact hundreds of parts from dozens of suppliers. That too on each level of the supply chain. Furthermore, beyond safety standards, there are environmental regulations, cybersecurity, recycling, and many more. Until now, the only way to keep track of the supply chain was through databases and paper trails. And both were alterable and hard to maintain. Keeping up with the compliance and documentation has also been inconvenient and time-consuming.

Auto-makers and their component suppliers never get fair visibility into the layers of component-level compliances. Anything changes at any level of the production can impact massively, even at a small hinge level. Respective teams, regulators, and consumers should get the intimation in a timely manner. Today, this isnโ€™t possible unless you use something like Blockchain. Today, Blockchain is powering Auto-Industry by keeping them ahead of stricter regulations, which often comes with shorter response timeframes.

Problem Statement

There is a definite need for transparency in the action plans on a global scale. While writing this blog, the 2021 United Nations Climate Change Conference is about to happen in Glasgowโ€”Scotland, also called COP26. World’s most powerful leaders like Narendra Modi, Xi Jin Ping, Joe Biden, Barack Obama, Bill Gates, and many others will be addressing this 3rd meeting after the Paris Agreement.

World Leaders who are looked upon in COP26 Conference for the climate change fight.

It’s the first time since COP21 that countries are committing to enhanced ambition for a climate mitigation plan. As per Paris Agreement, the parties would carry out a process to share their national pledges every 5 years. And the effective implementation of these policies and regulations would determine the face of this fight against climate change. Or in another word, the result of these regulations and policies will determine the fate of this planet.

To fight this climate emergency, we all need to come together for a joint global effort. And the bigger initiative that we needs to take are:

  • Global fund grants
  • Coordinated and well-informed implementations
  • Exchange of progress among countries
  • Knowledge sharing for faster impacts
  • Learning curve
  • Technology exchange, and many other things

And the major hurdle to running it efficiently and effectively is the corrupted system. Scandalous politicians and government officials misuse the funds against intended purpose. And many countries are struggling with this big issue.

Another pressing hurdle is that governments and institutions can alter the data, making the ground reality impossible to obtain.

Usage of Blockchain to combat climate change

So โ€” the greater question becomes, how to solve these problems? And Thatโ€™s where Blockchain comes out as an answer. Innately, Blockchain will guarantee the fidelity and security of a record and will generate trust. It creates an irreversible ledger of the information chain, which is impossible to alter. So, the idea is:

  1. First, safeguard the funds allocated to each country for the climate action effort. Then, ensure that the fund’s utilization is happening wisely through transparent and traceable mechanisms.
  2. Secondly, For the first time the world is stepping to take something so big together, mistakes and inconsistencies can happen. Recording each progress and activity into a Blockchain will bring transparency for data driven restructuring plans. This will help to assess the loophole in the current processes.
  3. The third is the technology and innovations exchange. Considering Blockchain is a digital system, startups will have enormous opportunities to power this campaign. By the replication of expertise and exchange of technology everyone can benefit in the channel.
  4. Fourth is the report card. With Blockchain, we can track the progress, which countries, businesses, and individuals can see towards their pledged plans. This will help fellow contributors to assist each other if one is falling back. It is very much needed, after all, it’s a combined global effort.
  5. Finally, Blockchain can give UNFCCC a chance to strengthen the governing policy with real data determining facts and figures. As they are responsible for tracking and reasoning things regarding this climate initiative.

Does the Blockchain electricity consumption a threat to Climate?

Blockchain isnโ€™t just a system thatโ€™s powering digital payments, it is much more than that. It can help us fight Climate Change more effectively and efficiently, but it does consume a lot of power.

Bitcoin uses more electricity per transaction than any other method known to mankind, itโ€™s not a great climate thing.
Bill Gates

But there is noise over the past few months on the electricity usage of bitcoin and other similar Blockchain networks. Pulling it into a larger conversation around sustainability, which is moreover negative. I do agree that this technology is resource hungry, and it needs an enormous amount of power/electricity and hardware components. But, when I weigh the advantages with its disadvantages, there are definite positive outcomes.

A single bitcoin transaction uses roughly 707.6 kilowatt-hours of electrical energyโ€“equivalent to the power consumed by an average U.S. household over 24 days, according to Digiconomist. On a yearly basis, bitcoin consumes more energy than all but 38 countries, falling in line with countries like Finland, Chile and Austria.

What I mean to say is that the energy consumption of Blockchain has become a challenge. Solving this problem would need Blockchain seeders to become more aware of this ideology. Frankly, we are still in the learning phase of climate emergency, and the blockchain hasn’t yet sized itself as well. So to solve this issue, the people running Blockchain should convert their power source from fossil to renewable. Like, switching to solar or buying servers from a green energy-powered city. By doing this, we can mitigate this issue and can concentrate on the benefits of Blockchain more. But indeed, it would take larger awareness and propaganda programs for this shift to happen.

We believe that cryptocurrency will eventually be powered completely by clean power, eliminating its carbon footprint and driving adoption of renewables globally.

Square CEO Jack Dorsey

Closing Note

The decentralized approach of Blockchain can provide both breadth and depth. And It can engage and enable everyone to participate in this fight. It allows us to track and report the reductions in greenhouse gas emissions across supply chains, manufacturing, distribution, and commodities.

The internet is much bigger than an email, and the rise of Blockchain is much more than decentralized money alone. The combination of Blockchain with oracles is leading to a new era of smart technologies. And these smart-tech can create an entirely new type of incentives for sustainable human consumptions. Innovations in Blockchain technologies are powerful enablers for the much-needed joint action to fight against climate change. And we can leverage it if we consider it by heart.

โ–บ DISCLAIMER โ—„

Information provided in the podcast is a general guide from a personal perspective and does not constitute legal or authoritative advice. The statistics and regulations referred to in the podcast are sourced from the public information bureau and are subject to change with time. It is the viewer’s responsibility to verify the currency of information.

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