Can the blockchain track climate change action?
The mandate for climate change has been via a global consensus but there are still key parts of the puzzle that are missing. How can we ensure that climate change action is tracked and policies as well as data is transparently attributed?
Source: VERIDOC GLOBAL
It is here that the blockchain espouses center-stage: Blockchain is a emerging technology that has been gaining traction in the last few years, with companies from a wide range of sectors adopting it. Blockchain is a digital decentralised database that allows for a safe and seamless movement of data. Blockchain technology is frequently connected with the banking industry due to its inherent security feature, but the technology offers a variety of additional applications that have yet to be fully realised. Environmental derivatives is one such area where blockchain and its capabilities may be utilised to modernise the industry. The blockchain can track climate change action and enable SDGs to garner the momentum they need.
The key question is, can the blockchain be a force to be reckoned with when it comes to climate change action?
Insights from Entrepreneur.com hold some answers.
Policies for climate action
Ensure that climate data is appropriately and publicly acknowledged is the most crucial basis for creating robust climate action programmes and policies. This is where blockchain technology may assist. Its capacity to collect and exchange data in a secure manner suggests that it has the potential to have a substantial impact on how climate change is tackled.
The Climate Ledger Iintiative (CLI) conducted a poll of its members to determine which industries had the most potential for using blockchain for climate action. Renewable energy, clean energy, and supply chain management were recognised as the most underserved emphasis areas by survey respondents. Land use, forestry, agriculture, and food were also listed.
[box type=”info” align=”” class=”” width=””]The blockchain can impact the global tapestry for climate action by ensuring better worldwide governance and cooperation. The attributes of the blockchain such as its decentralized tamper-proof nature and immutability build a secure platform for accountability and transparency in this regard.[/box]
Consumers and society as a whole have grown through time to become more climate sensitive about their purchases, ranging from FMCG to cosmetic items to food basics, with an increased attention on product specifics such as ingredient lists, ingredient source data, animal testing, and so on.
Sustainable items are now preferred by consumers over non-sustainable alternatives.
Building Sustainable momentum
Despite the fact that governments all over the globe have promised incentives for adopting sustainable practises, the reality is quite different, and the actual incentives are not encouraging. This is something that blockchain has the capacity to alter. It can assist in the development of a structured incentive scheme that governments can use to incentivise firms that support climate efforts such as trash reduction and recycling programmes, among other things. The capacity of blockchain to collect data such as energy use and then tokenize them might enable businesses receive incentives for their climate efforts. This will motivate businesses to increasingly adopt climate practices and contribute to global climate goals.
Tracking green funding
Smart contracts on the blockchain can be used to incentivize governments throughout the world to deposit their climate pledges. As a result, there will be more enforcement and fewer bogus commitments. If a nation fails to reach its carbon offset targets, its deposit may be kept or distributed to countries who have.
In this way, the blockchain can enable the better management of sustainable initiatives. It can allow stakeholders to monitor green initiatives by tracking and tracing critical information. Unless green initiatives gather momentum, climate change cannot be tackled at an expedited pace. After all, we are in a race against time and the blockchain can be a key player in ensuring our long-term survival via building climate action transparency.
Disclaimer: The views expressed in this article are those of the author and do not necessarily reflect the views of the Economic Times – ET Edge Insights, its management, or its members.