How blockchain technology is transforming climate action

The November 2021 United Nations Climate Change Conference, known as COP26, in Glasgow, Scotland, called on the world to commit to reducing contributions to carbon emissions. achieving a net zero world in less than 30 years is causing many to turn to blockchain technology, buy carbon offsets and spark renewed interest in carbon capture.

The United Nations Environment Program (UNEP) has identified transparency, clean energy, carbon markets and climate finance as areas where blockchain technology can accelerate climate action. At the 2017 Paris Summit, the UN Climate Change Secretariat joined a group of multi-stakeholder organizations to set up an open global initiative, the Climate Chain Coalition, signaling its early support for blockchain for climate.

At Middle East and North Africa (MENA) Climate Week, UNEP, the International Association for the Advancement of Innovative Approaches to Global Challenges (IAAI GloCha) and the United Nations Economic and Social Commission for Western Asia brought together blockchain stakeholders in the MENA region to shape a common understanding of the technology's potential to support countries with climate action, which was followed by the Blockchain4Climate networking event. From these discussions I will shed light on how we use blockchain to address climate action.

Green Digital Asset Solutions

Although the digital asset industry has been criticized for its high energy consumption, such an accusation is misleading. It is essential to differentiate between cryptocurrencies and the underlying blockchain platforms that are energy efficient and support climate initiatives. Few climate initiatives take advantage of cryptocurrencies. Algorand has declared that its blockchain is completely carbon neutral† Kickstarter is building a crowdfunding platform on the Celo negative carbon blockchain platform; and SavePlanetEarth is setting up Carbon Credit Smart certified non-fungible tokens (NFTs) on Phantasma, a green blockchain for developers to build their decentralized applications. The game is on and the platforms are transitioning to more sustainable energy and consensus mechanisms. Polkadot has also been highlighted as a climate-friendly blockchain.

Related: Green 'Light': The EU's Approach to Balancing Green Crypto Securities With Regulatory Relevance

Renewed interest in voluntary carbon markets that report, sequester and profit from capture has Opened the door to green digital asset solutions, which can be tokenized and used as commodities in a market system, for example green utility tokens, a reward for reducing carbon emissions; green asset tokens, tokenized carbon credits or biodiversity offsets; green crypto, programmed only to spend on green products; and green security token offering issuance platforms designed to enable green shock proof reporting.

We are seeing a maturation and proliferation of such projects as people innovate for climate action, for example TreeCoin sells tokenized assets linked to eucalyptus trees and reinvests them in eucalyptus trees in Paraguay. Carbonland Trust also has a tokenized carbon credit for forest conservation, while the Cambridge Carbon Credit Center is searching buy carbon credits to finance nature-based solutions that preserve biodiversity. ClimateCoin incentivizes carbon offsetting by awarding tokens to people who plant trees or reduce CO2 emissions. Carbon Offsets To Alleviate Poverty supports projects that reward farmers who plant and maintain trees on underutilized portions of their land. Evercity is working with GloCha on a green chain solution towards COP28, the 28th session scheduled for November 6-17, 2023.

Related: UN COP26 climate change goals include emerging technologies and carbon taxes

Several projects are also focusing on tradable carbon credits. The Universal Protocol allows certified projects to convert greenhouse gas reductions into tradable carbon credits. First, NFT-based carbon credits give carbon credit issuers access to the blockchain and allow users to track, trade, and burn credits. Additionally, organizations such as Evercity and Blockchain Triangle are strong integrated platforms that guide and aggregate carbon credits and initiatives, linking them with investors and financial mechanisms such as digital green bonds through blockchain-powered platforms. The ability to include these voluntary market credits in national reporting under the Paris Agreement is also being addressed through initiatives such as Blockchain for the climate And it is bitmo and the Open Earth Foundation and its Nested Climate Accounting for the Paris Global Stocktake.

Smart grid management

Blockchain technology can help improve and manage smart grids in decentralized energy markets and enable reliable and transparent peer-to-peer energy trading. Powerledger allows consumers to buy, sell or trade excess renewable electricity directly with each other. Solstroem is focused on accelerating the energy transition in developing and emerging countries by providing geo-tagged, time-stamped, off-grid solar carbon micro-credits that individuals or businesses can purchase. UK Electron uses smart contracts on the Ethereum blockchain to develop a smart grid that constantly supplies power. Grid Singularity is a decentralized energy marketplace and energy data exchange platform. TransActive Grid is also a blockchain-based energy marketplace, but it focuses on local peer-to-peer trading of home-produced energy.

New technologies that significantly reduce manufacturing costs and the mass adoption of mobile phones in developing countries make it possible for solar panels to connect to the blockchain for consumers to benefit from distributed generation. Azuri Technologies, Zola Electric and Mobisol produce low-cost solar panel solutions for off-grid areas in rural Africa. This smart “pay as you go” system makes solar technology affordable at a fraction of the price of kerosene, allowing households to pay for solar panels, helping them move from rental to asset ownership. This can transform the lives of rural, off-grid citizens by making them the owners of cutting-edge technology, building a healthier and safer home environment, and supporting additional sustainability initiatives.

NFT and gamification

NFTs are becoming more and more leveraged for climate change, with initiatives ranging from awareness raising to fundraising; In addition, NFTs are used as an immutable record of carbon credits and impacts. SavePlanetEarth is launching certified carbon credit smart NFTs. First Carbon Corp. is developing NFT-based carbon credits, whose issuers will have access to the blockchain, allowing users to track, trade and burn credits so there is no double counting.

Related: Despite Bad Reputation, NFTs Can Be a Force for Good

Another use case for NFTs is DigitalArt4Climate, a multi-stakeholder partnership initiative that uses blockchain technology to turn art into digital assets, or NFTs, that can be collected and traded, unlocking the potential for resource mobilization, participation of youth and climate empowerment.

DCarbon founder Adi K. Mishra points out that you can also use the game to incentivize widespread positive climate action. GreenApes implements gamification to help people understand their carbon footprint, and we can expect to see more games that people can play to win for climate action.

Measurement and reporting

Blockchain technology will be a fundamental tool for measurement and reporting in combination with artificial intelligence and the Internet of Things (IoT) with large-scale interconnected databases, for example, weather, water, land, to develop actions for desertification and deforestation and predict meteorological events. and trends Blockchain smart contracts offer a zero-cost, tamper-proof mechanism to connect positive (or negative) environmental changes or outcomes with financial incentives/disincentives, for example, a measurable reduction in CO2 as measured by an IoT-based network of atmospheric monitoring sensors placed around a village can "trigger" the release of crypto to the village based on the observed measurement in the environment.

DAO for climate action

Blockchain technology can create new digital economies that economically unite and align people around a common purpose. It is possible to develop economies that value climate action. IAAI GloCha presented its Citizens United organization for climate empowerment plans at MENA Climate Week, which will be a flagship initiative at COP28.

I will provide a deeper dive into each of these opportunities in the coming weeks.

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should do their own research when making a decision.

The views, thoughts, and opinions expressed here are those of the author alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.