Can Blockchain save the planet? The role of distributed ledger technology on the road to Net Zero
The latest IPCC report into climate change is yet another reiteration of the urgency of humanity’s dire need to reduce greenhouse gases emissions and invest in sustainable technologies, processes, and infrastructures.
Technologies such as reforesting, rewilding, and direct air capture have showed promise. Governments around the world have also set the target of nations achieving Net Zero, where no more harmful emissions are produced than the amount reabsorbed (most likely through a combination of natural processes such as photosynthesis, and man-made solutions such as carbon capture devices).
Blockchain technology does not have the best reputation when it comes to the environment. Cryptocurrency, the most well-known application of blockchain, has caused a boom in highly energy-intensive activities such as bitcoin mining and producing NFTs. However, blockchain is a technology with many other potential uses and could be a useful tool in achieving Net Zero.
To have a shot at achieving Net Zero, let alone the ideal “carbon-negative”, we cannot rely solely on technologies—emissions must also be reduced as quickly and as much as possible. This means that public and private organisations of all sizes must review every single process and appliance used to carry out operations and replace them with sustainable ones.
This includes not only internal processes, but those of any suppliers or partner organisations. Every aspect of an organisation’s effect on the environment must be audited. Accessing the vast amount of data that this entails is not only practically difficult, but also risks violating data protection regulations.
Even with technologies and infrastructure that would solve these particular challenges, achieving Net Zero is a difficult task. Without these technologies, however, it may be an impossible one.
Although the terms are often used interchangeably, blockchain technology is just one type of DLT—or Distributed Ledger Technology. DLT describes technologies that store data in decentralised ledgers, with access managed by administrators and/or programmed authorisation rules. Blockchain, and its continually verified encrypted data blocks, is a type of DLT, as is the newer DAG (Directed Acrylic Graphs).
The applications of DLT for secure and reliable data sharing are established, with the technology enabling decentralised yet secure data storage. This could minimise the security and logistical challenges of sharing emissions data between organisations, with immutable data accessible for every step of a supply chain and by any organisation that needs it.
With data stored using DLT platforms, transparency could be increased, organisations empowered to make informed decisions on their suppliers and partners, and unscrupulous actors prevented from falsifying data. For example, wealthier nations could be prevented from excluding overseas emissions (such as those from agriculture or manufacturing outsourced to poorer countries) from their national recorded emissions.
Carbon offsetting, one of the procedures that has been explored to help organisations reach Net Zero, has been plagued by practical issues. “Double-counting”—when multiple people or organisations claim ownership of an offset, causing it to be re-used without more carbon-reducing measures being taken—is a particular problem.
Double-counting could become much more difficult with data stored using DLT. Tokens could be created to represent carbon offsets and tracked reliably in a tamper-proof ledger. In fact, a decentralised ledger of carbon credits has been trialled by the Partnership on Transparency in the Paris Agreement.
It is not just accountability and transparency that DLT could provide. Reliable ledgers could enable more efficient and sustainable resource management in energy and water systems. Especially when combined with smart sensors, waste could be curbed and energy use tracked and monitored in real-time across large-scale infrastructures. The potential implications for disaster relief are also significant, with decentralised shared information enabling faster and more targeted responses.
No technology is likely to reverse climate change alone. As well as tracking emissions, they must be hugely reduced.
DLT is one of numerous tools at our disposal. However, we must have the collective will and organisation to use it the right way. Even decentralised technologies require human input, and those granted access must be trained, knowledgeable, and willing to put the planet above any other short-term interests.
The international collaboration required to save the planet will take immense effort. This is no easy task, but technologies like DLT could make this collaboration more informed, practical, and focused.
