How can blockchain technology solve the environmental crisis?, CIO News, ET CIO
In recent years, governments and organizations around the world have focused on using various technological tools to mitigate the challenges of climate change and biodiversity loss. One of the tools that could be very effective in dealing with the climate crisis is block chain.
From a technological perspective, the blockchain is a digitally distributed, decentralized ledger that tracks and verifies transactions. Even though blockchain is well known for the technology behind cryptocurrencies such as Ethereum and Bitcoinenvironmental researchers are now finding its use in solving the climate crisis, ranging from tracking the durability of products to monitoring pollution.
Let’s explore how blockchain technology can help tackle the environmental crisis.
Guide for investors
Investments that involve large international sustainability projects have become very complicated, leading to delays and backlogs. Blockchain-enabled processes and platforms can handle transactions very effectively and efficiently. For this reason, sustainability and other climate-related initiatives are desirable for investors. Blockchain-enabled processes and platforms can help manage stakeholders working in different capacities. This will help increase efficiency, reduce transactions and make climate-related sustainable development highly beneficial for private investment.
According to a report from United Nations Environment Program (UNEP), blockchain distributed ledger technology can bring significant improvements by enabling investors, renewable energy project developers and buyers to collaborate on a common platform with established global standards for due diligence in terms of compliance.
South Africa-based renewable energy startup Sun Exchange enables anyone with an internet connection to buy solar panels online and rent them to hospitals, schools, businesses and others businesses in Africa. Sun Exchange uses the Bitcoin blockchain to make cross-border payments. This eliminates any potential intermediary between investors and beneficiaries. Thanks to solar panels from Sun Exchange, companies in South Africa have reduced their energy costs by almost 30%.
Power Ledger, an Australian technology company, has started exploring the impact of blockchain. The organization has set up a pilot project in India Uttar Pradesh. They allowed owners of homes with solar panels on their roofs to sell electricity to others on the grid. This involves setting prices in real time and implementing transactions through the blockchain. These systems can help increase the deployment of renewable energy.
Blockchain technology can also be used for sustainable and eco-friendly supply chain practices. Technology can track manufacturer products and help prevent inefficiency and waste by making supply chains transparent. Blockchain can also help consumers better understand how products were made and shipped. This will allow them to make ecological choices.
Foodtrax is a Blockchain-based dApp that plans to track food from origin to shelf to eradicate food waste due to storage and mishandling. Through their blockchain-based dApp, Food Trax has interconnected data temperature loggers and measurement and monitoring equipment, focusing on developing a flexible solution that covers all steps related to the temperature chain. procurement with transparency.
One area of environmental sustainability where blockchain can have a significant impact is recycling. By implementing a recycling program on the blockchain, organizations can offer financial incentives to individuals in the form of a crypto token. This could be in exchange for depositing recyclable materials such as plastic cans, bottles, containers, etc. This tracks essential data such as cost, volume, and profit and also helps assess the environmental impact of an individual or company participating in the program.
Many organizations are already working on such blockchain-based recycling programs. For example, an organization called The Plastic Bank is leveraging Blockchain and IBM cloud technologies to create an app that can help monetize plastic from the oceans. Through its sustainability project, Plastic Bank turns plastic into currency by successfully setting up collection centers in Third World countries. This allows people to deposit used plastic in exchange for different incentives such as cash benefits, phone top-up, etc. The organization is currently working on a blockchain-powered application that allows users to exchange plastic for crypto tokens.
A decentralized blockchain-based application (dApp) called RecycleToCoin (RTC) offers users a system of rewards and incentives for recycling aluminum, plastic and steel cans. By partnering with global offset and reward partners and using app-based collection points, RTC inspires people to recycle more and get rewarded for it.
Although blockchain technology has several advantages when it comes to solving the environmental crisis, there are many pitfalls associated with it. A significant amount of electricity and computing power is required to process certain transactions on bitcoin and Ethereum blockchains. This is a critical challenge in many countries where energy can be prohibitively expensive.
There is also a need for regulatory frameworks that will be essential to address the high cost of processing power. Electricity tariffs are expected to change, so energy consumers are very likely to participate in trading excess energy through blockchain platforms.
Digital Infrastructure Key
It is clear from the report that Blockchain technology can certainly help solve the environmental crisis and improve sustainability in various ways. However, to foster the penetration of emerging technologies such as blockchain, the digital infrastructure will need to be improved. As blockchain and related digital technologies develop rapidly, policymakers need to adjust regulations that can help design future energy systems and mitigate environmental risks.