Blockchain, the underlying technology for cryptocurrencies such as Bitcoin, can be a powerful tool that can significantly improve the transparency, accountability and traceability of greenhouse gas emissions, which cause climate change. It will help provide more accurate, reliable, standardized, and readily available data on carbon emissions or carbon footprint.
Carbon footprint is the amount of greenhouse gases, primarily carbon dioxide or CO2, released into the atmosphere by a particular human activity. Fossil fuel use is the primary source of CO2, which trap heat in the atmosphere and cause global warming. Organizations around the world are committing and striving hard to mitigate their carbon footprint.
A blockchain-based solution will analyze climate risks associated with asset valuations, and help organizations better assess and employ systems to offset their emissions. It will integrate an organizations existing systems with external data sources to establish a verifiable trail of emissions and offsets recorded on a blockchain.
The use of blockchain technology will provide a trusted and transparent system to measure, account for, and report on greenhouse gas emissions data in order to help organizations to meet environmental, social and corporate governance (ESG) targets.
Blockchains technology’s smart contracts can be used to unleash new ways to fight climate change and to cope with its impact. Smart contracts are fully traceable, transparent and irreversible self-executing contracts running on blockchains.
Regenerative agriculture programs using smart contracts can bring everyday people into the fight against climate change. This will help to incentivize communities that enable the reduction of their carbon footprints through more sustainable land-use practices.
Environmentally conscious consumers can also use smart contracts for more options in terms of their energy consumption. By using smart contracts, consumers will be able to produce and trade solar energy credits with their neighbors through an exchange that uses a blockchain as a coordination mechanism.
Blockchain technologies can transform individual efforts of companies into a networked effort. It can help clearly track the contributions made by individuals to reduce their carbon footprint. The spirit of competition and market-based incentives create a win-win situation for all to fight climate change.
The decentralized approach of blockchain provides both breadth and depth by engaging and enabling everyone to participate in the calculations. It allows for tracking and reporting of reductions in greenhouse gas emissions along the entire supply chain, including manufactures, suppliers, distributors and consumers.
In January, fashion brand Covalent used IBM Blockchain to help track the carbon impact of its AirCarbon-based fashion accessories, from eyewear to handbags. AirCarbon is a regenerative material made by natural ocean microorganisms that replaces synthetic plastic and fibers to help solve plastics pollution and climate change. This provides visibility into the carbon impact each specific product has on the environment.
Innovations in blockchain technologies are powerful enablers for collective action to fight climate change. It is important to recognize clean technology start-ups in this process.
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