The blockchain is a shared database technology that underlies Bitcoin and Ethereum. It’s set to disrupt many industries in the coming decade but few people know the positive impact that it could have on the environment. Blockchains can help reduce bureaucracy and fraud, make organizations more transparent and democratic, help track the origins and movements of products and encourage people in institutions to adopt environmental practices.
Here are 7 ways the blockchain can help protect the environment and reverse climate change:
Blockchain for Supply Chain Management
Most people prefer to buy products that are ethically produced but it’s not always easy to find that information. Products go through many hands before they reach the store shelves and it’s very easy for companies to lie about how their products were made, what materials and chemicals they use, where they dump their garbage or how fairly they treat their employees. Blockchains can be used to track products from the producer to the store shelf and help prevent waste, inefficiency fraud and unethical practices by making supply chains more transparent. They can also help consumers to be better informed about how each product was made and shipped so that they can make more environmentally friendly choices.
If we track food for example, this could enable buyers to purchase local produce knowing that it was grown locally. It would also help cut down on carbon emissions due to food not having to travel long distances. Blockchains could ensure that fish being sold at a fish market actually came from sustainable fishermen or verify that a bag of coffee actually came from a fair-trade producer.
- FoodTrax is a blockchain powered app that aims to do just that, track food from the source to the store shelf.
- Provenance is a start up using blockchain technology to make supply chains more transparent.
Blockchain for Recycling
Current recycling programs often give little or no incentive for people to participate. The responsibility for running these recycling programs often falls on individual cities and it can be difficult to track their impact. A recycling program on the blockchain would encourage participation by giving a financial reward in the form of a cryptographic token in exchange for depositing recyclables, like plastic containers cans or bottles. It would also make it easy to transparently track the amounts of materials recycled, costs and profits and evaluate the impact of each participant in the program.
- RecycledToCoin is an app that provides a token reward for returning plastic containers using automated machines.
- PlasticBank/SocialPlastic is another blockchain powered project that enables the exchange of old plastic for money, items or services in third-world countries.
Blockchain for Energy & Power Sector
Traditional power grids are centralized which can create inefficiencies and energy distribution like having unused surplus. In parts of the world affected by natural disasters or poverty, power outages can leave people without access to electricity for long periods of time. A peer-to-peer blockchain based energy system would reduce the need to transmit energy over long distances and save the energy that could get lost along the way. By locally directing energy from where it’s produced to where it’s needed, it would help reduce the need for energy storage.
- TransactiveGrid is working on a blockchain platform that solves this problem.
- SunContract is a blockchain based peer-to-peer energy trading platform for solar and other renewable.
Power plant installations are expensive and are often financed by governments or large private companies. A blockchain based platform would allow people to directly invest in renewable energy installations in their area and around the world.
- EcoChain is a blockchain app in development which aims to do exactly that.
- ElectricChain is another blockchain platform with several apps like Solar Coin, which aims to incentivize solar installations around the world.
Blockchain for Environmental Treaties
It can be difficult to track the real impact or compliance of environmental treaties and sometimes there isn’t an incentive for governments or corporations to keep their promises. Fraud and manipulation of data are also problems in this area. More than $900 million is spent annually on administering the global carbon credit system alone.
The blockchain can be used to transparently track environmental data and show whether commitments were met. Once the data is entered into the public blockchain, that stays there forever. Using the blockchain to track carbon credits and legal documents would cut down on administration costs and discourage corporations and governments from backpedaling on their environmental promises or misreporting their progress.
Blockchain for Nonprofits
When you donate to an environmental charity, it can be difficult to track where the money goes or how it is spent. Bureaucracy, corruption and inefficiency are still common in the charity space. Blockchain technology can ensure that money intended to be a reward for conservation or payment to a specific cause, does not disappear into unintended pockets through bureaucratic labyrinths. Blockchain money could even be released automatically to the right parties for meeting specific environmental targets. Blockchains enable funds to be transferred without bank account’s. This is beneficial to people in countries without good banking infrastructure. This means that it’s possible to send money directly to people who need it without going through a complex web of middlemen or centralized authorities.
- BitGive & BitHope are two blockchain projects focused on ensuring that donations go where they’re intended.
Blockchain for Carbon Tax Levies
In the current system, it’s hard to see the environmental impact of each product and it’s carbon footprint is not factored into the price. This means that there is little incentive for consumers to buy products with a low carbon footprint or for companies to sell such products. Tracking the carbon footprint of each product using the blockchain would protect this data from tampering and it can be used to figure out the amount of carbon tax to be charged. At the point of sale, if a product with a large carbon footprint is more expensive to buy, this would encourage buyers to buy products that are more environmentally friendly and would encourage companies to restructure their supply chains to meet the demand.
A blockchain based reputation system could also give each company and product a score based on the carbon footprint of the products they sell. This would make manufacturing more transparent and discourage wasteful and environmentally unfriendly practices.
Changing Incentives with Blockchain
In a world of complexity it can be difficult for individuals or companies to to see the direct effect of their actions. The incentives for acting in an environmentally sustainable way aren’t always clear especially, in the short term. Blockchain technology can help both individuals and companies to see the real impact of their actions and encourage them to take the actions that benefit the environment.
The blockchain can be used to transparently track the carbon footprints of products, greenhouse gasses or waste emissions from factories or companies overall history of compliance to environmental standards. Companies and individuals can be encouraged to act in environmentally sustainable ways through transparency of information, credits being issued for taking certain actions or blockchain base reputation systems. Using blockchain technology, these new incentives could completely change what drives our economy and benefit not only us but the future generations living on our planet.
How can you become part of the solution? Research blockchain projects who are working on solving these problems and support them by sharing their projects, donating or investing in them!