How blockchain technology is changing climate protection

The November 2021 United Nations Climate Change Conference, known as COP26, in Glasgow, Scotland, urged the world to commit to reducing contributions to carbon emissions. Reaching a net-zero world in less than 30 years is prompting many to turn to blockchain technology, buying carbon offsets and reviving 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 multi-stakeholder group of organizations to create an open global initiative, the Climate Chain Coalition, signaling its early support for blockchain for the climate.

At the 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 develop a common understanding of the technology’s potential to help countries on climate action, followed by the Blockchain4Climate networking event. Building on these discussions, I will shed light on how we are using blockchain to fight climate change.

Green digital asset solutions

Although the digital asset industry has been criticized for its high energy consumption, such an accusation is misleading. It is important to differentiate between cryptocurrencies and underlying blockchain platforms that are energy efficient and support climate initiatives. Only a few climate initiatives use cryptocurrencies. Algorand has declared its blockchain fully carbon neutral; Kickstarter Builds Crowdfunding Platform on Carbon Negative Blockchain Platform Celo; and SavePlanetEarth is setting up certified Carbon Credit Smart Nonfungible Tokens (NFT) on Phantasma, a green blockchain for developers to build their decentralized applications. The game has started and platforms are transitioning to more sustainable power and consensus mechanisms. Polkadot was also highlighted as a climate-friendly blockchain.

Related: Green “light”: The EU’s crypto approach balances ecological values ​​with regulatory relevance

Renewed interest in carbon reporting, sequestration and the use of voluntary carbon markets has opened the door to green digital asset solutions that can be tokenized and used as commodities in a market system – e.g. B. Green Utility Tokens, a reward for reducing carbon emissions; Green asset tokens, tokenized carbon credits or biodiversity offsets; green crypto programmed only to be spent on green products; and Green Security Tokens, which offer issuance platforms designed to enable Green Proof of Impact Reporting.

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We see such projects maturing and spreading as people come up with innovations for climate protection – e.g. B. TreeCoin sells tokenized assets tied to eucalyptus trees and reinvests them in eucalyptus trees in Paraguay. Carbonland Trust also has a carbon credit for forest conservation, while the Cambridge Center for Carbon Credits seeks to buy carbon credits to fund nature-based biodiversity conservation solutions. ClimateCoin promotes carbon offsetting by awarding tokens to people who plant trees or reduce carbon emissions. Carbon Offsets To Lindering Poverty supports projects that reward farmers who plant and tend trees on underutilized parts of their land. Evercity is working with GloCha on a green chain solution for COP28, the 28th session scheduled for November 6-17, 2023.

Related: The UN’s COP26 climate change targets include emerging technologies and carbon taxes

Several projects also focus on tradable carbon credits. The Universal Protocol allows certified projects to convert greenhouse gas reductions into tradable carbon credits. First, NFT-based carbon credits provide carbon credit issuers access to the blockchain, allowing users to track, trade, and burn credits. Additionally, organizations like Evercity and Blockchain Triangle are robust integrated platforms that guide and aggregate initiatives and carbon credits, linking them to investors and financial mechanisms like digital green bonds via 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 Climate and its Bitmo platform and the Open Earth Foundation and its Nested Climate Accounting for the Paris Global Stocktake.

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Smart Grid Management

Blockchain technology can help improve and manage smart grids in decentralized energy markets and enable reliable and transparent peer-to-peer electricity trading. Powerledger enables consumers to buy, sell or exchange surplus renewable electricity directly with each other. Solstroem is focused on accelerating the energy transition in developing and emerging economies by providing off-grid solar and geo-tagged, time-stamped micro-carbon credits that individuals or businesses can purchase. British company Electron uses smart contracts on the Ethereum blockchain to develop a smart grid that delivers constant energy. Grid Singularity is a decentralized energy marketplace and platform for exchanging energy data. TransActive Grid is also a blockchain-based energy marketplace, but focuses on local peer-to-peer trading of self-generated energy.

New technologies that are significantly reducing manufacturing costs and the massive adoption of cellphones in developing countries are enabling solar panels to be connected to the blockchain, allowing consumers to benefit from distributed generation. Azuri Technologies, Zola Electric and Mobisol produce cost-effective solar panel solutions for off-grid areas in rural Africa. This intelligent pay-as-you-go system makes solar technology affordable at a fraction of the price of kerosene, allowing households to amortize solar panels, helping them move from renting to owning an asset. This can transform the lives of off-grid rural citizens, empowering them to own cutting-edge technology, creating healthier, safer living environments, and supporting additional sustainability initiatives.

NFTs and gamification

NFTs are increasingly being used for climate change, with initiatives ranging from awareness raising to fundraising; Additionally, NFTs are used as an immutable record for impacts and carbon credits. SavePlanetEarth launches 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 allowances, eliminating double counting.

Related: Despite the bad reputation, NFTs can be a force for good

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

Adi K. Mishra, founder of DCarbon, points out that you can also use the gameplay to inspire widespread positive climate action. GreenApes uses gamification to help people understand their carbon footprint and we can expect to see more games where people can play to earn something for climate protection.

measurement and reporting

Blockchain technology will be combined with artificial intelligence and the Internet of Things (IoT) with large-scale, interconnected databases – e.g. B. climate, water, land – will be a crucial measurement and reporting tool to develop measures on desertification and deforestation and to predict weather events and trends. Blockchain smart contracts provide a tamper-proof and no-cost mechanism to associate positive (or negative) environmental changes or outcomes with financial incentives/disincentives – e.g. a village can “trigger” the release of crypto to the village based on observed measurement in the environment .

DAO for climate protection

Blockchain technology can create new​ ​digital​​economies that ​unite people and economically align toward a common purpose. It is possible to develop economies that value climate protection. IAAI GloCha presented its United Citizens 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 any investment advice or recommendation. Every investment and trading move involves risk and readers should do their own research when making a decision.

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

Jane Thomasson is Chairman of Kasei Holdings, an investment firm specializing in the digital asset ecosystem. She has a Ph.D. from the University of Queensland and has held multiple roles at the British Blockchain & Frontier Technologies Association, Kerala Blockchain Academy, Africa Blockchain Center, UCL Center for Blockchain Technologies, Frontiers in Blockchain and Fintech Diversity Radar. She has written several books and articles on blockchain technology. She was featured in Crypto Curry Club’s 101 Women in Blockchain, the Decade of Women Collaboratory’s Top 10 Digital Frontier Women, Lattice80’s Top 100 Fintech for SDG Influencers, and Thinkers360’s Top 50 Global Thought Leaders and Influencers on Blockchain.