How can blockchain help in the environmental crisis
Over the last few years, governments and organizations worldwide have focused on using various technological tools to mitigate climate change and biodiversity loss challenges. One of the tools that could be highly effective in tackling the climate crisis is blockchain.
From a technology point of view, blockchain is a digitally distributed, decentralized ledger that helps track and verify transactions. Even though blockchain is well known for the technology behind cryptocurrencies such as ..
In this article, we will explore how blockchain technology can help to combat the environmental crisis.
Guide for investors
Investments that involve large, international sustainable development projects have become highly complicated, causing delays and backl ..
According to a report by the United Nations Environment Programme (UNEP), blockchain's distributed ledger technology can provide significant improvements by allowing investors, renewable energy project developers, and purchasers to collaborate on a common platform with established global standards for compliance due diligence.
South Africa-based renewable energy startup Sun Exchange allows anyone with an internet connection to purchase solar panels online and rent them to hospitals, schools, businesses and other companies in Africa. Sun Exchange uses the Bitcoin blockchain for making cross-border payments. This eliminates any potential intermediaries between investors and beneficiaries. Through Sun Exchange's solar panels, companies in South Africa have reduced their energy costs by nearly 30%
Power Ledger, a technology company in Australia, has started to explore the impact of blockchain. The organization established a pilot project in India's Uttar Pradesh. They allowed homeowners with solar panels on their rooftops to sell power to others on the grid. This involves setting up prices in real-time and implementing transactions over the blockchain. These systems can help increase the deployment of renewable energy.
Blockchain technology can also be used for sustainable and environmentally friendly supply chain practices. The technology can track products from the manufacturer and help prevent inefficiency and waste by making supply chains transparent. Blockchain can also help consumers better understand how the products were made and shipped. This will allow them to make environmentally friendly choices.
Foodtrax is a Blockchain-based dApp that plans to track food from its origin to the shelf to eradicate food waste due to storage and improper handling. Through their Blockchain-based dApp, Food Trax has interlinked data temperature loggers and equipment measuring and monitoring, focusing on developing a flexible solution that covers all steps related to the supply chain with transparency.
An area of environmental sustainability where blockchain can have a significant impact is recycling. By implementing a recycling program on the blockchain, organizations can give financial incentives to individuals in the form of a cryptographic token. This could be in exchange for depositing recyclables such as plastic cans, bottles, containers etc. This helps to track essential data such as cost, volume and profit and also helps to evaluate the environmental impact of an individual or company participating in the program.
It is evident from the report that Blockchain technology can certainly help in solving the environmental crisis and improve sustainability in various ways. However, driving the penetration of emerging technology like blockchain will require improving digital infrastructure. As blockchain and related digital technologies develop rapidly, policymakers are needed to adjust regulations that can help design future energy systems and mitigate environmental risks.