The shared database technology known as the blockchain, which powers Bitcoin and Ethereum, is expected to upend a number of sectors in the next ten years. The majority of people are unaware that this technology can be utilized to address the major environmental issues our world is currently experiencing. It is already being used in banking and payments. It may potentially contribute to halting or reversing climate change if implemented globally.
Blockchains are especially intriguing for environmental concerns since they serve as permanent, tamper-proof databases that are shared by a community without a centralized owner. Without the aid of a centralized authority, they enable the tracking and validation of interactions and transactions. The transparency, effectiveness, and accountability of environmental programs can all be considerably improved in this way.
1. Management of the Supply Chain
The majority of consumers prefer to purchase goods that were produced ethically, however this information is frequently lacking and challenging to confirm. Before a product is sold in a store, it passes through numerous hands. For businesses, lying about how their products are created, the resources and chemicals they use, where they dump their trash, or how fairly they treat their people, is quite simple.
By increasing supply chain transparency, blockchains can be used to trace goods from the point of manufacture to the retail shelf, reducing waste, inefficiencies, fraud, and unethical behavior. Additionally, they can assist customers in making more ecologically friendly decisions by providing better information about how each product was produced and distributed.
For instance, if we tracked food, consumers would be able to buy locally sourced vegetables with confidence. Due to the food not needing to travel great distances, this would also reduce carbon emissions. Blockchain technology may confirm that a bag of coffee genuinely came from a fair trade supplier or that a fish being sold at a fish market actually came from a sustainable fisherman.
People frequently lack compelling reasons to participate in the recycling schemes in place today. Since it is frequently the responsibility of each each municipal to manage recycling programs, many places don’t even have recycling programs. It’s extremely challenging to monitor and evaluate the results of these programs.
By offering a financial incentive in the form of a cryptographic token in exchange for the deposit of recyclables like plastic containers, cans, or bottles, a recycling program on the blockchain could promote participation. Similar arrangements are already in place in a number of locations throughout the world, particularly in Northern Europe.
It would be simple to track data like volume, cost, and profit transparently and to assess the effects of any location, business, or participant in the program.
Due to the centralization of traditional power grids, there may be inefficiencies in the distribution of energy, such as unused surplus. Additionally, power outages can prevent people from accessing electricity in regions of the world where there are frequent natural catastrophes or extreme poverty.
An energy system built on a peer-to-peer blockchain would eliminate the need to transmit electricity across great distances, which can cause losses along the way. Because such trade can shift electricity locally from where it is being produced in excess to where it is needed, it would also assist in reducing the need for energy storage.
4. Environmental Accords
The true effects of environmental treaties can be hard to measure, and there isn’t always a strong incentive for governments or businesses to follow through on their commitments. In this domain, fraud and data manipulation are also issues.
Due to its ability to transparently track crucial environmental data and demonstrate whether obligations were reached, blockchain technology may deter businesses and governments from breaking their environmental commitments or falsely claiming their progress. Once information is added to the public blockchain, it is permanently stored there.
Blockchain-based legal document storage could reduce fraud and manipulation, for instance inside the worldwide carbon credits scheme. Every year, just on the administration of this system, some 979 million are spent. There is little prospect of businesses and governments turning a blind eye when carbon credits are bought and sold illegally if there is an irreversible record of the transactions.