Climate change is the defining crisis of our time. The Earth is projected to be around 2°C hotter by 2050, causing the world’s ice sheets to melt at a much higher rate than at any time over the last century and biodiversity to deplete at an alarming rate. Consequently, to prevent a catastrophic climate disaster, action must be taken by countries across the world.

The 2015 Paris Agreement was a major step towards strengthening global sustainability efforts, and 193 countries signed up to a set of objectives to be achieved by 2030. Another step was the United Nations Sustainable Development Goals (SDG), which includes 17 global goals   that were each designed to tackle a range of global challenges. However, achieving these goals – alongside addressing new challenges such as the ongoing COVID-19 pandemic - requires global stakeholders to come together and drive a transformation that redefines the current behaviour. Indeed, it is likely that technology that has emerged as a result of the Fourth Industrial Revolution (4IR) could hold the key to revolutionising the way we address the UN SDGs.

 

One such technology is Blockchain.

 

Blockchains, SDGs and Climate Action

Blockchain is best known as the underlying technology of digital currencies like bitcoin, but it has applications well beyond that. At its core, Blockchain is a distributed ledger that is consensually shared, replicated and synchronised among different nodes or ‘blocks’ to provide instant authentication and immutable data records. In other words, Blockchain records transactions chronologically and publicly with timestamps, making it trust-worthy, inclusive and transparent.

 

Aided by its transparency and ability to handle large amounts of data, Blockchain “is being applied in a variety of situations, from incentivizing the inclusion of renewables in energy networks, thus reducing emissions in the global shipping industry, to enabling banks to perform remittances faster and at a lower cost,” according to the United Nations. In addition, the traceability of information exchange makes Blockchain particularly useful in the context of agriculture, climate change, thus playing a critical role in helping countries achieve the SDGs.

 

Blockchain offers several innovative solutions for climate change mitigation and adaptation. On a macro level, Blockchain creates opportunities for climate change mitigation by bringing stakeholders together to work on a common goal. In doing so, it enables better monitoring and evaluation of climate change activities and supports the development of the carbon market. Further, it helps support decision-making of public and social actors as efficiency, and ethical credentials can be identified at every block in the chain.

 

 “Blockchain could contribute to greater stakeholder involvement, transparency and engagement and help bring trust and further innovative solutions in the fight against climate change, leading to enhanced climate actions,” according to the United Nations Framework Convention on Climate Change.

 

Blockchain can also be an effective tool in addressing data-related challenges in climate change. According to the World Bank, carbon pricing instruments such as emission trading schemes face challenges around data collection, processing and analysis and this makes managing transactions across different networks a cumbersome process. Blockchain can be used to develop and manage information on a broad range of topics, including greenhouse gas mitigation, across different sectors and jurisdictions, thus improving efficiency and speed.

 

Furthermore, Blockchain is being used to address the issue of rising hunger and malnutrition. According to the UN’s Food and Agriculture Organization, limiting global food waste could reduce the need to produce more food by 60%. Blockchain is being used to minimise food waste in innovative ways. For example, BT9 uses Blockchain technology to form a “real-time cold chain management system, that monitors the condition of perishable food products along the supply chain, from the producer to store shelf”. The data allows users to identify problems along the cold chain and take action against waste by maximising product quality along the journey.

 

Expectation vs. Reality

 

The potential of Blockchain in helping to achieve the SDGs does not yet match up with the reality. Whether it is because of issues related to scaling it along a value chain due to varying digital literacy of communities, or the availability of internet connection or the complexity of incorporating each link in a value chain into a Blockchain, in practice, there are many struggles to bring it to life.

 

For example, for regulators and public sector actors, the challenge in scaling Blockchain applications lies in is how to set the regulatory framework and safeguards without impeding innovation. However, steps can be taken to address these challenges. According to the European Commission's ‘Blockchain for Climate Action’ policy, in order to bring Blockchain to the mass market and allow it to help in the climate crisis, there are a number of priority areas to focus on;

 

• supporting national government agencies to collaborate in the development and adaptation of Blockchain-based solutions that support climate actions and the reduction of Greenhouse gas emissions
• developing technical assistance and investment programs that support Blockchain-based digital innovations that contribute to climate change mitigation and adaptation
• promoting the development and adoption of Blockchain technologies that incentivise different actors to reduce their carbon footprint and consider the overall societal impact of their actions
• accelerating Blockchain-based solutions that establish a network between suppliers and consumers and moving beyond the individual, to include all societal stakeholders (industry, distributors and citizens)
• supporting sustainable finance initiatives and promoting the use of Blockchain-enabled technologies for financing climate actions (i.e. green bonds, fintech solutions and alternative finance mechanisms)
• developing partnerships with strategic partners, including UN agencies, international financial institutions (i.e. World Bank, EIB, EBRD)
• and supporting the strengthening of the clean tech innovation ecosystem in Europe and improving access to finance for clean technology start-ups and SMEs

 

The 4IR is already changing our world, but it is important that its impact brings about a positive transformation that delivers equality and minimal environmental impact. In doing so, we will be able to move away from the tradition of progress equalling negative societal and environmental consequence towards one of inclusion and sustainability with the potential to deliver global prosperity. Blockchain has the potential to help us make this change, but to realise its potential, requires a global, collective agreement to prioritise change for the good of all.