Blockchain gets a green shade

Chennai: EVEN as the world is increasingly looking at using digital technology to accelerate action on issues such as climate change and biodiversity loss, blockchain surprisingly is pushing to the forefront.

Due to its inherent characteristics, it helps to verify and trace multi-step transactions. While it might be best known as the architecture behind crypto-currencies like Bitcoin, it is finding uses in everything from tracking the sustainability of products to the real-time monitoring of pollution, that needs to be understood.

Let’s explore how blockchain’s potential to accelerate the transition to clean energy and how it helps to combat climate change in developing countries. As global temperatures are on course to rise by at least 2.7°C by the end of the century, and with summers in India getting hotter, we cannot turn a blind eye anymore.

Blockchain technology can play a part by making possible more accurate load monitoring, generation and distribution in the grid through efficient use of data and more.

Power Ledger, an Australian technology company, has already begun leveraging the potential of blockchain. They have established a pilot project in Uttar Pradesh that allows homeowners with solar arrays on their rooftops to sell power to others on the grid, setting prices in real time and executing transactions over blockchain. Systems like those can help accelerate the deployment of renewable energy in developing countries and help states move away from unsustainable electricity subsidies.

There are areas where blockchain, alongwith other advanced technologies of the Fourth Industrial Revolution, could prove to be the game-changer that disrupts not just existing business models, but also the way we tackle climate change and other environmental challenges.

Supply Chain Traceability is one such use case. Most people want to buy products that are ethically made, but that kind of information is often unavailable and difficult to verify. A product goes through many hands before it reaches the store. It’s easy for companies to lie about how their products are made, what materials and chemicals they use, where they dump their garbage, or how fairly they treat their employees. Blockchains can be used effectively to track products from the manufacturer to the shelf and help prevent waste, inefficiency, fraud, and unethical practices by making supply chains more transparent and help consumers be better informed of how each product was made and shipped so they can make more environmentally friendlyand help realise a truly circular economy.

Blockchain could also fundamentally change the way that materials and natural resources are valued, used and traded, incentivising individuals and organisations to realise financial value from things that are currently wasted, discarded or treated as economically invaluable. This could drive widespread behavioural change and help to realise a truly circular economy. A classic example is the Plastic Bank, that has created a social enterprise as it issues a financial reward as a cryptographic token in exchange for depositing collected ocean recyclable plastics.

To be continued…