In the headlines: The US is taking action to battle climate change, as extreme heat events wreak havoc in Western Europe and global temperatures continue to rise.
In what’s being dubbed as the most substantial investment in history to fight the climate crisis, the U.S Senate passed a landmark bill on Monday, which – subject to a likely House passage – would entail a $375 billion being poured into climate-fighting strategies over the next decade.
The strategy is projected to put the country on a path to cut greenhouse gas emissions 40% by 2030, and would represent the single largest climate investment in US history. It could also create up to 1.5 million new U.S. jobs in 2030 in construction, manufacturing, and service, according to Energy Innovation.
This is happening in the context of blockchain technology shaping up to be a key player in sustainability efforts, especially in sectors that emit the most greenhouse gasses (see above).
Avelia is one of the first blockchain-powered projects aimed to completely transform aviation, which is estimated to contribute about 5% to the global warming problem. Developed by Shell and Accenture, with the support of the Energy Web Foundation (EWF), the venture offers around one million gallons of sustainable aviation fuel (SAF) and associated environmental benefits to corporations looking to reduce emissions from their business travel.
Regen Network is a prominent blockchain-based marketplace that allows farmers to monetize their ecological data while getting rewarded for sustainable practices — particularly important, as current agricultural practices are the second most carbon emitting sector in the world.
Plastic Bank is now a large-scale social enterprise centered around recycling, and it powers its entire supply chain system through blockchain technology. Over the years it’s gained the support of the tech giant IBM, and the well known household products manufacturer, SC Johnson.
Why it matters: Through efficient and transparent use of data, blockchains could be integral in accelerating efforts to cut carbon emissions.
Essentially databases that store information in a digital format, the technology is novel for the way it groups information into chunks (blocks), that are then strung together to form a chain, where each new data point that’s added is time-stamped within the wider network.The goal of this grouping is to allow digital information to be recorded and distributed, but not edited.
Because of its immutable feature, blockchain offers enhanced traceability, which allows for accountability (where it was previously impossible) and efficient use of data by organizations to visualize emissions with high level of accuracy– particularly important to industries that are overly dependent on fossil fuels.
Blockchains can also help drive down costs for sustainable alternatives. The aviation industry is expected to double to over 8 billion passengers by 2050, with a detrimental cost to the environment if fossil fuels are the primary source of energy. By stimulating demand which would in turn increase supply, projects like Avelia, powered by efficient and transparent databases like blockchain can lower SAF costs (currently too expensive for most airlines) and in turn, accelerate the industry’s pathway towards net-zero emissions.
Global policymakers are also increasingly focused on the role of blockchain in ongoing efforts to combat climate change, as well as their potential in facilitating the transition from carbon-based fossil fuels.
“The world needs to almost halve emissions over the next eight years to stay on track for a 1.5°C world, while at the same time expanding access to energy to bring hundreds of millions of people onto the grid,” said Mark Radka, Chief of UNEP’s Energy and Climate Branch.
“Blockchain technology can play a part by making possible more accurate load monitoring, generation and distribution in the grid through efficient use of data,” he added.
Between the lines: Blockchain technology is being explored for its uses in a range of industries – from supply chain management to banking systems – though wide scale adoption is still some ways away. But with climate change becoming an urgent concern, the need to accelerate sustainability efforts is pushing blockchain’s development and relevance to the forefront.
In sustainability alone, blockchain’s applicability has been documented in a multitude of industries (see below).
In fact, much of the answer might be in supply chain management alone. According to research by McKinsey, about 90% of the carbon footprint of a typical consumer packaged goods company originates in its supply chain – since blockchain is a distributed ledger, organizations can use them to synchronize their systems of records, making it possible to publicly disclose ESG indicators and prove their commitment to reducing the burden on the environment.
Meanwhile, blockchain technology is on its way to become a prominent way of securely storing and distributing data, with some experts calling wide scale adoption into a society a matter of when and not if.
According to a survey of top fintech and tech companies by Synechron, 94% of companies had plans related to blockchain initiatives in the near future.
By some estimates, the market share for blockchains is expected to grow 84.5% by 2030.
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