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The World Economic Forum (WEF) believes that blockchain represents a central element of sustainable digital finance, a new paradigm that combines emerging technology with environmentally conscious business models.
In a new report released Wednesday, UBS executive Karin Oertli lists blockchain technology along with artificial intelligence, mobile platforms, and the Internet of Things as the cornerstones of digital finance. These technologies, when combined with environmental, social and governance (ESG) frameworks, could help governments and companies achieve their high sustainable development goals.
Oertli said:
“We believe sustainable digital finance will play an essential role in efficiently channeling this capital to fuel innovation, growth and job creation, while supporting the transition to a sustainable low-carbon economy. carbon”.
Oertli’s comments are consistent with previous research from the Organization for Economic Co-operation and Development (OECD), which touted blockchain as a “digital enabler for sustainable finance” and carbon reduction. The OECD stated:
“The core properties of blockchain and other DLTs can enable deeper technological integration, standardization and the possibility of new business models.”
Although annual CO2 emissions continue to grow on a global scale, Western nations appear to have reduced their carbon footprints from peak levels. Europe’s CO2 emissions peaked in the early 1990s before declining over the next decade. The US peaked in 2007 just before the global financial crisis.
Blockchain’s sustainable development narrative is a significant departure from conventional criticism of Bitcoin. As the first blockchain protocol, Bitcoin has taken its share of the heat for its consensus on proof of labor draining resources.
Attempts to assess Bitcoin’s environmental impact vary, but an MIT Technology Review report last year suggested that miners could pump as much CO2 per year as Kansas City.
In 2018, a study widely published in Joule magazine indicated that the Bitcoin network consumes the equivalent of a quarter of Australia’s electricity.
However, organizations such as the OECD believe that blockchain technology leverages key aspects of transparency, data verifiability, process efficiency and automation that can “drive the systemic changes needed to deliver sustainable infrastructure.”
As the WEF notes, some of the more than 1,200 “climate tech” startups launched since 2013 have leveraged blockchain and other emerging technologies.
The World Economic Forum had not responded to a request for comment at the time of publication.
