The World Economic Forum (WEF) launched an initiative called Modeling the future of environmental safety and natural resources, a stimulating collaboration that focuses on achieving global economic growth without causing damage to the environment and, preferably, improving the state of our global environment.
The WEF initiative has published research papers on a wide range of technologies that have come into play since the 1950s, and blockchain technology is, without surprise, one of these.
In collaboration with PWC and Stanford Woods Institute for the Environment at Stanford University, they produced a research paper entitled "Building Block (chain) s for a better planet."
In this article, we take a look at the most interesting perspectives and ideas presented in this research paper.
Pressing environmental challenges
The document focuses on the current status and potential of blockchain technology with a specific focus on its application to address pressing environmental problems.
The pressing global environmental challenges stem from the unprecedented economic prosperity seen since the second half of the 20th century.
Although we have experienced very positive economic growth (real production has grown 20 times and 700 million people have moved into the middle class), this has come at the expense of our natural environment; pursuing economic growth, and therefore demand, is increasing the pressure on our environment.
Unguided claims, economic and technological progress have the potential to accelerate environmental degradation.
However, the research paper identifies blockchain technology as potentially transforming the way humans interact with each other and the environment.
According to the document, the 6 most demanding environmental threats are:
Cases of use Blockchain for the environment
The 2017 has been marked by the cryptocurrency and by the ICO mania. However, what was most not realized is that less than 1% of these projects were in the energy sector and public services.
The research and analysis conducted by the WEF for their research paper identified over 65 cases of the use of blockchain technology to combat environmental challenges, indicating that the potentials of the case of use in that sector are certainly present. .
Based on the previous 6 environmental challenges, the paper presents potential blockchain solutions for these concerns.
Blockchain use case solutions particularly relevant for environmental applications tend to group around the following transversal themes: allowing the transition to cleaner and more efficient decentralized systems; negotiation of resources or peer-to-peer permissions; transparency and management of the supply chain; new financing models for environmental results; and the realization of non-financial value and natural capital.
Game Changers enabled Blockchain
The research paper then identified 8 ways in which blockchain technology could act as a significant change of game, both in general and specifically to combat environmental challenges.
1. Transparent supply chains
Blockchain technology could allow full traceability and transparency of a product's supply chain, as all data could be stored on an immutable ledger.
For this reason, consumers can see the complete composition of a product and the companies that are part of the value chain. Global supply chains are complex and involve many parts, and in the current state of the industry, responsibility is difficult to assess.
Through this, the consumer can make purchasing decisions that are more ethical and respectful of the environment.
From the consumer's point of view, the complexity of supply chains means that it is difficult for consumers to know how their consumption habits and purchase decisions affect the environment or the associated working and living conditions. along the supply chain.
Waltonchain, OriginTrail, is Seal they are examples of the industry that are working on this.
Oracles are a key challenge in automated supply chains. Once the data is on the blockchain it is immutable, but you must first trust the source that puts the data on the blockchain.
2. Management of sustainable and decentralized resources
Centralized resource management systems have several disadvantages, including the inefficient match between supply and demand and which have (and are) a single point of failure.
Decentralized energy grids, like the platform Power Ledger the project is building, it can give a substantial increase of efficiency to the management of the resources. Smart contracts exclude intermediaries and have the potential to ensure optimal demand and supply on a peer-to-peer basis
3. New forms of financing and investment
Because unlicensed blockchains are truly global, they can revolutionize capital access for environmentally-oriented projects.
Blockchain-based platforms enable seamless global management of complex financial structures and can target a large pool of globally dispersed donors and investors. This pool can finance the projects of their choice and through the transparency and incentive models enabled by the blockchain technology.
Traditional shareholders are converted into stakeholders in the new decentralized system.
4. Enable incentive circular economies
Circular economies it is a concept that focuses on extracting maximum value from each resource through recycling and re-use as many times as possible, effectively leading to substantially less waste.
Through properly designed token economyindividuals can be incentivized to unlock the value of products and materials that would otherwise be wasted and discarded, thus stimulating circular economies.
For example, IBM Plastic bank is experimenting with blockchain technology to encourage the collection of plastic in the ocean and Gainforest uses blockchain technology and a symbolic economic model to control and incentivize farmers to preserve the rainforest in the Amazon.
5. Transforming carbon markets
The carbon trade is still prone to skepticism, mainly due to the lack of market transparency, the non-standardization of the market and often the voluntary nature of participation in carbon-responsible policies.
Blockchain applications have the potential to change this and ultimately require companies to pay for the extra stress they put on the environment by setting this in their products and services. Beyond the immutability and transparency that blockchain can bring to carbon markets, they could also allow peer-to-peer carbon markets.
6. Monitoring, monitoring and verification of next-generation sustainability
Consumers, investors and governments are increasingly pressing companies to become sustainable and environmentally friendly.
Because of the nature of blockchain technology, this pressure could lead companies to record their processes transparently, to ensure that companies are actually doing what they say they do.
7. Automatic preparation of the disaster and allocation of aid
As we have seen above, natural disasters are increasing both in terms of frequency and intensity, leading to a growing demand for real-time preparedness and aid after such disasters.
Blockchain solutions could be transformative in terms of their ability to improve disaster preparedness and aid effectiveness. In addition, smart-contract technology can determine which contract offer is best available based on community delivery needs, including quantity, price, timing and location.
8. Land management platforms
As the research paper points out, this is the most hypothetical case but also the most intriguing for the potential of the blockchain. Blockchain may be able to facilitate the collection, monitoring, management and market mechanisms for many of our environmental problems and solutions.
Examples are a global oceanic data platform for ocean resource monitoring, immutable property rights and agreements on how some pieces of land can be used and decentralized environmental metrics through the collection of incentivized data.
Barriers that Blockchain needs to overcome
The research paper also presents a clear overview of the existing challenges and risks for blockchain technology in general.
Basically, most of the challenges and risks faced are caused by the state of technology.
Blockchain and its applications must be more technologically advanced and robust, as well as better known and trusted by the public before they are ready for mass adoption.
In the Conclusions and Recommendations section (page 26-30), there is a lot of valuable information about blockchain technology, especially about where technology actually makes sense to implement it and how to implement it.
Although it is becoming increasingly clear how serious our environmental challenges are, the reality is that ultimately only a minority of entrepreneurial activities and innovations are addressing these issues. The blockchain industry is no exception.
The research paper presents a wide variety of interesting opportunities for blockchain technology regarding our environment, as well as opportunities to tackle the major environmental challenges we are currently facing:
The opportunity for blockchain-enabled innovation for the benefit of humanity and our environment is substantial, but the technology itself is still at a relatively early stage, with many obstacles to overcome. Far from being an obstacle, this is an important opportunity for stakeholders to collectively ensure that the future development of blockchain technology is a "responsible blockchain". If this is achieved, blockchain can be expected to play an important role in enabling new technological solutions to pressing environmental challenges, including climate change, biodiversity, ocean health, water management, air pollution, resilience and reduction of waste.
This article provides a brief summary of the in-depth research paper published by the World Economic Forum. To find out more, you need to read the whole document for an informed and proactive perspective on how blockchain can help us find a sustainable balance with our natural environment.