How blockchain helps in carbon emission trading, clean energy trading, the reduction of food waste, and more.
Frequent wildfires, long droughts, and devastating tropical storms are more common than they’ve ever been. As global climate change progressively rears its ugly head, innovators are investigating ways blockchain technology can be used to boost climate action in four main areas. These include carbon emission trading, clean energy trading, the reduction of food waste, and more transparent tracking and reporting of greenhouse gas emissions.
At the same time, Alex More, assistant research professor and postdoctoral fellow at Harvard University and the Climate Change Institute at the University of Maine, says the high energy consumption necessary for blockchain is a “serious problem” and that the private sector’s involvement is crucial.
“We know from several studies that 80 percent of customers are more likely to buy a product if it has a positive environmental impact,” says More, “That translates into market share for companies, and it translates into positive branding, too. Those are significant business incentives.”
Carbon credits for sale
Ben & Jerry’s, a brand that has social responsibility embedded in its DNA, is proving to be a leading private sector player in converging blockchain and climate action. On May 1 in London, the ice cream maker and the Poseidon Foundationlaunched a pilot using blockchain to purchase carbon credits on behalf of consumers. Last year, Blockchain News reported that their technology will prevent the double counting of carbon, and will be consistent across jurisdictions. The platform uses smart-contracts and a Stellar based token OCEAN (/OCN) to manage the carbon offsetting process.
Laszlo Giricz, founder and CEO of the Poseidon Foundation, says the organization is using blockchain in one side as a registry.
“That’s where we are managing the life cycle of a carbon credit from project inception to carbon credit retirement, and also as a settlement layer where the process is integrated with point of sale systems at retail locations and our OCN tokens,” he explains.
Here’s how it works at the Ben & Jerry’s location. A consumer comes into the store and selects ice cream. If you want more than one flavor at the point of sale, a Ben & Jerry’s employee will say, ‘Hey, we have partnered with Poseidon, and we’re donating one penny with each scoop of ice cream. Would you like to help us protect the Peruvian Amazon?’
“What’s been happening has been blowing our mind,” says Giricz, “There have been so many consumers who just rounded up to the pound. There were people who bought one scoop of ice cream and instead of £3.20 they paid £4.00. There were consumers who bought three scoops of ice cream for a total of £9.60 and paid £10.00.
As for how blockchain prevents the double counting of carbon across jurisdictions, Giricz says the technology’s immutable ways of storing and transacting takes care of that.
“You basically have a storage system that keeps a track record of the life cycle of a carbon credit. This makes it impossible to do any, as I like to call them, “naughty behaviors” that we’ve seen previously in carbon markets.”
The environmental cost of digital currency
Tatiana Koffman of the Full Cycle Energy Fund, an investment firm dedicated to turning trash into clean energy, says digital currencies already consume 0.15 percent of the world’s energy, exceeding the electricity consumption of Ireland and most African nations.
“Most data centers are located where energy is cheapest, although some are starting to take the environment into account and partner up with renewable energy producers,” says Koffman, “Luckily, many of the new tokens being issued are built using the ‘proof of stake’ model and require less computing power and energy.”
Reducing food waste
Another climate-driven application of blockchain technology is to create efficiencies and data sharing in the supply chain for the food sector. Eric Weaver, CEO of Transparent Path, which connects businesses to blockchain solutions, sees using blockchain as a means of reducing food waste as a promising use.
See also: Healthcare enters the blockchain space
“We know that livestock emissions make up between 14.5-18 percent of total global greenhouse gas emissions—more than automobiles,” says Weaver, “We also know that approximately 40 percdnt of all food in the US is wasted or discarded. Globally, that number is the equivalent of 1.3 billion tons. And it’s not just the food that’s wasted. Globally we use 45 trillion gallons of freshwater to grow crops that are wasted. And from a power perspective, we burn 350 million barrels of oil to create electricity to grow crops that are discarded. This type of waste is sheer insanity.”
He prescribes using blockchain to provide real-time traceability and provenance data (records of inputs) around the journey of food.
“We believe we can cut massive amounts of food waste from the supply chain, and subsequently cut carbon and methane from climate impact,” he shares.
Traceability, transparency, and data are all essential for accountability, and for climate change to be put in check, accountability is needed across all industries.