- Blockchain technology is seeing increased adoption in projects aiming to achieve carbon neutrality.
- Several eco-conscious projects are using blockchain technology to strive closer to their goals.
Web3 and its many facets strive for mainstream adoption due to multiple reasons. Among them, enhancing and facilitating existing processes and world aspects stands out explicitly. Recently, amid increasing adoption, blockchain technology has found ways to weave into numerous different sectors, offering tech-savvy solutions to societal problems.
One such societal and increasingly pressing problem is the Environment and Climate Change. Carbon emissions which constitute a major part of the causative factor, have been under international radar in the last decade. Earth-conscious organizations urge large-scale companies to become more conscious about the carbon emissions from their institutions.
This article explores how certain growing technical firms have employed blockchain technology to aid the path to Carbon Neutrality.
Why is Carbon Neutrality Important?
Carbon emissions are one of the crucial contributors to global warming. You may have come across the carbon dioxide emissions term in school or in passing. But what does it really mean? Let’s diverge a little to understand the problem before moving on to discover blockchain’s role in it.
Carbon emissions result from innumerable sources today – fancy motorcycles, refrigerators, and almost every other electric appliance contribute to it. When emissions increase they lead to environmental and health hazards. Rising sea levels, extreme climate changes, and hotter temperatures that we experience today result from Carbon emissions.
Leading environmental divisions on international levels including the UNO are now working on implementing methods to insinuate carbon neutrality. Carbon neutrality is the process of balancing carbon emissions with carbon absorptions.
Natural carbon absorption elements, referred to as carbon sinks were calculated to absorb around 9.5 to 11 gigatonne of CO2. However, the earth was measured to emit 37.8 gigatonnes of CO2 in 2021. This data depicts the gravity of the environmental hazard and why it should be prioritized.
As we begin to experience the effects of global warming, more and more organizations have become environmentally conscious and are practicing carbon offsetting. This is a process, where one area’s high carbon emission is balanced by reducing it in another area.
What is Blockchain Technology’s Role in Carbon Neutrality?
While the importance of Carbon neutrality is essentially clear, how does blockchain technology aid in the process? As numerous reports have stated, blockchain technology comes in when tracking the carbon emissions.
Governmental organizations and the UN proceed to work towards a global effort when it comes to carbon neutrality and particularly carbon offsetting. By using blockchain technology, they foster transparency, validity, engagement, and much-needed trust.
While several other technologies have been employed, blockchain caters particularly to tracking the carbon footprints of various firms. It also can be employed to monitor carbon absorptions from pro-environment innovative projects.
Apart from tracking, innovative minds have developed methods to inculcate blockchain into other aspects of carbon neutrality. Some of them have been discussed below:
1. Carbon Emission Trading
Developers have identified a process for tokenizing carbon emission trading. Carbon emission trading markets are sites that provide people the opportunity to neutralize their negative carbon credits. This can be done by the traders purchasing carbon credits from projects or firms that work to reduce carbon emissions from the earth.
Blockchain technology has been employed in this process to tokenize these carbon credit purchases and also to record market activity.
2. Global Understanding Leading to Carbon Neutrality
When employing blockchain technology it leads to a kind of transparency that fosters trust among nations. When carbon emissions are tracked in such an accessible manner, it has helped improve understanding on the global level. Furthermore, it also aids in quick spotting of problematic areas speeding the path to appropriate solutions.
This global understanding also might improve diplomacy on an environmental level, especially in striving for carbon neutrality. Finally, it also ensures integrity in measuring greenhouse emissions data and ensures the total absence of dubious actions.
3. BCT Tackles Double Counting Efficiently
Within Carbon neutrality, another pressing issue is double counting. This term is used when two different countries or continents claim the reduction of a single carbon emission or carbon credit, as discussed earlier.
A transparent data tracking system such as blockchain technology, eliminates the occurrence of double counting. It will be able to identify the source of reduction thus absolving complications.
Apart from the above-discussed roles, blockchain technology also plays other roles such as enhancing climate-finance flows and reducing fossil fuel usage. The chief uses have been delved into deeper in this section.
Eco-Projects Adopting Blockchain Technology
Several eco-conscious blockchain projects have sprung up in the world over the past few years. Some leading projects are discussed below:
1. Plastic Bank
This ecological project as the name suggests works to reduce plastic usage and increase recycling processes. Based in Canada, Plastic Bank employs blockchain technology in striving towards its vision. It allows its users to invest in what it calls ‘Social Plastic Collection Credits (SPCC)’ similar to carbon credits. The SPCC incentivizes plastic collectors.
Plastic Bank has partnered with IBM Blockchain to employ the technology in its operations. With additional partners, it enables reusing plastic and utilizes BCT to reintroduce the recycled plastic into the supply chain.
2. Power Ledger
An Australia-based startup, Power Ledger is an energy trading platform. It utilizes blockchain technology to aid users in trading energy and environmental commodities. Additionally, it also employs BCT to help trade renewable sources thus fostering to reduce global warming.
By aiding the trading of excess energy to areas of deficit, the firm aims to reduce energy wastage and over-consumption.
3. Sun Exchange
This firm is an exception that turns to cryptocurrency and not blockchain technology. It allows users to switch to solar energy using cryptocurrency as a medium of exchange. Sun Exchange fosters a community where it allows its users to lease out solar panels to companies.
Users then earn rent in the form of cryptocurrencies to their wallets. Thus it combines the users’ investment needs with promoting renewable energy sources.
Blockchain Technology in Carbon Trading – Bridging Institutions & Private Investors
Carbon trading, briefly mentioned earlier, refers to the process of increasing an individual’s carbon credit. Through this process, institutions and private investors can reduce their carbon emission rates. By employing this process of trading it allows individual users to contribute along with large institutions towards carbon neutrality.
Furthermore, by increasing carbon credits it helps individuals to enhance their carbon footprint. By integrating carbon trading with blockchain technology, the process of exchanging carbon assets is extremely simplified.
This improves accessibility for individual users and brings them closer to institutional visions. By employing the concept of decentralization, carbon neutrality can be brought to every human. This unique approach can set carbon neutrality apart from other eco-projects as it increases the probability and plausibility of achieving the vision.
Final Thoughts
Carbon emissions are a rising threat and an ecological concern that requires immediate attention. The below chart shows the surge in carbon emissions over the years.
As explained above, the harmful effects of carbon emissions highlight the gravity of the situation. Thus by employing blockchain technology the community is developing solid and fool-proof solutions for a problem of a global magnitude.
Several blockchains such as Aptos, Cardano, and Hedera are also known to be environmentally conscious. This use case also indicates blockchain technology’s ability to enhance the quality of life beyond the sectors of technology and finance.
