Climate change is accelerating, and dozens of industries are playing their part in the fight against it. The blockchain industry is no exception, coming under scrutiny recently for its role in increasing emissions. Luckily, being a young technology, blockchains are able to adapt and integrate new solutions more easily than long-established industries. In this blog post, we will look at what role sustainable development blockchain plays in combating climate change and reaching net-zero emissions, and the green blockchain projects that are already having a positive impact on the environment.

Blockchain for sustainable solutions to climate action

Climate change is heavily tied to current processes in the agricultural, construction, energy, and transport sectors of the economy. Environmentally friendly cryptocurrencies and blockchain technology can play an important role in the fight against climate change as countries, regions, cities, and businesses work together to implement the Paris Agreement on climate change. Blockchain can streamline processes by eliminating intermediaries in the supply chain through decentralization and promote greater transparency. It can also foster greater stakeholder engagement as well as build trust in finance, leading to more action.

Blockchain sustainable development goals for climate action

  • Carbon trading. High-emission organizations using blockchain will be able to track their carbon footprints in real-time and meet quotas by purchasing carbon credits from low-emission countries.
  • Clean energy trading. Blockchain technology will allow the development of peer-to-peer renewable energy trading platforms where consumers can sell or exchange renewable energy that is tokenized through assets.
  • Increasing funding flows. Financial transactions involving international actors in the fight to improve the climate are becoming more complex, causing delays in funding. Blockchain platforms will be able to unite and simplify the management and control of financing.
  • Better tracking and reporting. Blockchain technology can provide greater transparency about greenhouse gas emissions and make it easier to track and report on emissions reductions, eliminating potential double-counting issues.

Proof-of-Stake to address environmental concerns

While the Ethereum network is still the most popular for DeFi applications, the sheer amount of DeFi development has slowed down the network. Since 2016, there has been a gradual transition to Ethereum 2.0, in which the inefficient Proof-of-Work protocol will be replaced by the more energy-efficient Proof of Stake. This transition should help reduce high-energy consumption, solve scalability challenges, high fees, and slow transaction problems.

This model will significantly reduce the cost of network fees (by 99.95%) and successfully reduce energy consumption and environmental impact, thereby moving Ethereum into the green energy blockchain category. Experts predict that in total, Ethereum using Proof-of-Stake will consume about 2.62 megawatts.

Is blockchain technology a sustainable solution to reach net-zero emissions?

The introduction of innovative technologies, in particular blockchain, in activities related to reaching net-zero emissions, helps to find new efficient ways to preserve the environment.

Among the most suitable mechanisms for the practical application of blockchain technology to ensure the reduction and achievement of net-zero emissions are: resource rights management, traceability of the origin of raw materials or products, and material incentives for environmental activities.

Open Forest Protocol

Open Forest Protocol (OFP) launched a blockchain solution for accelerating the global response to climate change via (re)forestation initiatives. They've built a system that will allow people to access transparent measurement, reporting, and verification of reforestation and forest conservation projects.

According to a UN report, forests and woodlands are important stores of the planet's warming CO2, absorbing 30 percent of industrial emissions and fossil fuels. OFP consists of a web application for data uploads from the field, a blockchain-based structure for the trust verification of environmental data, and the resultant open-source database upon which climate solutions can be built.

The Open Forest Protocol Ecosystem is built on the NEAR protocol, a climate-neutral layer one blockchain. The blockchain advisor for the project is Igor Stadnyk, CEO of INC4.

WePower

WePower is a blockchain platform built to finance and trade renewable energy. The project aims to help renewable energy producers attract investment by issuing their own tokenized assets. The platform brings together electricity producers and buyers and enables them to purchase energy at a favorable cost.

Power Ledger

Power Ledger is an Australian tech startup that developed the world's first energy trading platform. Using blockchain technology, the company helps people exchange energy, trade green goods, and invest in renewable energy. Users can sell surplus energy from their solar panels to their neighbors or sell stored solar energy.

Blockchain technology can play an important role in providing new technological solutions to address pressing environmental problems. Solutions built using blockchain technology can open new sources of funding for environmental programs, allowing different people to help combat climate change.