Blockchain for Scaling Climate Action: A New Whitepaper Explores the Potential
Bitcoin has faced criticism for its energy consumption, but the impact of blockchain on climate goes beyond that. A recently published whitepaper by the World Economic Forum (WEF) identifies four key areas where blockchain can contribute to climate solutions. The paper, titled “Blockchain for Scaling Climate Action,” is the result of extensive research and collaboration with over 60 blockchain climate organizations.
The whitepaper delves into the potential of blockchain technology for climate action, assessing its risks and benefits and providing policy recommendations. The lead authors of the paper, Anna Lerner and John Hoopes, are available for further inquiries.
While Bitcoin’s energy consumption has been a concern, it’s important to note that not all blockchains have the same impact. Bitcoin’s proof-of-work mechanism is the most energy-intensive, but other blockchains are taking steps to mitigate their environmental footprint. For example, the Ethereum blockchain transitioned to a more energy-efficient proof-of-stake mechanism, reducing its energy consumption by 99%.
Several initiatives and movements are working towards making blockchains more sustainable. The Ethereum Climate Platform (ECP) aims to offset Ethereum’s carbon emissions, while the Crypto Climate Accord is dedicated to achieving a carbon-neutral cryptocurrency sector by 2040. The Climate Collective brings together key players building eco-friendly digital infrastructure for climate action.
Leading global institutions like the World Bank and the United Nations Development Program (UNDP) are also exploring the potential of blockchain for climate action. Blockchain technology can help coordinate global climate action by providing data infrastructure and interoperability standards. It can also improve the credibility of carbon credit markets by ensuring transparency and accountability.
Climate tech startups are leveraging blockchain technology for positive climate impact. Projects like Senken’s carbon credit marketplace, OpenForestProtocol’s monitoring solutions, and Toucan’s infrastructure for tokenizing environmental assets are driving innovation in the space.
Blockchain technology is driving climate action in four key ways. It helps coordinate global climate action, improves the credibility of carbon credit markets, enables fractional ownership of credits, and expands access to climate finance for individuals and smaller organizations.
Toucan, a company focused on unlocking climate action at scale, is building digital infrastructure to grow the voluntary carbon market in a transparent and high-integrity manner. Their platform brings established and nascent environmental assets onto the blockchain, increasing revenue flow to impactful climate projects.