Climate change has become one of the main (if not the main) global concerns. And although currently problems such as inflation, the increase in the cost of living or the war in Ukraine are very worrying due to their short and medium-term consequences, the environment is among the five main concerns for the inhabitants of all continents.
In this context, new technologies and technology companies are positioning themselves at the forefront when it comes to designing solutions capable of mitigating carbon emissions, promoting the use of renewable energies and helping organizations better understand their ecological impact and How can they reduce their environmental footprint?
In the crypto field, more and more voices are talking about how the use of blockchain technology could play a prominent role in this process, favoring, for example, more transparency in the management of emissions or more traceability in the supply chain. supply.
Creation and management of emission credits
Carbon credits have become the unit of measurement most used by the industry to quantify the emission of greenhouse gases. A “carbon credit” is equivalent to one metric ton of carbon dioxide (or other “toxic” gas) and is issued in association with emission reduction projects.
Once the credit is issued, it can be acquired, sold and exchanged in the financial markets, so that companies that want to commit to reducing emissions usually act with a double strategy: on the one hand, they implement energy projects, for example renewable while on the other, they acquire these credits with which they somehow “offset” their emissions.
The management of these credits could be much more transparent and effective if their traceability were based on Blockchain. All carbon credit transactions could be tracked in real time and documented using the blockchain, preventing fraud in this market and ensuring the intended use of carbon credits.
Promote the use of renewable energy
The decentralized infrastructure of the blockchain could also end up being an incentive to promote the use of clean and renewable energy.
Energy companies or utility companies could use the blockchain to directly buy and sell renewable energy with each other, avoiding intermediaries, favor the entry of other companies and consumers and promote the adoption of clean energy such as solar or wind, reducing dependence on fossil fuels.
On the other hand, the supply chain management is another area where blockchain can help companies cope with climate change. In this sense, companies can reduce their carbon footprint by using the blockchain, to track the carbon footprint of products and materials throughout the entire chain. By promoting sustainable production and consumption practices and having greater traceability, they can select suppliers committed to reducing emissions and using clean energy, thereby reducing greenhouse gas emissions as a whole.
Monitoring and reporting of carbon emissions from numerous sources such as businesses, vehicles, and structures can also be done using blockchain technology.
Governments and organizations could more accurately measure and report their emissions and monitor progress toward their emissions reduction targets using this technology to report emissions tracking.
But while blockchain can certainly be used effectively as a technology to add transparency to the fight against climate change, its implementation is not without difficulties. First, all parties should commit to using common, standardized rules for measuring emissions in the same way and managing carbon credits. Furthermore, in its current state of development, the Blockchain still has a scalability problem. Many networks only have a modest capacity when it comes to managing a large number of transactions and if a project of this size were to be promoted on a global scale, it would not take long for us to end up in different bottlenecks.
Finally, the fact that this is still an energy-intensive technology and perhaps its potential benefits when managing these markets should not be underestimated, end up being mitigated by total energy consumption.
Still, it is worth remembering that blockchain-based technologies are still in their “infancy” and these technical hurdles can be expected to be surmountable in the medium term. Many experts, taking all this into account, believe that investing in the chain of blocks can accelerate the shift to a low-emissions economy, driven by greater transparency, efficiency, and accountability in the regulation of emissions.