Ways Blockchain will allow the World to act against the Climate Crisis
Since the world failed to halt global warming half a decade after countries signed the Paris Agreement, experts have predicted that global warming could exceed the thresholds that were agreed upon, with highly disastrous consequences. As the world faces a climate crisis, it will also face a problem in climate governance. We need to know what should be done to stop climate change, but we don’t have any idea how we can get there. There are new mechanisms required.
what is blockchain? a technology that can potentially boost the cooperation of the world to work to improve the climate. The data structure that blockchain has worked on storing information in a series of blocks linked cryptographically and simultaneously distributed to all the network’s participants. On the blockchain, tamper-resistant information is stored to generate a source of truth for any type of information. Blockchain technology has building blocks for what they call decentralized autonomous organizations. These were criticized and discussed being possible mechanisms of alternative governance at a national level. However, this decentralized organization will have so many more benefits at the international level.
Imagine an organization with a decentralized climate that has a basis on the blockchain. It states that individuals or companies can participate and interact, facilitated by smart contracts. Smart contracts involve the pieces of computer code that run on top of the blockchain, which is why they are virtually unstoppable. A standard token can allow climate commitments according to states linked with the individual climate action and transnational climate initiatives and their flourishing system. With this kind of organization, the world would go together and act against climate change in the following ways.
Increase in ambition
It is not enough to do business as usual when you want to tackle the impending climate crisis. With a decentralized climate organization, progressive transnational bodies can purchase transformation that is pro-climate in lagging nations.
As an example of this, global businesses like Walmart, ExxonMobil, Google, Apple, Shell, BP, and other companies have criticized the decision of the US to withdraw from the Paris Agreement. Being under a decentralized climate organization could have allowed them to devise intelligent contracts that offer compensation to workers to get a more robust US government commitment in exchange for the decarbonization of the economy.
Enforcing of commitments
The topic of climate change has so many broken promises. When Past US President Donald Trump withdrew from the Paris Agreement, other countries got worried that the COVID-19 pandemic could thwart the efforts of the government to honor commitments related to the climate. Because of intelligent contracts, the risk of going on a backslide can be mitigated by blockchain technology as long as the states have their commitments underpinned with a monetary deposit. When conditions are unable to comply with their targets in emission reduction, what they deposited will be taken and redistributed as green coins to countries that could decrease carbon emissions through climate action such as planting trees.
It would only be possible for commitments to be enforced more effectively through intelligent contracts when resources could stake upon their obligations. The elimination of uncertainty in enforcement has the added benefit of enticing highly ambitious commitments in climate from those who feel concerned that they are cheated upon by those who are more powerful.
Boost in Transparency
To act coordinately against climate change, you need to have better information. A vital task is to make sure that various stakeholders are not claiming carbon credits for the same activity in carbon offsetting, like two companies giving payment for the same forest planting.
The Pacific Alliance nations are now piloting the publicly shared digital ledger of carbon credits to avoid double-counting. It can offer a better and more cost-effective solution than a central agency that settles the transactions of carbon credits. The other highly challenging task would involve the verification of activities in offsetting carbon happened. Combining blockchain technology with the internet-of-things (IoT) device can help in tapping new sources of information. Aside from that, smart contracts provide a way to efficiently reward vital tasks like having adaptation measures and emission reductions verified at a local level.
The other benefit that this approach has is that it allows the demands to become transparent. This can help less powerful bodies to have corporations held on their account on pledges related to the climate. As an example, Microsoft announced that they would invest $1 billion so that their enterprise would become carbon-negative. It may be good, but it can just be rhetoric. If Microsoft underpinned this pledge with a smart contract with an appropriate stake, it would eventually become inevitable with great benefits to those with fortunes that depend on great players like Microsoft when they follow through on what they have promised.
A decentralized climate organization can combine the billions of resources and have the efforts united to combat climate change. Anyone in the blockchain network connects to the system that can earn green coins if they plant trees, similarly to “mining” in the design of Bitcoin. It will become profitable as there is real value in green currencies linked to the states with monetary resources staked on these and their international commitments. People may also buy green coins if they want to help in supporting climate action. By increasing the green coins’ exchange value, these people would give more incentives for the faster planting of trees. Blockchain technology can ideally be suited in automatically settling transactions, as long as the proper verification and incentive systems have adequate decentralized verification underlying in place.
Absence of Panacea
It is undeniable that climate governance based on blockchain has theoretical benefits. However, there will be significant obstacles before you can realize it. As blockchain ensures that previously recorded information is tamper-proof, it cannot do enough to ensure that the data will be brought to a trusted blockchain. Chainlink is among the startups that proposed decentralized information networks to feed an excellent answer to this issue. However, it can be challenging to search for suitable solutions for specific applications. A climate organization based on blockchain may not succeed if the key players have opted not to become a part of it. Influential organizations and states may become especially unwilling to become a part of a system that allows broken promises to become transparent, as this can automate the process of punishment. However, as long as the momentum is enough, they may slowly get incentivized to become a part of it.
For climate governance, a virtual entity may also require that people accept governance by algorithms, which is the most complex challenge right now.
