Blockchain: A Catalyst for Environmental Protection
Over the last few years, governments and organizations worldwide have focused on using various technological tools to mitigate climate change and biodiversity loss challenges. One such tool that could be highly effective in tackling the climate crisis is blockchain1. Even though blockchain is well known for the technology behind cryptocurrencies such as Ethereum and Bitcoin, environmental researchers are now finding its use in solving the climate crisis, ranging from tracking the sustainability of products to monitoring pollution1.
Blockchain Technology and Its Environmental Potential
Blockchain technology has often been criticized for its impact on the environment, particularly when it comes to proof-of-work (PoW) chains like Bitcoin. However, proof-of-stake (PoS) chains are much more energy-efficient. For instance, the Ethereum network recently transitioned to PoS, resulting in over a 99% reduction in energy consumption1.
As an emerging technology, blockchain could play a pivotal role in numerous environmentally-focused initiatives by: 3
Averting or reversing the effects of climate change.
Slashing levels of carbon emissions.
Supporting the adoption and use of renewable energy options.
Improving systems dedicated to waste management.
Safeguarding our planet's natural resources3.
Specifically, blockchain aids in tracking and verifying environmental metrics for sustainability claims, ensuring that companies can meet their sustainability goals with greater transparency and accountability4.
How Blockchain Works for Environmental Protection
Blockchain technology is a distributed ledger that records transactions in a secure and transparent manner. Each transaction is grouped into a "block," and these blocks are linked together in a chronological "chain." This chain is replicated across a network of computers, making it difficult to alter or tamper with the data.
In the context of environmental protection, blockchain can be used to track various environmental data, such as carbon emissions, waste disposal, and resource usage. This data can be recorded in a secure and transparent manner, making it easier to monitor and verify environmental performance.
For example, a company can use blockchain to track its carbon emissions throughout its supply chain. This data can be used to identify areas where emissions can be reduced and to demonstrate compliance with environmental regulations.
Blockchain Applications for a Greener World
Supply Chain Transparency
Blockchain can be used to track products from the manufacturer to the shelf and help prevent waste, inefficiency, fraud, and unethical practices by making supply chains more transparent5. This helps consumers to make informed choices, promoting responsible consumption and ultimately lowering the overall environmental footprint of production6. They can also help consumers be better informed of how each product was made and shipped so they can make more environmentally friendly choices5. If we tracked food, for example, this would enable buyers to purchase local produce knowing that it was actually grown locally. This would also cut down on carbon emissions due to food not having to travel long distances. Blockchains could ensure that a fish being sold at a fish market actually came from a sustainable fisherman, or verify that a bag of coffee really came from a fair trade producer5.
By leveraging blockchain technology for clear monitoring of products throughout their lifespan, we are able to fortify these dimensions of sustainability. This comes through giving insights into product origins, modes of transportation involved and credentials pertaining to sustainability3.
Furthermore, blockchain facilitates the creation of a Digital Product Passport (DPP), a digital record that documents a product's lifecycle from inception to end-of-life7. This passport plays a vital role in a product's pre-sale, post-sale, and post-life stages, promoting transparency and enabling consumers to make informed decisions about the products they purchase.
Sustainable supply chains can be enhanced by: 3
Promoting adherence to fair employment standards.
Facilitating a more even distribution of profits.
Aiding in the eradication of human trafficking and other illegal practices by providing traceability and authentication for goods and related documents within the supply chain ecosystem.
Renewable Energy Trading
Blockchain technology is making a significant impact in the renewable energy sector, particularly by enabling peer-to-peer transactions of clean energy3. Blockchain simplifies the trading of renewable energy certificates (RECs) and enables peer-to-peer renewable energy trading platforms, driving the adoption of clean energy solutions6. This has the potential to change the energy sector by enabling the adoption of clean and renewable energy sources6. Blockchain facilitates the efficient exchange of RECs, making renewable energy more accessible and affordable. This, in turn, reduces our dependence on fossil fuels and subsequently lowers carbon emissions6. The incorporation of blockchain technology into the trading systems for renewable energies significantly improves transactional transparency and security levels—a step forward toward a future dominated by seamless exchange mechanisms for clean power sources3.
For example, homeowners within Uttar Pradesh, India have successfully adopted blockchain solutions to trade solar electricity among their local grid network users—providing tangible evidence of blockchain's efficacy in regional renewable energy projects and markets3.
Carbon Credits and Emissions Tracking
In the fight against the growing threats posed by climate change, blockchain technology emerges as a potential ally. This innovative tech can revolutionize how we manage and document carbon emissions data, thus playing a pivotal role in combating global warming3. Blockchain's inherent transparency and unchangeability bolster trust in environmental commitments made by corporations by providing an indisputable ledger for monitoring their progress toward ecological sustainability3.
Blockchain technology offers a highly promising tool in the battle against climate change by providing meticulous tracking of carbon emissions and managing transactions related to carbon credits3. The inherent transparency, security, and permanence offered by blockchain forms an ideal platform that assures consistent data access for all stakeholders involved in carbon balances, which is critical for upholding both integrity and clarity within the expansive market of carbon credits3.
Utilizing smart contracts on the blockchain simplifies monitoring of carbon production automatically while ensuring records regarding environmental actions remain accurate without any possibility of tampering due to blockchain's unchangeable nature3. Even as companies report their carbon emission standards and levels, they can safeguard sensitive information through zero-knowledge proofs generated by this advanced technology—creating indisputable validation without exposing proprietary details3.
Blockchain can help track and verify carbon reduction initiatives and facilitate the trading of carbon credits8. Carbon credits allow us to offset carbon emissions by supporting projects that reduce or capture an equivalent amount of greenhouse gasses. Blockchain makes the management and trading of carbon credits easier6. It lets companies openly record and verify their carbon reduction initiatives on a blockchain, ensuring trustworthiness. It also minimizes the chance of double-counting. Additionally, individuals can purchase carbon offsets directly6. It simplifies the process for both individuals and organizations to participate in emissions reduction6.
Furthermore, blockchain can facilitate micro-carbon markets by enabling the fractional ownership of carbon credits, allowing smaller investors to participate in carbon markets9. By tokenizing carbon credits and allowing for fractional ownership, blockchain platforms can democratize access to carbon markets, potentially increasing funding for sustainable projects and broadening the base of market participants9.
An example of blockchain's contribution to environmental sustainability is its application in the carbon credit market, where it can tokenize and digitally distribute environmental assets, drawing attention to the growth of this market and the involvement of leading organizations and international bodies3.
Waste Management
Blockchain improves waste management by providing real-time tracking and verification of waste disposal and recycling processes. This helps municipalities and organizations optimize waste management practices, reduce inefficiencies, and minimize landfill waste6. This improves waste management effectiveness and reduces the environmental impact associated with improper waste disposal6.
Environmental Incentives
Some blockchain projects are looking into the idea of creating environmental credits and rewards in the form of tokens or credits. People and organizations can earn these tokens by adopting eco-friendly practices like saving energy or actively engaging in clean energy projects6.
As this research shows, technology can help in conservation and incentive practices such as conservation finance, tokenized rewards for ecosystem services, and rewards for sustainable practices7.
Sustainable Farming
Blockchain can track and verify sustainable farming practices. By documenting data on crop cultivation methods, pesticide usage, and water management, consumers can make informed choices about their purchases6.
Wildlife Protection
Blockchain technology can be used in wildlife conservation to verify and track efforts aimed at protecting endangered species and their habitats. It lets donations for wildlife conservation be recorded transparently on a blockchain6.
Blockchain can also help combat illegal wildlife trade7. As an immutable distributed ledger, blockchain could provide a tamper-proof system to track wildlife components from source to final sale. All participants in the supply chain, from poachers to retailers, could be recorded on the blockchain, making it more difficult to disguise the origins of trafficked wildlife products7.
Case Studies of Blockchain in Environmental Protection
Renewable Energy
WePower: WePower is a blockchain platform created to fund and trade energy from renewable sources. The project aims to help renewable energy producers attract investment by releasing their own tokenized assets. The platform unites energy manufacturers and buyers and enables them to purchase energy at a very competitive cost10.
Power Ledger: Power Ledger has developed an asset ownership model that will accelerate renewable energy growth to increase the share of green energy in the world. The Asset Germination Event project can be a solar, wind or battery farm10.
Sun Exchange: The Sun Exchange company provides relevant organizations or businesses with the opportunity to switch to solar energy10.
Waste Management
Plastic Bank: Canada-based company Plastic Bank is a social enterprise with a goal to use recycling to reduce plastic in the ocean and fight global poverty. Plastic Bank pays people to collect plastic, thereby preventing it from getting into the ocean10.
Energy Infrastructure
Electron: Electron is a London-based energy company that uses blockchain technology to design and create digital infrastructure for the energy industry. The company is developing platforms for trade and identification that will facilitate the transition to cheaper, cleaner and more sustainable energy systems10.
Blockchain Platforms and Technologies Used in Environmental Protection
Sustainable Blockchain
Sustainable blockchain refers to blockchain networks and technologies designed to minimize their environmental impact while maintaining the core benefits of decentralization, security, and transparency11. The goal is to create blockchain systems that are not only efficient and effective but also environmentally responsible11. This involves addressing the energy consumption and carbon footprint associated with traditional blockchain networks, particularly those that use proof-of-work (PoW) consensus mechanisms11.
Proof-of-Stake (PoS)
Proof of Stake has emerged as an environmentally friendly option to Proof of Work. It offers a potential reduction in energy expenditure for blockchain networks by as much as 99%3. This shift towards sustainability isn't merely hypothetical. Ethereum's adoption of a PoS consensus mechanism led to its own energy consumption plummeting by 99.9%3. Various other blockchains such as Algorand, Fantom, MobileCoin, and Electroneum have also joined this endeavor toward sustainable development3.
Layer 2 Solutions
Layer 2 solutions including sidechains and off-chain networks considerably contribute toward minimizing the ecological impact associated with blockchain activities by alleviating processing demands placed upon the main Layer 1 chain3.
Research Methodology
This section provides information about the research methodology used in the research papers mentioned in this article. One study followed the Descriptive Research Method and used a Literature Study approach to gain insights7. Secondary data was collected through a comprehensive literature review to identify existing knowledge and current trends in applying blockchain technology for ecological and environmental applications. Various online databases were used to access journals and academic books to gain insights7.
Benefits and Challenges of Using Blockchain in Environmental Protection
The Role of Governments and NGOs in Promoting Blockchain for Environmental Sustainability
Governments
Governments and regulators globally are actively considering or preparing new requirements for environmental, social and governance (ESG)-related disclosures by corporate and other entities13. The standards outline requirements for detailed corporate reporting on environmental and/or social impact13.
The European Union has taken the lead in formally looking for ways to harness blockchain for climate action; for this purpose, in 2018, the European Blockchain Partnership was created to leverage “blockchain to create cross-border services for public administrations, businesses, citizens and their ecosystems to verify information and make processes more efficient.” 13
NGOs
Entities such as the ID2020 Alliance along with corporations like Maersk and BHP are integrating blockchain within their frameworks aimed at promoting social sustainability3. This underscores an increasing awareness about digital distribution and how this technology can be pivotal for engendering social transformation3.
The CIFAR Alliance is dedicated to advancing tech-enabled climate finance solutions for vulnerable people and the planet1. The Alliance aims to strengthen the ecosystem for inclusive finance innovation in climate action for the equitable betterment of all people, the planet, and prosperity1.
Conclusion
Blockchain technology has the potential to revolutionize environmental protection by increasing transparency, efficiency, and accountability in various applications. While challenges such as energy consumption and scalability need to be addressed, the benefits of blockchain for environmental sustainability are undeniable. With the increasing involvement of governments, NGOs, and corporations, blockchain is poised to become a crucial tool in the fight against climate change and environmental degradation.
This report has explored the various applications of blockchain in environmental protection, including supply chain transparency, renewable energy trading, carbon credit tracking, waste management, and wildlife protection. It has also highlighted the benefits and challenges of using blockchain in this field and the role of governments and NGOs in promoting its adoption. As blockchain technology continues to evolve and mature, it is expected to play an even more significant role in creating a sustainable future for all.
To learn more about blockchain and its potential for environmental protection, you can explore the resources provided by organizations such as the CIFAR Alliance, the World Economic Forum, and the United Nations. You can also get involved in blockchain-based environmental initiatives by supporting projects that use blockchain to track carbon emissions, promote renewable energy, or reduce waste. By taking action, we can all contribute to a more sustainable future.
References
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2. Sustainability and Blockchain: A Better Future - LCX, accessed on March 1, 2025, https://www.lcx.com/sustainability-and-blockchain-a-better-future/
3. Green Ledgers: How Blockchain Technology is Paving the Way for Environmental Sustainability - Infuy, accessed on March 1, 2025, https://www.infuy.com/blog/green-ledgers-how-blockchain-technology-is-paving-the-way-for-environmental-sustainability/
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6. Decoding Blockchain Environmental Impact: A Greener Perspective - Webisoft Blog, accessed on March 1, 2025, https://webisoft.com/articles/blockchain-environmental-impact/
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8. Blockchain in Smart Cities: A Path to Environmental Sustainability? - Earth.Org, accessed on March 1, 2025, https://earth.org/blockchain-in-smart-cities-a-path-to-environmental-sustainability/
9. How Blockchain is Revolutionizing Carbon Markets | by Eddie TSUI, CESGA® | Medium, accessed on March 1, 2025, https://medium.com/@eddie.hc.tsui/how-blockchain-is-revolutionizing-carbon-markets-62d8fa86e4db
10. Top 5 blockchain projects for ecology - digiforest.io, accessed on March 1, 2025, https://digiforest.io/en/blog/5-blockchain-eco-cases
11. Sustainable Blockchain: Reducing Environmental Impact - Rapid Innovation, accessed on March 1, 2025, https://www.rapidinnovation.io/post/sustainable-blockchain-green-innovations-environmental-impact-2024
12. Is blockchain able to enhance environmental sustainability? A systematic review and research agenda from the perspective of Sustainable Development Goals (SDGs) - ResearchGate, accessed on March 1, 2025, https://www.researchgate.net/publication/354581271_Is_blockchain_able_to_enhance_environmental_sustainability_A_systematic_review_and_research_agenda_from_the_perspective_of_Sustainable_Development_Goals_SDGs
13. Guidelines for Improving Blockchain's Environmental, Social and Economic Impact - www3 .weforum .org /docs /WE, accessed on March 1, 2025, https://www3.weforum.org/docs/WEF_Guidelines_for_Improving_Blockchain%E2%80%99s_Environmental_Social_and_Economic_Impact_2023.pdf