At the UN Climate Change Conference (UNCCC) in May 2017, experts have discussed the impact of blockchain technology on leveraging climate actions. They have concluded, that blockchain could play a crucial role in the fight against climate change.

In this series of articles we want to showcase some specific fields where blockchain could be applied in order to help reduce green house gas (GHG) emissions and ultimately save our planet. But first, let’s take a step back and discuss what blockchain technology actually is and what properties it brings along.

How does the blockchain work?

Put simply, each blockchain consists of a chain of data records that are managed and verified by all computers in a global network, whereas the individual blocks of data records are connected using cryptography by so-called “miners”. The miners are financially dis-incentivized to abuse their power as validators by a consensus algorithm called “Proof-of-Work”. A copy of all previously created data records will be stored on each connected computer (aka “nodes”). Thus, a falsification or even deletion of the data is no longer de facto possible. In this way, bitcoins, for example, can be saved and transferred quickly and securely.

Properties of blockchains

Because of its distributed nature, blockchains have certain properties such as:

Immutable

Transparent

Decentralized

Secure

As a result, blockchains can be used to mitigate trust and dis-intermediate third parties that are usually needed to bring trust to certain markets.

Leveraging climate actions

Given the properties of blockchains, the technology could vastly improve governance and sustainability climate change activities. As opposed to centralized, blockchains prevent monopolistic control over a system. The technology also records transactions openly and permanently, thus fostering transparency and traceability.

The United Nations Climate Change (UNFCCC) secretariat recognizes the general potential of Blockchain technology. In particular, transparency, cost-effectiveness and efficiency advantages, which in turn may lead to greater stakeholder integration and enhanced creation of global public goods are currently viewed as the main potential benefits.

Huge potential in various industries

Blockchain technology is poised to enable individuals and government groups to fight climate change by allowing them access to better monitoring tools and models for their individual energy consumption and contributions to factors such as air pollution. In the next article we will look at specific areas where blockchain has the highest potential of supporting climate actions.

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