Last year, global leaders discussed the state of emissions at COP26 in Glasgow and tried to find efficient solutions in order to limit the global temperature rise to 1.5 degrees Celsius. The European Commission aims to use blockchain-based innovations to help fight climate change. Blockchain technology could also be used to better trace CO2 emissions and neutralize the carbon footprint.
Every year, the combustion of fossil fuels is adding carbon to the atmosphere, which is increasing global temperatures. We have reached a point where carbon dioxide emissions are the main cause of global warming and climate change. According to a Washington Post investigation, which examined emissions-related reports from almost 200 countries, there were massive discrepancies between declared emissions versus the real amount of greenhouse gases released into the planet’s atmosphere.
Moreover, a report from the Intergovernmental Panel on Climate Change (IPCC) stated that net emissions must be reduced to zero by 2050 in order to stabilize global temperatures and meet a global warming target of no more than 1.5 degrees Celsius. To meet these targets, carbon levels will need to be reduced by 45% from their 2010 levels until 2030, then reaching 0% by 2050 to keep temperature rises below 1.5 °C. What can be done to gather and report CO2 emissions more efficiently, thus helping fight climate change? Blockchain technology can be a solution as it emerges as a powerful tool to help businesses understand what the real emissions numbers are.
Blockchain and greenhouse gas emissions
The European Commission believes that blockchain is a powerful tool that can improve the transparency, accountability and traceability of greenhouse gas emissions. It helps companies provide more accurate, reliable, standardised, and readily available data on carbon emissions. Blockchain can be utilised through smart contracts to better calculate, track and report on the reduction of the carbon footprint across the entire value chain. It can provide instant authentication, verification of real-time data and clear data records.
On the other hand, blockchain technologies can transform individual efforts of companies into a networked effort. The decentralised approach of blockchain provides both breadth and depth. It engages and enables everyone to participate in the calculation. It allows for tracking and reporting of reductions in greenhouse gas emissions along the entire supply chain, including manufactures, suppliers, distributors and consumers.
The steps EU is taking to harness blockchain for climate action:
- promoting the development and adoption of blockchain technologies best suited to overcome the tragedy of the commons and incentivise actors to reduce their carbon footprint and consider the societal impact of their actions;
- developing technical assistance and investment programs that support blockchain-based digital innovations that contribute to climate change mitigation and adaptation;
- accelerating blockchain-based solutions that establish a network between suppliers and consumers, moving beyond the individual to include all societal stakeholders;
- supporting sustainable finance initiatives and promoting the use of blockchain-enabled technologies for financing climate actions through green bonds, fintech solutions and alternative finance mechanisms;
- supporting EU countries and national government agencies to collaborate in the development and adaptation of blockchain-based solutions that support climate actions and the reduction of greenhouse gas emissions;
- developing partnerships with strategic partners, including UN agencies and international financial institutions, such as the World Bank, the European Investment Bank, and the European Bank for Reconstruction and Development;
- supporting the strengthening of the clean technology innovation ecosystem in Europe and improve access to finance for clean technology startups and small and medium-sized enterprises.
Using blockchain to better trace CO2 emissions
Currently, the process of measuring and tracking greenhouse gas emissions is not entirely accurate. First of all, there are numerous data sources, varied regulations and different emissions standards across countries. Also add the diversity of formulas, calculations, and models to measure carbon emissions and you get a better picture of the current situation. As a result, the true numbers might get lost over the course of the measurement and reporting processes, so it shouldn’t come as a surprise that there are significant reporting discrepancies.
The solution to this problem? The latest technologies available on the market. Connected sensors are improving data collection for carbon-emitting equipment located anywhere in the world. Advances in edge computing make it possible for data to be gathered and recorded regardless of the sensor’s location, offering companies a reliable data collection method which they can implement in any region. Thanks to blockchain technology, companies that need a verifiable place to record the emissions data are getting just that.
By reporting carbon emissions across a blockchain network, companies are creating a single platform for carbon measurement, helping to provide a trusted network that can report emissions in an immutable and tamper-proof audit-trail, facilitating connections between all the different participants around a trusted platform that guarantees privacy, security, and traceability. Also, blockchain gives real assurance that the data inputted has not been tampered with and originates from a single source of truth.
Measuring the carbon footprint through smart sensors
Thanks to blockchain technology, we can measure the carbon footprint through smart sensors compatible with IoT. Therefore, it’s possible to calculate energy consumption and generate data which can be analyzed, debugged, and aggregated in the blockchain. The information collected thanks to blockchain technology will be traceable and transparent, representing a great opportunity to neutralize carbon emissions.
How can we use blockchain technology to fight climate change? Through Smart Contracts which calculate, track and report carbon footprint reduction. Blockchain provides instant, real-time authentication, and verification with seamless records, bringing the much needed trust into equation across the whole spectrum – from citizens and companies to governments and organizations which fight climate change – so we can all enjoy a better, cleaner and healthier tomorrow.