Blockchain Technology Will Help The World Go Green

By Linda Rosencrance

IBM (IBM) and the Beijing-based Energy-Blockchain Labs are taking blockchain technology where no other commercial application of the technology has gone before ― the carbon asset market.

The companies have launched what they say is “the world’s first blockchain-based green assets trading platform,” built with the Linux Foundation’s Hyperledger Fabric and deployed using IBM Blockchain.

Currently in use by the carbon asset market in China, the platform will allow enterprises to generate carbon assets more efficiently, in accordance with China’s Carbon Emission Reduction quota and its 2020 reduction goals in keeping with the Paris Agreement.

This is particularly important to China, which is the world’s largest producer of carbon emissions, Cao Yin, chief strategy officer of Energy-Blockchain Labs, said in a statement.

Using smart contract-based transactions, the platform will shorten the carbon assets development cycle and reduce the cost of development by 20 to 30 percent, Yin said.

The blockchain’s immutable ledger will make it easier and less expensive for regulatory authorities to audit and oversee the trading of carbon allowances under China’s cap-and-trade system, a program that has previously raised concerns of fraud in China and other countries.

“Blockchain technology also provides transparency and auditability, which help stakeholders address regulatory requirements,” according to the statement.

Energy-Blockchain Labs and IBM plan to roll out a beta version of the carbon asset management platform on blockchain in May and offer it commercially later this year.

But these organizations aren’t alone in their desire to use blockchain for environmental purposes.

Environmentally conscious people are investigating the use of blockchain technology to improve the sustainability of a number of industries, including forestry, energy, fisheries, organic food and mining, as well as to improve carbon accounting, air pollution monitoring, material recycling and more, according to an article in GreenBiz.

Blockchains could be used to ensure that seafood, lumber and other products that are sold as being environmentally friendly really are.

GreenBiz offers the following example: Ikea wants to sell a desk made from wood cut in a sustainable Indonesian forest. But since Ikea needs to guarantee that the desk contains that specific wood, the company must follow the wood from the time it’s harvested through milling to the finished product.

Currently, the wood products industry handles this with chain of custody (CoC) certification done through annual audits that typically include on-site inspections, sample control of documents and employee interviews.

Although the CoC certification achieves its goal of verifying compliance with the system requirements, it isn’t all that good at detecting fraud or gross errors when it comes to the volumes that are sold as certified.

For that reason, The Programme for the Endorsement of Forestry Certification, responsible for around 740 million acres of certified forests throughout the world, is looking into using blockchain to trace provenance, the GreenBiz article noted.

“Because blockchain records transactions openly and permanently to its ledger, and this dynamic ledger is generally available to anyone who wants a copy, it opens up the whole tracking process to scrutiny while at the same time preventing any monopolistic third party from controlling the system,” according to the article.

Blockchain’s impact is also being felt in the energy sector. For instance, the Brooklyn Microgrid, a solar energy microgrid that relies on blockchain technology, is being formed in one neighborhood in Brooklyn, New York. This microgrid lets neighbors create a peer-to-peer energy trading system so they can trade energy among themselves, according to The New York Times.

The blockchain-based microgrid allows residents and businesses to join an electronic trading platform that lets producers of solar energy sell their excess renewable energy credits directly to neighbors within the microgrid without having to involve the electric company’s energy supply.

These are just a few examples of the way blockchain technology is enabling a sustainable society.

Blockchain technology expert Don Tapscott sums up the blockchain’s influence this way: “I’ve been at this 35 years, writing about the digital age. I’ve never seen a technology that I thought had greater potential for humanity.”

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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