BlockchainsHere’s how Blockchains killer app could be an environmental conservation

The sustainability movement has emerged as a megatrend of the twenty-first century and shows no signs of abating. Record heat in Europe, wildfires in the West of the United States, floods in Pakistan, drought in China, and accelerating ice cap melt in Greenland and Antarctica have brought the looming threat of climate change home to many. Meanwhile, the New York Times declared in December that the sustainable industrial revolution is just getting started, and even heavy industries such as shipping, steel, and plastics are beginning to recognize the importance of an environmentally sustainable future, developing products such as "green steel," a fossil-free steelmaking process. However, challenges remain, such as concerns about transparency, accountability, traceability, trust, data integrity, and even greenwashing (making false or insincere environmental claims.) Or, as the New York Times put it, "Can some of history's most polluting industries be trusted?" Regardless of their good intentions.

This is where blockchain technology may be helpful. Blockchain technology, like the sustainability movement itself, is global, 21st century, and mostly unformed, though it is likely to be shaped soon by new laws and rules. Blockchains have the potential to simplify and reduce the costs of ESG (environmental, social, and governance) reporting, build trust in "collected" data, create new eco-related trading markets, and suggest new sources of innovation. Volkswagen, for example, announced that it would use blockchain technology to help ensure that electric vehicle (EV) charging stations use sustainable sources to recharge their electric vehicles. This move is aimed at consumers who want proof that the energy used to charge their vehicles isn't generated by brown coal-powered electric companies or the like. BMW is said to be working on something similar.

Tokenization to improve market efficiency

Many believe that blockchain technology can improve the efficiency of ESG-related markets, such as the rapidly expanding Voluntary Carbon Market, or VCM, in which parties voluntarily buy and sell carbon credits representing certified carbon removals or reductions of greenhouse gasses (GHGs). Carbon credits can be purchased by corporations to meet their carbon neutrality commitments. Global carbon dioxide (CO2) permits increased by 164% to $851 billion in 2021 from the previous year. Moore adds that scaling Web3 carbon markets faces numerous challenges, including a lack of market standards. The blockchain trilemma is also looming. It is widely assumed that when building networks, developers must choose between three key benefits: decentralization, scalability, and security. They are permitted to have two but not three. As a result, a project may have decentralization and security but lack scalability. Scalability and security, but not decentralization, for example.

Aside from carbon removal

Of course, carbon removal isn't the only application for sustainability. Indeed, a system like Nori's, which employs two assets an NRT as a reference token and NORI as a medium of exchange token could conceivably be used in other ecological contexts, such as ocean plastic recycling in developing countries.