Why Greta Should Love Blockchain
Blockchain can enable a platform for immutable reporting of carbon emissions from all energy production and consumption units, ranging from power plants to factories, vehicles and more
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Bitcoin's carbon footprint once again reached headlines after world leaders flocked to the 2021 United Nations Climate Change Conference (COP26), in search of a global agreement to reduce carbon emissions and protect the environment.
Prior agreements, such as the Paris Agreement, an international climate change treaty adopted in 2015, created a centralized global regulatory framework for countries to adopt in order to reduce carbon emissions. However, eventually led to messy and fragmented carbon assets data, fraught with double-counting, data mistakes, and signs of fraudulent behavior as it relates to tracking and reporting. The issue was that this centralized approach to collecting and analyzing data, enabled fraud, data manipulation and deceit.
Fast forward, and we see that the World Bank's Climate Warehouse is discussing the construction of a 'public-good' data layer on top of a blockchain, in order to audit and report carbon assets in a centralized manner. Yet, could a centralized approach be fully transparent when controlled and constantly monitored by the authorities empowered to present the data according to their preference? As the Paris Agreement showed, a centralized attempt to tackle carbon emissions will most likely face significant challenges of data unreliability.
In contrast, a blockchain reporting system could provide a practical solution to tackling potential issues of reporting energy consumption and carbon emissions. The major goal of blockchain is to provide a transparent, effective and interoperable technology solution with all the necessary data shared and accessible.
Blockchain can enable a platform for immutable reporting of carbon emissions from all energy production and consumption units, ranging from power plants to factories, vehicles and more. Surprisingly, or not, the technology is already available. The solution is based on connecting all current emission sensors to the blockchain, in parallel to local emission tracking platforms, if any. That would provide an immutable snapshot of global carbon emissions that can be publicly audited in real-time to monitor and track changes and their effects.
Naturally, some difficulties may arise as not all carbon emissions are tracked, countries would be hesitant to share exact power production and consumption data, privacy matters will surely be of concern and the list goes on. Needless to say that the enemy of the good is the perfect, but in this case a decentralized solution is much more reliable than current given options.
Whether you believe in climate change or not, the global regulatory environment in the wake of this movement could require a massive shift of production and consumption levels of many goods. Blockchain can provide a reliable platform for tracking carbon emission measurements, and subsequently the base for a global incentives or penalties mechanism. Monitoring or recording emission data directly onto the blockchain will ensure that on a global level, regulatory aspects are met and data is not manipulated once logged. That way, next time world leaders fly on their carbon emitting private planes to meet each other, they will at least have the correct immutable data on carbon emissions to discuss among themselves.