How Blockchain Could Help Protect The Environment

Blockchain enthusiasts say bitcoin’s core distributed ledger technology could revolutionize modern governments because it is great at tracking complex transactions with nearly infallible security. Dubai and India are already implementing blockchain programs to help reduce fraud, slash bureaucratic paperwork and streamline public records by 2020. Now, some experts are speculating about blockchain's ability help protect the environment.

“The time is ripe for ‘cryptogovernance,’ in which trust, law and enforcement are outsourced to computer code,” Swedish ecologist Guillaume Chapron wrote for Nature. “For sustainability, blockchain technology could be a game-changer.”

There are five main ways blockchain technology could help protect the environment: increasing accountability and transparency, automating economic incentives for eco-friendly practices and reducing waste.

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Several companies are already using blockchain to streamline global supply chains. The New York Times reported Walmart is using IBM blockchain technology to track Chinese pork shipments. From an enterprise perspective, Walmart is interested in avoiding lost or spoiled shipments. With a little nudge from regulators and consumers, the same systems could monitor eco-friendly business practices and offer consumers a detailed history of each product.

In January, the San Francisco-based company Chronicled Inc. launched its mobile app Discover, which uses chips to QR codes to identify everyday objects and creates a simple display of the item’s entire history. Simplicity is crucial here. Who has time and expertise to judge every product’s environmental impact on a daily basis?

On a wider scale, regulatory bodies could use blockchain to track corporate behavior and automate cryptocurrency incentives. “The overall environmental impact of firms or consumers could be recorded on the blockchain and sustainable behavior rewarded through incentives such as tax rebates,” Chapron wrote.

Unlike human regulators, blockchain oversight would be hard to compromise. “Basically, all a blockchain does is assign any piece of information a unique signature,” Wired reported. “If someone alters that information, that unique code no longer works, and you know something fishy is afoot.”

United Nations blockchain pilot programs for distributing humanitarian aid in Jordan and Pakistan show the same principle could be applied directly to funds. “The blockchain could ensure that conservation and development funding is used as intended,” Chapron wrote. “Money can be tracked, attached to a specific purpose, have an expiry date or be released when project milestones are met.”

The fintech startup Ripple has already developed blockchain-inspired payment systems along these lines. Its banking solutions are able to automate quick payments that only release after certain tasks are completed. Right now Ripple sells these services to banks and corporate clients. But the same concept could be applied beyond the private sector. The emerging technology behind these types of smart contracts could help decentralize political power.

“The decisions being made by developers now have moral consequences and will define the space,” blockchain expert and venture capitalist Alyse Killeen told International Business Times about cryptographic regulation. “You can’t compete as a centralized entity against a distributed network.”

Fellow investor and blockchain expert Bruce Fenton trusts blockchain systems to monitor transactions more fairly than human regulators or policymakers. “You don’t want powerful people in this space,” Fenton told IBT. “Code is what matters now.”

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Meanwhile, energy companies like Electron in the United Kingdom and the Singapore Power Group have started using blockchain to reduce waste. Blockchain is great at not only recording energy flow. It can also pinpoint areas where distribution or storage could be more efficient.

“The idea that you have all these connected devices able to talk to each other and optimize their consumption without going through any central hub means that you can now optimize pockets and smaller areas of grid and energy usage,” Electron co-founder Joanna Hubbard told Ensia.

Blockchain technology can also help identify areas where other power sources could be easily integrated into the system, which is a huge challenge for energy companies looking to increase dependence on renewable energy without costly rebuilding efforts. Cryptocoinsnews reported Singapore’s experiment could reduce costs and increase “efficient integration of renewable energy sources onto the country’s electricity grid.”

However, although the Environmental Defense Fund described blockchain as a “disruptive technology” offering new possibilities for clean energy, all this potential still lives in the realm of ideas. Right now, financial institutions and private companies are the dominant players creating new blockchain solutions. It would take a concentrated effort from eco-conscious organizations to develop these ideas into high-tech tools for the real world.