The hype surrounding blockchain has been huge. Over the past two years, proponents of the technology have extolled its wide-reaching potential, projecting that it could account for as much as 10% of global GDP by 2025. But while many have been tempted to see blockchain as a solution for almost everything, there has also been considerable scepticism with regard to its performance and scalability.
Originally devised for the digital currency Bitcoin, it’s since become clear that despite the hype, blockchain does have other potential uses, including innovations to benefit humankind and the environment. And in a report published last month by the World Economic Forum (WEF) in collaboration with PwC and Stanford Woods Institute for the Environment, 65 ways in which the technology can be applied to the world’s most-pressing environmental challenges were identified.
Entitled ‘Building Block(chain)s for a Better Planet’, the report focuses on the ability of blockchain to address issues such as climate change, natural disasters, biodiversity loss, ocean-health deterioration, air pollution and water scarcity. It also identifies certain ‘game changers’, where the technology has the ability to disrupt or substantially optimize systems that are critical to addressing many environmental concerns. These range from decentralizing the management of natural resources such as energy and water, to creating ‘see-through’ supply chains that drive greater sustainability and increase consumer confidence, and providing new finance platforms for green infrastructure projects and to encourage charitable donations for developing countries. The latter could help raise the trillions of dollars needed to finance a shift to low-carbon and environmentally sustainable economies.
And not only are blockchain-enabled solutions currently being explored to improve the sustainability of supply chains, but as recently reported in The Maritime Executive, could help to overcome illegal activities by, for example, tracking fish from “bait to plate,” or commodities like palm oil, beef and soy from “farm to fork.” The publication also reports that blockchain-enabled smart contracts could be used to underpin innovative tenure arrangements that give specific resource rights to communities or fishers.
As with many emerging technologies, there are a number of risks to manage and challenges to overcome. Broadly speaking, the challenges relate to blockchain’s maturity as a technology, regulatory and legal challenges, as well as stakeholders’ trust in the technology and their willingness to invest and participate in applications. However, the WEF report concludes that if utilized in the right way, blockchain has significant potential to enable a move to cleaner and more resource-preserving decentralized solutions, unlock natural capital and empower communities. “If we get it right, it could create a sustainability revolution.”