By The World Economic Forum (“WEF”) recently published a report on blockchain and the way in which blockchain technology could be used to better manage environmental resources and improve sustainable economic growth. According to the WEF, blockchain is more than just a tool to enable digital currencies. Blockchain is “a new, decentralized and global computational infrastructure that could transform many existing processes in business, governance, and society”.
As the foundational emerging technology of the Fourth Industrial Revolution, blockchain has the potential to address pressing environmental challenges. Due to the fact that blockchain could change and potentially upend traditional economic systems, it is thought that blockchain could dramatically improve current systems and approaches in order to transform the way humans interact with the environment.
The WEF conducted its research and analysis with a wide range of stakeholders at the forefront of applying blockchain across the industry, big tech, entrepreneurs, research and government. Based on its research, WEF found that if used in the right way, blockchain could transfer value from shareholders to stakeholders, unlock natural capital, empower communities and create environmentally cleaner and resource-preserving decentralized solutions.
Blockchain Use Cases and Game Changers
The WEF has identified some of the world’s most pressing environmental challenges to be climate change, natural disasters, biodiversity loss, ocean-health deterioration, air pollution, and water scarcity. According to the WEF report, there are more than 65 existing and emerging blockchain use-cases and eight game-changing solutions where blockchain can be applied to address these environmental challenges.
One such example of these game changers is automatic disaster preparedness and humanitarian relief. It is proposed by the WEF that blockchain technology could underpin a new shared system for participants involved in disaster relief efforts. By creating a decentralized system in which multiple parties could share information and rapid automated transactions via smart contracts, it would improve the efficiency, effectiveness, and coordination of resources in the immediate aftermath of disasters. Such a system would be vital in assisting and improving relief efforts during the most critical time of a disaster which could limit the loss of life and other adverse human impacts.
Other such blockchain solutions include see-through supply chains, decentralized and sustainable resource management, new sources of sustainable finance, incentivizing circular economies and more.
Realizing the Financial and Non-Financial Value
Recently blockchain has received considerable hype regarding its potential to create far-reaching economic impact, with projections that blockchain could account for as much as 10% of global GDP by 2025. At present the crypto markets have yet to disrupt centralized systems, however, it is believed that once the technical limitations of blockchain technology and the regulatory and legal challenges have been met, blockchain will become widely adopted.
The widespread adoption of blockchain will have clear financial benefits to the global economy but there is also a non-financial value to be realized by blockchain. The WEF noted that “the challenge for innovators, investors and governments is to identify and scale these pioneering innovations both for people and the planet”. On its own, blockchain is not necessarily transformational for the environment. However, the potential of blockchain to help solve environmental challenges can be amplified by the establishment of a responsible global blockchain community which is concerned with using this technology to help tackle environmental challenges.
Do you believe blockchain can be used to help the environment? Or are these aspirations limited at best? Let us know in the comments below.
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