In November 2019, The Next Web reported that Nestle and Carrefour are planning to use blockchain technology in order to track baby milk products and provide consumers with data on their origins and movements “from dairy to shelf.” In October, China’s President Xi Jinping urged the acceleration of blockchain technology. These are just two examples that, from my perspective, indicate the tech wave “Blockchain 2.0” is all set to reshape every industry in 2020.
While smart cities and smart technologies are accelerating at a high momentum, there has been an increasing need and public conscience to embrace rapid and sustainable practices due to the climate change crisis. Be it the unprecedented fires in the Amazon rainforest, California and Australia or the air pollution threat in Delhi, India, the need to “go green” has become more pronounced.
In this evasive call for sustainable living, how and where does blockchain fit in? A 2018 World Economic Forum report, Building Block(chains) for a Better Planet, stated that a total of 65 blockchain cases could repair some of the world’s global environmental challenges. Blockchain, a tool that facilitates digital currencies, is now being looked at as a decentralized and global computational infrastructure that could transform existing processes in business, governance and society at large.
As the cofounder and CEO of a software development firm with a vision to explore new ways to innovate, I plunged into blockchain a couple of years ago. My firm built proofs of concept to ideate solutions around issues of transparency, duplicity and the like for various industries.
In today’s context, climate change is a very real problem that needs to be addressed. With a responsibility to future-proof through tech guidance and know-how, and having worked with customers in this space, my team has been able to identify sustainable methods. Now, I will dive into these cases that I believe could help achieve sustainable living and, in the long-run, balance climatic conditions and reduce threats.
1. Tokenizing Energy
This is a method where a reliable customer-to-customer network is established to allow easy exchange of energy between suppliers and consumers. To increase the likelihood of renewable energy source adoption, the network, built with blockchain applications, can incentivize through credits in return for sustainable actions by the consumers. For example, collecting plastics from the ocean, recycling or conserving renewable resources can be exchanged for food, water or any other day-to-day supplies that hold monetary values.
2. Driving A Circular Economy
By introducing blockchain at a broader and inclusive three-way approach in supply chain functions across sectors, communities and individuals, we will be able to drive a circular economy. Keeping track of the ways in which raw materials and natural resources are procured, traded and consumed at the core helps in deriving financial value from things that are wasted, discarded or treated as not economically valuable in the center. This, in turn, creates awareness and instills a widespread behavioral change to adapt minimal resources at the bottom.
A circular economy not only provides visibility to all the stakeholders, but also creates a closer connection between consumers and small businesses, thereby setting a foot on an inclusive economy that encourages actions aimed to mitigate environmental impact.
3. Recording Asset Ownership
Global supply chains have long been known to be traditionally complex and fragmented, often plagued with issues such as the lack of absolute transparency. By recording asset ownership on a blockchain, the number of resources being extracted from the ground at a certain point in time or the levels of air and water pollution recorded by a certain factory outlet can be integrated into a single and secure data flow that can be made available to any interested party. This largely helps resource management for civic authorities and civilians on how to make more educated and environmentally conscious decisions.
4. Tracking Provenance
The impact of climate change on the agriculture, food and beverage sectors poses considerable risks to growing climatic conditions. In this already complicated dynamic, attempting to improve sustainability makes it crucial to understand and devise ways to seek surging transparency in supply chains. Scouting for information around the things we buy, ranging from origination to packaging, can lead us into a proverbial black hole.
With the very nature of blockchain being open, incorruptible and decentralized, it helps in empowering every stakeholder in the supply chain with information and foster greater equality throughout the process. It also facilitates seamless and meaningful interactions between all the stakeholders, thus allowing data to flow seamlessly from the producer through to the consumer.
Are there challenges to consider?
For blockchain to make a successful case for environmental sustainability, it is important to take stock of certain considerations and limitations. Hence, the primary challenge with blockchain adoption is its limited scope of scalability. Firstly, blockchain is a high-energy-consuming technology that requires large infrastructural models to function efficiently and process transactions.
Therefore, in countries with poor internet facilities and energy infrastructure, blockchain might not serve the purpose as much as it intended to. As much as it shows potential to deliver remarkable results in terms of supply chain sustainability, it makes mammoth energy consumption a mandate.
Yet another aspect to consider is that blockchain is still relatively new in terms of being explored for its complete potential. The tricky relationship between blockchain and sustainability is proof of how complex sustainable solutions can be.
The Bottom Line
Considering blockchain’s full potential cannot be traced into the future and set in stone, one can place their cards quite comfortably at the moment on its ability to provide a verifiable record on who exchanges what with whom—and therefore who has what at a given time. In a complicated world where various parties struggle to place enough good faith in one another to work together on solutions, systems that generate trust will lay the foundation for progress and sustainability. And from my perspective, blockchain is taking charge and competing rather strongly.