A new World Economic Forum report recently released has identified more than 65 ways blockchain can be applied to the world’s most serious environmental challenges and the report calls for new global platforms to incubate ‘responsible blockchain ecosystems’ rather than just individual applications or companies.
Produced in collaboration with PwC and released at the Global Climate Action Summit in California, Building Block(chain)s for a Better Planet also identifies eight game-changers where the technology can fundamentally transform the way the world manages its natural resources. These range from decentralizing management of natural resources such as energy and water, to creating more transparent supply chains that drive greater sustainability, and providing new mechanisms for raising the trillions of dollars that will be needed to deliver low-carbon and sustainable economic growth.
“Blockchain’s potential to fundamentally redefine how business, government and society operate has generated considerable hype,” said Sheila Warren, Head of Blockchain and Distribute Ledger Technology at the World Economic Forum’s Centre for the Fourth Industrial Revolution. “Despite this hype, there are many challenges to overcome – it is still a nascent technology undergoing rapid development. Now is the right time for stakeholders to work together to ensure the development of responsible blockchain solutions that are good for people and the planet.”
Celine Herweijer, Partner, PwC UK, added: “It is important for anyone thinking about developing or investing in a blockchain application for the environment to take a step back and ask three essential questions: will blockchain solve the actual problem, can downside risks or unintended consequences be acceptably managed, and has the right ecosystem of stakeholders been built?”
Blockchain-enabled solutions are currently being explored to improve the sustainability of global supply chains and could help overcome illegal activities by tracking fish from “bait to plate”, or commodities like palm oil, beef and soy from “farm to fork”. Such transparency is vital in influencing consumer decisions, updating supply chain practices and triggering new governance arrangements. Blockchain-enabled smart contracts could, for instance, be used to underpin innovative tenure arrangements that give specific resource rights to communities or fishers.
According to the report, these and other opportunities have been largely untapped by developers, investors and governments, and represent an opportunity to unlock and monetize value that is currently embedded in environmental systems.
If harnessed in the right way, blockchain has significant potential to enable the transition to cleaner and more resource-preserving decentralized solutions, unlock natural capital and empower communities. This is particularly important for the environment, where the tragedy of the commons and challenges related to non-financial value are prevalent.
“If history has taught us anything, it is that these transformative changes will not happen automatically,” said Dominic Waughray, Head of the World Economic Forum’s Centre for Global Public Goods. “They will require deliberate collaboration between diverse stakeholders ranging from technology industries through to environmental policy-makers, and will need to be underpinned by new platforms that can support these stakeholders to advance not just a technology application, but the systems shift that will enable it to truly take hold.”
Building Block(chain)s for a Better Planet forms part of a series of reports from the Fourth Industrial Revolution for the Earth project, run in association with the World Economic Forum Centre for the Fourth Industrial Revolution.
Read the full report here