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Blockchain’s potential in tackling climate change

The buzz surrounding distributed ledger technology, commonly known as blockchain, is usually about being the future of financial and legal transactions.

But aside from the two, blockchain also has the potential to help tackle a far trickier problem, which is climate change.

According to a recent report, a blockchain expert from the University of Technology Sydney Law has been championing this idea at a special United Nations (UN) Session in Geneva, Switzerland.

This year’s International Organisation for Standardisation (ISO) Week was attended by more than 600 people representing 160 countries.

UN was invited to listen to a series of presentations about how standards are supporting innovation to address some of the UN’s Sustainable Development Goals (SDGs).

The expert presented on the possible uses of blockchain technology in sustainability and climate action. The session focused specifically on SDG 13, which is to take urgent action to combat climate change and its impacts.

One of the challenges is to help developing countries meet their increasing demand for electricity without adopting high emission solutions and that is where blockchain steps in.

Industrialised and developed countries are heavily dependent on high emission electricity production. An example would be Australia.

Disrupting the country’s way of producing electricity in order to reduce emissions is challenging because the incumbent industries, infrastructure, systems and processes are significant contributors to the economy.

On the other hand, demand for electricity in the developing world is increasing but there is little or no existing infrastructure. This presents the opportunity to adopt a cleaner more sustainable approach from the beginning.

With solar panels, communities and villages will be able to generate, store and use their own energy. The whole system can then be managed securely using blockchain technology.

Micro-transactive grids involve a limited number of participants with each dwelling or household producing solar powered energy.

It would then be bought and sold between the participants according to needs at different times.  In order for this to work effectively, there must be trust in the system.

Everyone in the grid community must be able to trust the ledgers that record how much energy is generated, stored, bought and sold within and across the network, since there is no central controller or regulator of the system.

With blockchain, the technology will provide a transparent, auditable and automated market trading and clearing mechanism for the benefit of producers and consumers.

Moreover, communities wherein everyone does not have a bank count will be supported. Settlement of debits and credits can take place at an agreed time according to the local accepted traditions or trade conventions.

While complexity, cost and reputation have been the main obstacles to blockchain adoption, standards can help to address all three of these barriers.

At a time when global trust in government, banking, the media and other powerful institutions has slumped, blockchain can play a significant role in democratising new more trustworthy business networks.

These new economic models can be exemplars for how blockchain technology might help achieve some of the SDGs.

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