The World Economic Forum (WEF) went beyond the finance sector to investigate possible applications of blockchain technology in the protection of the environment. The research discovered over 65 ways in which the use of blockchain technology might improve the environment.
The WEF referred to the “great acceleration of human activity” in the last century and how it has led to an improvement in the quality of life of humans and taken a toll on the planet at the same time. The institution also revealed in the report that transformational ideas and actions were necessary to reduce the intensity of the changes the planet is going through.
Notwithstanding the hype around blockchain technology, the WEF believes that the technology is the answer to many of the compelling environmental problems we have.
According to the report, the many environmental applications of blockchain technology that were found centered on:
Enabling the transition to cleaner and more efficient decentralized systems: peer-to-peer trading of resources or permits; supply-chain transparency and management; new financing models for environment outcomes: and the realization of non-financial value and natural capital.
Other ways in which the use of blockchain technology could help provide unique solutions that are capable of disrupting the key systems involved in tackling environmental problems were also covered in the report. These were dubbed “game changers” by the WEF.
The eight game changers include; “see-through” supply chains, decentralized and sustainable resource management, new sources of sustainable finance and incentivizing circular economies amongst others. “See-through” supply chains, for example , mean the blockchain can be used to bring about transparency in supply chains by recording immutable and traceable transactional data throughout the supply chain.
The WEF presented the potential solutions as opportunities for innovators and urged them to take up the challenge and reap the benefits that come with “unlocking the hidden value in environmental systems.”
Finally, the report also contained a warning regarding the tendency to attempt to use blockchain technology to solve every problem. Three principles for organizations to follow when deciding to apply blockchain technology in their fields were listed as a guideline. Organizations ‘should ask themselves if blockchain can solve their problem(s), if they have built the right ecosystem of stakeholders and whether they can handle risks and unexpected consequences associated with the adoption of blockchain technology.
