No, Blockchain is not the answer to climate change

Recently, many experts believe that blockchain is one of the solutions to combat climate change and can be used to improve the transparency, accountability and traceability of greenhouse gas emissions. In addition, it helps companies provide more accurate, reliable, standardized and easily accessible carbon emissions data. Many governments are also experimenting with it at the policy level and exploring ways to prolong the problem.

Through smart contracts, carbon footprints across the entire value chain can be best calculated, tracked and reported as they provide instant authentication, real-time data verification and clear data records.

All of this sounds great. But is it really possible?

Britain endured its worst summer ever in July 2022 as a scorching heatwave suffocated Europe. Meanwhile, Delhi – touted as the most polluted city in the world – saw the lowest pollutants in the air this Diwali.

Climate change has gone beyond control and is unfortunately not waiting for technology to solve the problem. The right time to take action is now. The crisis worsens with delayed regulatory responses at country and global level, and public awareness is the only way forward.

Lessons from the past

The Covid-19 pandemic, for example, has been one of the greatest lessons of our time. So many countries today have managed to beat the deadly coronavirus, not with blockchain, or big tech companies solving the problem, but via social awareness and self-isolation measures, we managed to overcome the crisis. Of course, later came the vaccination and the technology bit, which acted as an enabler and made the overall process much smoother.

Another interesting observation at the time was the sharp drop in carbon emissions. But it was only short-lived as things began to return to normal, and so did carbon emissions.

According to the IPCC report, anthropogenic climate change is causing dangerous and widespread disturbances in nature and affecting billions of lives worldwide. Despite efforts such as the Paris Agreement from the UN, which was signed in 2015, it has barely moved the needle.

What is the solution?

“I don’t believe in technology-based solutions or technological solutionism,” said Constanza Gomez Mont, founder and principal of C-Minds, an innovation agency that designs and implements strategies for economic and social development.

She said there is a need for more and more case studies that are local and have a measurable impact on community life, creating bioeconomies and sustainable practices. “Honestly, the global conversation serves as an umbrella for the vision and for energizing, but where the real work lies, and the real challenges lie, is at the local scale,” she added, pointing to the development of edible forests.

In line with the Paris climate agreement, she said that one could go through all the commitments and see it reflected on a very local scale. “So I think the nature of the challenge is that you need to have this global discussion that’s accessible with certainty. But I believe in the power of having a local ecosystem that talks about the nature of things like climate change, and that doesn’t specifically treat technology as a alternative, which is going to solve everything, she added.

Climate change and the purchase of carbon credits

Many companies are discussing becoming carbon neutral and carbon negative in the foreseeable future. For example, most companies have joined the Climate Pledge to reach net zero carbon emissions by 2040 – i.e. ten years ahead of the Paris Agreement.

“Regulation is driving the big part of the conversation,” Mont said. She said she believes in the power of voluntary credits. “But let’s be real, what drives and sets a bar for best practice is the regulatory approach,” she added.

“I think you need to take it into a bigger approach and strengthen the regulations. I’m so glad you’re doing this voluntarily, but, like climate change, you’re kidding, aren’t you?” Mont dismissed worriedly.

She said she sees exponential growth in the demand for carbon credits (one of the most talked about applications in blockchain) to deliver their individual business goals, hopefully carbon negative. “But I’m a bit scared here, for example, how can the funds for this go to projects that strengthen local communities because we see more and more companies just paying for services, and there is no question that it creates a bio-economy,” she added to.

Furthermore, she said that we are only pouring in solutions such as planting trees without taking social factors into account. In other words, more demand means more supply of projects. Therefore, it becomes more important to invest the funds and fulfill the business goals, as well as one-to-one community development. It is normally the people at the bottom of the pyramid who protect the nature reserves.

This is where the bigger questions come into play: How do these carbon credits strengthen local communities, and how do they strengthen a symbiotic relationship between society and development alongside biodiversity conservation?

Blockchain, really?

Blockchain technology, or any other technology, for that matter, to track and report carbon emissions cannot be the solution. There are bigger things at stake that require implementation at the grassroots level and continuous monitoring of the well-being of the general community, along with empowering the owners of the land and what benefits they get from the entire engagement.