Blockchain's Potential Remains Untapped in the Environment Sector, Here's Why
In the last two years, the popularity of blockchain has grown in leaps and bounds. In 2018, the technology has formed the foundation on which startups like Noiz Chain and Epic Mega have built their marketing and entertainment content solutions. However, its potential is yet to be fully utilized according to a World Economic Forum (WEF) report developed by PwC.
One of the areas where blockchain has not been applied - but has huge potential - is the environmental sector. The WEF report, titled, 'Building Block(chain)s for a Better Planet', highlights more than 65 blockchain use cases in addressing environmental challenges facing the world today.
Just last month, a wave of hurricanes and typhoons were experienced in the US and Asia. These natural activities are proof that climate change is real and are likely to become rampant should global warming continue. As such, there is an urgent need for the global community to focus on actions that mitigate the impacts of climate change.
The WEF report shows that there are various opportunities to utilize blockchain in natural resource management that have been untapped. These include decentralization, enhancing supply chains sustainability and fundraising towards low carbon emission and sustainable economies.
According to UK PwC partner, Celine Herweijer, a lot of focus has been given to blockchain application in the business and finance world, but there is a huge opportunity to develop new ideas that could see the technology help with solving environmental challenges. Some of the areas that blockchain technology can enhance in the environmental space include transparency, ethics in supply chains, sustainable production and consumption incentives, and low carbon emissions.
Ales Zizmund, MBA and CEO of 4th Pillar, says, "We believe that blockchain should contribute to improvement of our living conditions. That is why we are promoting our green solution through our white paper and advertising. Our contribution is through reduction of paper sendings if you use our platform."
Making reference to the 2011 FAO State of the World’s Forests Report that shows that the number of sawn logs removed and used for paper products was 853 million m3 during that year alone, Zizmund further says, "The demand for wood and paper products is expected to increase as developing countries industrialize, which will only put more pressure on forest ecosystems. FOURdx will actively reduce the use of paper as it is based on DLT transactions and digital communication. With this technology, we will implement a cost-effective digital system and reduce the carbon footprint all around the world.”
For investors or companies that wish to support the development of blockchain application in the environmental sector, there is a need to consider three critical questions. The first question has to do with blockchain's ability to address the environmental problem they want to solve, while the second one has to do with the risks associated with deploying the technology.
Further, investors must consider stakeholder involvement and find out whether the correct stakeholder ecosystem has been put in place. All in all, if harnessed correctly, blockchain technology has the potential to facilitate a transition to more energy-efficient and cleaner environmental solutions.
It is also capable of unlocking natural resources for purposes of empowering local communities. This is critical for the environment sector where natural tragedies and non-financial challenges persist.
Disclaimer: David Drake is on the advisory board for most of the firms mentioned or quoted in this article.