Using Blockchain to Avoid Double Counting While Empowering Everyone to be Part of the Solution

Today’s side event at COP24 for Blockchain Technology for Enhanced Climate Action emphasized the importance of distributed ledger technology (DLT) to accelerate mitigation solutions for climate change and empower non-country parties to work together. The event featured the Climate Chain Coalition Screen Shot 2018-12-11 at 1.12.56 AMfounded just one year ago but already bringing together 140 organizations with a mission to mobilize climate finance and enhance monitoring, reporting and verification of climate goals.

Blockchain technology is a form of Distributed Ledger Technology (DLT). (For a good explanation of this technology see this World Bank Group 2017 report.)Screen Shot 2018-12-11 at 1.22.55 AM It functions as a decentralized database that can securely store data and digital assets, like environmental credits or certificates. Transparency is increased because the data recorded on the blockchain is a permanent ledger that cannot be modified. Trust between parties is increased because the data is not stored in a centralized location but rather through peer-to-peer transactions. Transaction costs are reduced enabling much smaller transactions that are accessible to more individuals.

A new report issued this week by the Climate Ledger Initiative (a collaboration of several think tanks aiming to accelerate climate action) Navigating Blockchain and Climate Action identified three main areas where blockchain has the most potential to accelerate climate action: 1) next generation registries and tracking systems; 2) digitizing measuring, reporting and verification; and 3) creating decentralized access to clean energy and finance.

The UNFCC has identified blockchain technology as a disruptive technology that has the potential to solve the solution to the main challenge of “how do you attribute the climate contribution while avoiding double counting.” Under the Paris Agreement (PA), a country steps up by submitting their commitment to mitigation measures as their Nationally Determined Contributions (NDCs). Theoretically, the development and continued revision of these NDCs will govern the Parties and their climate commitments under the Paris Agreement. But the Paris Agreement also encourages developed countries to finance projects in developing countries. Screen Shot 2018-12-10 at 5.41.57 PMWho gets the credit toward the NDC – the country financing the project or the country implementing the project? How do we ensure that one country (or entity) doesn’t take credit at one stage of a project and another take credit at a different stage? The security and transparency of blockchain may be the solution. (However, keep a healthy dose of skepticism, said CEO of Goldstandard, Marion Verles, because many times technology solutions are being proposed that don’t actually solve the real world problem.)

Climate change is the seminal issue of our generation and requires all hands on deck. As Massamba Thioye of the UNFCCC said today, “We need to mobilize ALL stakeholders, suppliers, financiers, consumers, citizens, policy makers so that they make the right investment.” The challenge being faced is how do we all work on the solution and create market incentives. Ms. Verles identified the importance of DLT technology in the supply chain to help corporations get the critical data they need to make decisions on the impact that a good has on the planet (carbon impact, water impact, etc).

See GLOCHA - the Global Citizen Empowerment System

See GLOCHA – the Global Citizen Empowerment System for Full Poster

This information can move to the end consumer. If you knew, and could compare, the carbon impact of items you were purchasing, would you pay a little more to make a cleaner purchase? The bottom line is that blockchain has the potential to add a value stream to products that represents the intentional choices of individuals, companies, and countries to work toward a cleaner, safer planet.

(Note bitcoin uses blockchain technology in a very energy intensive manner that is not healthy for our planet – see fellow VLS student Ben Canellys blog here.)