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Cryptocurrencies and blockchain to fight climate change
Written by Davies on / Reading time: 5 minutes.
Since the release of the first cryptocurrency in 2009, Bitcoin has gone from being an alternative proposal from the traditional payments model to the world's most successful cryptocurrency. Since then, a wide ecosystem of virtual currencies has been generated (there are more than 2,500 different cryptocurrencies).
In parallel with its evolution, numerous questions have been raised about the uses and applications of blockchain technology. Its growth has been persistent. And we no longer only talk about blockchain in the financial sector, but also in health, automotive, public administration and even in the environment.
Climate change has become the great threat of the 21st century, and markets are turning to invest in the development of renewable energy. It is the great challenge of the economic and social sectors. Scientists are already warning that our future as a species depends on how energies are used over the next 10 years.
In this context, can cryptocurrencies and blockchain be an alternative to fight climate change?
Initiatives to reduce climate change
Arbil, the coin that puts CO2 ion the digital chain
We are moving to Germany to address one of the largest cryptocurrency initiatives that have been launched in recent times. In a report from the Welt newspaper in September, it was recognized that it is no longer enough to focus on reducing the emission of CO2 emissions into the atmosphere, but that the greenhouse gases that have already been emitted to it will also have to be returned.
The near end of the fossil fuel era has left a carbon footprint that has altered the atmosphere of the entire planet. The climate crisis has been caused by all of us, and the questions we ask ourselves now are: Can we do anything to solve it? Are we smart enough to find a solution? Are we collaborative enough to change the situation?
German politicians now seem to have an answer with blockchain technology. The Free Democratic Party (FDP) has proposed "issuing a new cryptocurrency called Arbil to anyone who removes CO2 or other greenhouse gases," as Medium points out. The motto is “Put CO2 on the digital chain” and the goal is to reward all those who remove it from the atmosphere, with active climate protection and the promotion of innovation.
What is the real value of Arbil?
This new cryptocurrency will receive value based on the guarantee of redeeming the coins for issuance certificates. One Arbil coin would correspond to the certificate value for one ton of carbon dioxide, which is currently valued at approximately $30. Frank Sitta, deputy group chairman of the FDP, said: "We want to give CO2 a price worldwide. With our blockchain concept, the national emissions trading systems can be elegantly combined.”
Climatecoin, a project to contribute to climate change
The widespread use of blockchain technology has also led to other initiatives to fight climate change. Its philosophy is based on the idea that we can all contribute, as explained by one of the founders and operations directors of this project, Juan Boluda. But what is Climatecoin?
It is a platform and measure whose value is based on incentivizing businesses responsible for the environment through "a platform that places up to 255 million of these currencies and that can be obtained in exchange for ether, one of the main virtual currencies alongside bitcoin."
Climatecoin has been established as a platform open to citizens, companies, governments, institutions, etc. Its working methodology is based on selecting environmental projects that provide substantial change with global warming, especially in electricity, agriculture and clean energy sectors, among others.
As Boluda points out, "the first companies to opt to be financed are dedicated to developing biofuel for aircraft, seeds resistant to global warming and carbon dioxide capture technologies to extract it from the atmosphere on a large scale."
Climatecoins open the door to opportunity for change, to commercialize CO2 allowances and to democratization with this technology after reaching an agreement with the United Nations for its purchase.
While it is still too early to talk about results on climate change with the momentum of virtual currencies, the objectives of this initiative can be achieved through tokens.
What do we need to implement these blockchain initiatives?
None of this would make sense if we were not aware of the environmental issues that exist. Therefore, one of the main characteristics of Climatecoin is that it is aimed at conscientious people who want to contribute overcome this global challenge.
Next December, the UN Climate Change Conference (COP25) will be held in Madrid, where climate change will be one of the main points to be addressed. The aim is to pave the way for countries to contribute to the fight against climate change under the Paris Agreement.
Two years ago, the intervention of blockchain technology on the brakes of climate change was already mentioned. The Climatecoins initiative was presented at COP23 in Bonn, Germany, to explain that "the use of blockchain in this area can facilitate the effective progress monitoring in implementing government programs aimed at combating climate change, as well as companies' compliance with the stated objectives." Will we be surprised by new crypto projects in the next UN Conference?
Cryptocurrencies and climate change: conclusions
Although the blockchain was originally created in order to store the history of bitcoin transactions, it has been seen great potential to be applied in other areas. This has been made possible by the properties it offers (transparency, traceability, distributed database, etc.).
Some news that already warns us about these measures are: “UN Supports Blockchain Technology for Climate Action” and “How Blockchain Technology Could Boost Climate Action” (United Nations Climate Change). Although climate change and cryptocurrencies seem like two distinct realities, they are now increasingly connected.
Unlike centralized networks, the blockchain has been designed to avoid monopoly control of the system. This technology records transactions openly and permanently, promoting transparency and security. However, the application of cryptocurrencies in the fight against climate change is part of two main points: ensuring the traceability of sustainable products and, in line with UN objectives, automating and strengthening monitoring, reporting and verification (MRV) of the environmental impact of the projects.