Governments and organizations from all over the world have been concentrating on adopting various technical solutions to address the issues posed by climate change and biodiversity loss in recent years. Blockchain technology is one instrument that could be very useful in addressing climate catastrophe.
Blockchain is a decentralized, digitally distributed ledger that aids in transaction tracking and validation from a technical standpoint. Environmental experts are increasingly discovering uses for blockchain in the fight against climate change, from tracking the sustainability of products to monitoring pollution, despite the fact that it is best known for the technology that powers cryptocurrencies like Ethereum and Bitcoin.
Large-scale, worldwide sustainable development projects have become extremely complex, which has led to delays and backlogs. Processes and systems that use blockchain technology can manage transactions very effectively and efficiently. Investors are interested in sustainable development and other environmental activities for this reason. Processes and platforms based on blockchain can help to manage stakeholders who provide different functions. As a result, sustainability associated with climate change will be greatly beneficial for capital investors, increase efficiency, and reduce transactions.
As per a report by the United Nations Environment Programme (UNEP), blockchain’s distributed ledger innovation has brought important enhancements by enabling investors, developers, and buyers of renewable energy projects to work together on a common platform with established international standards for compliance due diligence.
Anyone with an internet connection may buy solar panels online from South African renewable energy firm Sun Exchange and rent them to hospitals, businesses, and other organisations in Africa. Cross-border payments are made through Sun Exchange using the Bitcoin blockchain. As a result, there are no longer any potential middlemen between investment and beneficiaries. South African businesses have seen a roughly 30% reduction in energy expenses thanks to Sun Exchange’s solar panels.
Supply chains that are ecologically friendly and sustainable can also leverage blockchain technology. By making supply chains transparent, technology can follow products from the point of manufacture and assist prevent waste and inefficiency. Blockchain can also give customers more insight into the manufacturing and delivery processes for the products. As a result, they will be able to choose environmentally friendly options.
Even if using blockchain technology to address the environmental situation has numerous advantages, there are also many drawbacks. Processing some transactions on the bitcoin and Ethereum blockchains requires a substantial amount of electricity and computational power. In many nations where energy costs can be excessively high, this is a major problem.
The analysis makes it clear that Blockchain technology may undoubtedly assist in finding solutions to the environmental challenge and enhancing sustainability in a variety of ways. However, advancing digital infrastructure is necessary to promote the adoption of emerging technologies like blockchain. Policymakers must modify legislation to assist build future energy systems NSE 4.98 percent and mitigate risk as blockchain and similar digital technologies advance quickly.