Blockchain Could Tackle Pressing Environmental Challenges, Says World Economic Forum
September 17, 2018 10:58 PM
A recent report highlighted the energy inefficiencies in proof-of-work blockchains, but was ultimately quite positive about blockchain technology’s potential impact on the environment.
A new study by PricewaterhouseCoopers (PwC) for the World Economic Forum was released at the Global Climate Action Summit held in San Francisco last week. It identified 65 potential ways that blockchain can address global environmental challenges.
The study, entitled «Building Block(chain)s for a Better Planet,» is part of the Fourth Industrial Revolution for the Earth series, a project by the World Economic Forum that looks at how technological innovations can address environmental problems.
Celine Herweijer, a partner at PwC UK, said that despite much attention currently given to blockchain tech from finance and commerce, there is also an opening «for fresh ideas to harness this nascent technology to help deliver big gains for our environment.»
According to the report, «There is a unique opportunity to harness the Fourth Industrial Revolution – and the societal changes it triggers – to help address environmental issues and transform how we manage our shared global environment.» Done right, say PwC and the World Economic Forum, blockchain could «create a sustainability revolution.»
The report advises that attention be paid to improving the governance frameworks, policy protocols, and investment and financing models that incentivize technology development for global environmental management systems. With improvements in place, blockchain as a democratically designed, «foundational emerging technology,» could improve management of national resources, create more transparent supply chains, and provide new mechanisms for raising the investment needed to achieve low-carbon, sustainable economic growth.
Blockchain technology could also improve disaster preparedness and humanitarian relief by providing decentralized, shared, trusted systems, distributing vital information and improving the efficiency of delivering aid after an event. The report goes into detail on six key areas and more than 65 individual use cases charted as very specific examples, with spotlights illustrating exactly how blockchain technology could be applied in practice.
Six key areas
The publication also describes the risks and challenges currently faced by blockchain as a new and emerging technology. These so-called «blockchain blockers» relate to blockchain’s immaturity, the trust of involved stakeholders, and the flow of investment.
One key challenge highlighted is the energy inefficiency of proof-of-work blockchains like the Bitcoin blockchain, which, the report points out, could potentially be solved by moving to other protocols like proof of stake or even newer innovations like the Chia protocol. PwC estimates that the Bitcoin blockchain’s estimated energy consumption in 2018 was equal to the amount of energy consumed by the country of Austria in 2014.
The report concludes with an advisory guide for those considering blockchain adoption to assess if it’s a good fit for their needs.
The WEF, supported by Stanford University and PwC, plans to develop further insight papers and build new «networks of practitioners» to leverage the technological promise of blockchain. It also plans a «public-private accelerator for action» to enable funds from governments, research, and commerce to be pooled and deployed to scale «innovative Fourth Industrial Revolution solutions for the environment.»
Melanie Kramer is a freelance FinTech, blockchain, and cryptocurrency writer based between France and Canada. Melanie has studied, and retains an avid interest in, global politics, business, and economics.
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